I heard two words earlier this month (February 4) when the NYSE composite fell 3.6 percent, which left it 9 percent off its January high. The two words were:

 

 

That's what the interviewee on financial television said. He'd been asked how he interpreted that day's big stock market drop. He could have said that investors might want to pause because the Dow had fallen several hundred points over a short time since the January 19 high. Or, he could have said the day's substantial market swoon suggested that prices had further to fall.

 

But no, he was rather emphatic when he said that right here and now, the market is presenting investors with a buying opportunity.

 

Feb. 8 brought a similar comment about the decline, from the president of a financial services firm: "Not only is this normal, but it's healthy -- and people should add to their positions because of it."

 

Add to their position? That's another way of saying "buying opportunity."

 

February 9 brought two more published pronouncements. The CEO of a wealth management firm declared this is not the start of a new bear market; the CIO of a bank advised clients to stay fully invested in stocks.

 

"Buying Opportunity" could be the two most financially dangerous words an investor could hear right now. The bear market rally has emboldened financial advisors, who later on may wish they had a better understanding of how bear market rallies work -- like the numerous such rallies in the years1929-1932.

 

I wonder how many stockbrokers were telling clients of a "buying opportunity" shortly after the top of wave b in early 1930?

 

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As you can see, those who bought "the dips" as wave c developed lost their shirts. So the next time you hear a so-called expert start to lay those two words on you, start reading instead.

You could begin with The Short Term Update, in which readers found these words on Feb. 8: "Stocks appear poised for a steep decline from current levels."

 

Even after an initial steep decline, subscribers were prepared for more of the same: "There is greater bearish potential depending upon the wave structure of the selloff."

 

It's easy to keep up with the wave structure. We analyze it, provide detailed charts and spell out the relevant details you'll want to know. Our interpretation of the wave structure will speak to questions about how far the market will move and how quickly it will get there.

 

You have an alternative to the one-track minds and mouths and their "buying opportunity."

 

Instead, subscribe to the Financial Forecast Service -- risk free -- by clicking here.