Buy S&P 500 on dips

Whilst oversold indicators support a short-term rally, Ari Wald, Technical Analyst at Oppenheimer says that if internal breadth fails to confirm the next S&P 500 high, volatility will continue in the medium-term.

Longer-term and from an asset allocation perspective, Wald recommends being overweight US equities. In particular, he recommends buying the S&P 500 over the Russell 2000 because he thinks the Russell is exposed to greater downside risk (see chart). “Tactically, investors can look to buy the S&P 500 on pullbacks and sell the Russell 2000 on rallies.”