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There’s a reason Warren Buffett’s famous line — “Be greedy when others are fearful, and fearful when others are greedy” — still gets quoted decades later. It works.
And I just watched it play out in real time.
About two weeks back, the S&P 500 (SPY) broke below its 50-day moving average. When that happened, I said we were likely heading into what I call the “Twilight Zone,” that area between the 50- and 200-day moving averages (MA).
My target was the 100-day — the level where I planned to put cash to work.
Sure enough, about a week and a half ago, the market hit the 100-day line. I posted in Telegram at the time: This is where I’m putting my cash to work, accumulating stocks.
Why was I so confident?
Because the Fear & Greed Index had dropped all the way to six — the most extreme level of fear I’d seen since COVID. Readings that low are rare and historically have marked major washout points.
In past cycles, including 2020, moments of extreme fear like this occurred right before significant recoveries. When the market reaches that kind of panic, it often signals that sellers are exhausted and risk is skewed to the upside.
The Technical Setup That Confirmed the Bounce
After buying at the 100-day, I needed confirmation… And I got it.
First, the market bounced off the 100-day — exactly as planned. Then, just last week, we got a close above the 50-day. That was critical. These kinds of technical confirmations matter, because closing back above a key moving average often signals that momentum is shifting and that buyers are stepping in with conviction.
When price reclaims an important trend level, it gives me confidence that the market structure is improving, not just reacting.
We should still expect some chop. Market breadth has been soft lately, and when leadership narrows, the major indexes can look stronger than the underlying market. That kind of cooling-off period is normal after a sell-off.
Breadth indicators tend to lag before they expand again, but once they start broadening out, rallies become healthier and more sustainable.
There was one more hurdle: the downtrending resistance line. Then we broke above that, giving another layer of confirmation. Breakouts like this matter because they show that sellers who were defending that trendline are finally getting overwhelmed.
The technical points aligned perfectly — bounce off the 100-day, close above the 50-day, break above the downtrend… That’s textbook.
What I’m Watching Now
So where does that leave us?
As long as we stay above the 100-day moving average in the S&P 500, which is currently at 6,563, I’m very excited about this market. That’s my line in the sand.
Anything above that level keeps the bullish structure intact.
And it’s not just today’s chart that tells the story. When you zoom out and look at long-term market patterns, the current setup shares similarities with past cycles — even with periods like the dot-com bubble.
I’m not saying this is a bubble, but the rhythm of expansions, pullbacks and recoveries often repeats. Understanding where we sit relative to those historical patterns helps me frame expectations and stay grounded, even when volatility spikes.
This wasn’t about guessing. It was about waiting for the right level, watching for extreme fear, and executing when the setup presented itself. The 100-day moving average gave me a clear entry zone.
The Fear & Greed Index at six gave me conviction. The technical breakouts provided confirmation. And the broader historical context supports the idea that these kinds of moves often mark the start of larger trends.
That’s how I trade dips. Not out of panic, not out of hope — but with a plan, a level and disciplined execution.
Graham Lindman
Graham Lindman Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. Ready for What the Fed Might Do on Dec. 10?
I don’t think many retail traders understand the turmoil we’re heading into over the next couple of weeks.
Right now, the Fed is set to make its second interest rate decision WITHOUT having access to any critical data!
Which means, whether Fed Chair Jerome Powell decides to cut, hold or pull a 180° with a rate hike, the market won’t take it lying down.
We might see some of the market’s favorite names slump lower while unexpected stocks spike… or vice versa.
But what I do know is that the traders who know how to target cash in the midst of chaos will be the only ones eating well.
Them and those with pure blind luck on their side — so if you think you’re feeling lucky, more power to you.
But if you’d like to see how smarter traders have been leveraging chaotic markets for cash opportunities…
Then I’ve got THREE critical trading files you should see right now.
These files contain techniques that are designed for the kind of volatility the market is heading into over the next few weeks.
We can’t make absolute guarantees, of course, but if you’d like to get your hands on them…
