Today's rather impotent 0.06% gain for the S&P/ASX 200 Index (ASX: XJO) so far to just under 6,850 points will do little to erase the painful memories of this trading week. Even after these moves, the ASX 200 remains a nasty 3.6% down from where it was at last Friday's close.
In fact, at today's levels, the ASX 200 has now slumped almost 4% since mid-August. The index remains almost 10% off of where it was back in mid-April and down 8.5% year to date in 2022 thus far.
This might be viewed as an attractive situation by many value investors, though. As the old maxims go, investors should be looking to buy the dip or 'buy low, sell high'.
But is this the right course of action for ASX 200 shares?
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Is it time to buy the dip in ASX 200 shares?
Well, yes. That's according to one fund manager anyway.
As reported in the Australian Financial Review (AFR) today, Fundstrat Global technical strategist Mark Newton is seeing potential in the United States markets right now.
He stated the following on how he is viewing the current market:
While many might feel entering a seasonally bearish month like September makes buying dips risky, I'm expecting that the next week or two could actually help [S&P 500] recoup at least half or more of the recent damage since 8/16…
The already bearish sentiment is growing more negative at a time when markets have entered an important area of price/time support, which can help this pullback to reverse course… Buying this dip looks correct.
So that's certainly an optimistic view on the US markets right now. But what about ASX shares? After all, most Aussies are invested in the likes of BHP Group Ltd (ASX: BHP) and Commonwealth Bank of Australia (ASX: CBA) over US shares like Apple Inc (NASDAQ: AAPL) and Microsoft Corporation (NASDAQ: MSFT).
Well, the US markets are not the ASX 200. But, as we've covered in the past, the two markets have an extremely high level of correlation, So if the US markets indeed rebound going forward, it wouldn't surprise too many commentators to see the ASX 200 follow suit, at least to some degree.
So that's one outlook on the immediate future of the US markets and by possible extension, ASX 200 shares. No doubt investors, value investors in particular, might react with enthusiasm. But we shall have to see what happens.
At present, the ASX 200 Index is down a nasty 8.5% year to date in 2022.
