Record $1.8 trillion market wipeout — buy the dip on the S&P 500
Thesis
Market shocks driven by strong jobs data and sudden Federal Reserve policy fears tend to result in sharp, emotional overreactions rather than fundamental economic collapse. Goldman Sachs notes that corporate profits are still near all-time highs, and the path to S&P 500 at 8,000 remains intact. Rather than fleeing the market, buying high-quality, battered index funds allows investors to catch the eventual rebound once the initial panic selling subsides.
Strategy approach
Build a mean-reversion strategy on SPY (S&P 500 ETF) on the Hourly (H1) timeframe. Enter a long position when the RSI(14) drops below 25 (oversold conditions) and the price touches the lower Bollinger Band (20, 2). Exit the trade when RSI(14) crosses above 60, or implement a 2% risk-to-reward stop loss.