Very well known patterns in the stock market will typically stop working eventually.
That's because a pattern becomes anticipated, so players keep acting earlier and earlier until they undermine the move completely. If you know there's likely to be a bounce at noon, you start buying at 11:55 a.m. -- and then 11:50 a.m. and so on until the bounce no longer occurs.
But one of the fascinating things about the current market is that dip-buying still works extremely well. Perhaps that's due in part to the fact that the set-up occurs overnight and buyers can't do too much until the opening bell.
Still, it's absolutely stunning how automatic the buying has become on the opening bell when we have a gap-down open. There's no concern at all that maybe the opening selling could gain momentum, the only worry is buying fast enough.
This dynamic will change at some point, but for now, there's a lack of thinking by traders. It's like Pavlov's dogs -- as soon as the bell rings, it's time to buy.
The intellectual bears hate this sort of thing. It's absolutely trading without thinking, and you have to believe it's going to come to a painful end sooner or later.
However, it's working for now, and that's all that the "crowd buyers" cares about. They don't care that it really has no fundamental support -- all they need to know is that stocks bounce right back.
But personally, I'm working to find some good entry points this morning. I've added to Teck Resources (TCK) -- my Stock of the Week -- and am looking to recent precious-metals picks DRD Gold (DRD) and Seabridge Gold (SA).
Biotechnology is also looking active again, so I'll be weighing that group further as well. Elsewhere, oil is apparently totally irrelevant at this point.