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June 26, 2018, 9:34 a.m. EDT

Why the S&P 500 may now be at its ‘most attractive entry point in weeks’

Critical information for the U.S. trading day

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By Barbara Kollmeyer, MarketWatch


Red Bull via Getty Images
Take a dip.

Investors should prepare for a few bumps this summer, said the market veterans and the pundits.

Indeed, we were warned over and over again that something wicked this way could come, as we as we slog our way through what has seasonally been the second-worst month of the year for the Dow. And while midterm elections have been one red flag, it seems trade stress is proving the big headache these days.

After Monday’s brutal action, many will be watching to see if investors can pick themselves back up today — it’s looking a little shaky so far — and if the Dow can pull back above its all-important 200-day moving average.

But fear not, because the veterans have been making the rounds, trying to calm everyone down. Like MarketWatch’s Mark Hulbert, who says that blue-chip breach makes for a fine time to pick up some stocks.

That leads us to our call of the day , from CrackedMarket’s Jani Ziedins, who tells us Monday’s takedown represents “the most attractive entry point in weeks” for the S&P 500. The index’s close at 2,717 puts it in the ballpark of an area that he says spells better bargains for investors.

“I don’t need to be the first to jump in at these levels and will let this play out a little bit longer, but today’s [Monday’s] discounts make this a far safer place to be buying than when we were at higher levels last week,” says Ziedins in a new blog post.

The fact that the S&P had a pretty rough day doesn’t really surprise the veteran investor, who has been watching closely as it neared big resistance around 2,800. The question now is whether Monday’s action was a “normal, routine and healthy dip” after a big run, or the start of a deeper rout, he says.

Ziedins gets the sense that there is plenty of fear that something much worse is to come, but urges investors not to buy into that.

“Just because [Monday’s] selloff looks and feels terrifying doesn’t mean it is real. Every buyable dip feels this way too,” he says.

The market

Out of the gate, the Dow /zigman2/quotes/210598065/realtime DJIA +0.20% , S&P /zigman2/quotes/210599714/realtime SPX -0.04%  and Nasdaq /zigman2/quotes/210598365/realtime COMP -0.19% /zigman2/quotes/210598365/realtime COMP -0.19% are steadily moving higher. Asia /zigman2/quotes/211618636/realtime XX:ADOW -0.82% /zigman2/quotes/211618636/realtime XX:ADOW -0.82% had a mixed session, while Europe /zigman2/quotes/210599654/delayed XX:SXXP -0.26%  is clinging to some green.

U.S. crude  and Brent are modestly up, and gold  is pulling back.

Check out the Market Snapshot column for more.

Plus: Why the Brent, WTI oil-price spread has narrowed

Read: ‘Death cross’ forms in gold for first time since 2016

The chart

China’s Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP -0.33%  closed down 0.5% on Tuesday to 2,844.66, making for roughly a 19% drop from a closing high reached in January. A drop of 20% meets at least one definition of a bear market. Stocks in the region were still struggling Tuesday over the latest escalation in the country’s trade battle with the U.S.

Here’s our chart of the day showing that action:


MarketWatch
Bear territory
/zigman2/quotes/210598065/realtime
US : Dow Jones Global
27,747.04
+55.55 +0.20%
Volume: 159.34M
Nov. 13, 2019 2:37p
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
3,090.54
-1.30 -0.04%
Volume: 1.01B
Nov. 13, 2019 2:37p
loading...
/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
8,470.09
-16.00 -0.19%
Volume: 1.37M
Nov. 13, 2019 2:37p
loading...
/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
8,470.09
-16.00 -0.19%
Volume: 1.37M
Nov. 13, 2019 2:37p
loading...
/zigman2/quotes/211618636/realtime
XX : Dow Jones Indices
3,331.04
-27.38 -0.82%
Volume: 0.00
Nov. 13, 2019 12:58p
loading...
/zigman2/quotes/211618636/realtime
XX : Dow Jones Indices
3,331.04
-27.38 -0.82%
Volume: 0.00
Nov. 13, 2019 12:58p
loading...
/zigman2/quotes/210599654/delayed
XX : STOXX
405.86
-1.04 -0.26%
Volume: 0.00
Nov. 13, 2019 5:50p
loading...
/zigman2/quotes/210598127/delayed
CN : China: Shanghai
2,905.24
-9.58 -0.33%
Volume: 12.98B
Nov. 13, 2019 3:01p
loading...
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