Summary
- As dip-buyers capitulate, we are nearing a tactical bottom for selective reentry points in the market.
- Technology and semiconductor gauges, especially signals from NVDA and SOXL, are essential for identifying a true market bottom and safe re-entry.
- Active portfolios using signal-based timing have outperformed, with the Monthly ETF Signal Portfolio up +21.1% YTD, leading the S&P 500 by over 27%.
- Optimal returns come from aligning trades with positive market and sector gauges, then confirming with MDA breakout signals for individual stocks.
- Market timing is critical: momentum gauge signals have accurately forecasted the recent downturn and sector rotations since October.
Introduction
“Death, taxes, and retail traders buying the dip.
Those used to be the only certainties in life. Throughout 2025, even when institutional investors were feeling sheepish, day traders could be relied upon to step in and backstop a sell-off.
Dip-buying basically became their identity. A year-end review from JPMorgan found that – in their most active year to date – retail investors amassed 75% of their positions during buy-the-dip episodes. Not this time. In fact, JPMorgan found that retail traders were net sellers of stocks for the first time in nine months. What a heel turn! They didn’t buy the dip … they sold the rip.” ~ Joe Ciolli, Business Insider, March 2026
Timing matters, and it matters greatly. I have spent the last 35 years trading, researching, and constructing algorithms to identify and leverage the value across fundamental, technical, and behavioral finance models. Of the ten portfolio models designed for optimal portfolio mixes for members to beat the market at Value & Momentum Breakouts, eight come from enhancing well-tested anomaly research in published financial journals. All of the models continue to outperform the S&P 500 in live forward testing here on Seeking Alpha, and again this year.
Dip-Buyers Ride Longest Negative Signal Since 2022 To Next Tactical Bottom
As members of my investing community know well, there has been a rotation underway since last October. While the headlines now at the end of March blare sirens of the worst weekly losing streak since 2022, we have been writing and posting to signal readers for months. Next, I’m going to talk about “tactical bottoms” and I don’t mean military pants in the online stores.
Let me boil it down to the two most important Momentum Gauge signals from my doctoral finance research. If you are learning about this for the first time, I will keep it at the high level and include several recent articles for you to consider here from the past few months:
- Echoes Of 2022: Bear Bounces As ETF Signal Portfolio Leads S&P 500 By Over 23%
- If This Is A 2022 Market Repeat, Here Is What Likely Happens Next
- First Negative S&P 500 Signals As Mega Tech Breaks Down From October Highs
As the State Street SPDR S&P 500 ETF Trust (SPY) and MicroSectors FANG+ 3X Leveraged ETN (FNGU) fund charts illustrate below, we have been in a significant downturn and rotation for the past 6 months with strong similarities to 2022 from my prior articles and posts.
These key funds translate to the two most important momentum gauges, in my opinion, for forecasting the Major Indices that are most heavily weighted on technology and semiconductors.
The S&P 500
First, the S&P 500 represents the 500 largest stocks in the US market and is an excellent way to assess overall equity money flows. However, it is actually a terrible way to determine how well 11 different sectors are performing in the market of several thousand stocks not on any major index.
As you can see on the weekly gauges, we have been in a negative signal for the past 9 weeks, starting the week of January 30th. I have shared dozens of posts, alerts, articles, and updates since then to help readers mitigate the weakness. At the end of the article, I will show how we have traded these signals for strong Q1 gains.
