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Buying the first dip to high-probability support in a strong up trend almost always works. That's why I had no problem recommending to readers to "buy the fear" on Tuesday morning when Greece shocked markets by going rogue.

So, now that we just made 40 S&P points, is it still up, up, and away from here? The market could definitely run away higher from here. That's a clear risk for equity fund managers who don't want to be caught under-invested at this time.

And I love this kind of tension too where, after months of bearish sentiment, all it takes is a good news catalyst that removes doubt about something (like European systemic banking contagion), and you can move another 30 points higher before the open (like the S&P did last week on Thursday October 27).

By the way, that kind of strong "Good morning and how the heck are ya!" where the futures are 1-2% higher before the opening bell rings is fund managers scrambling to get exposure. They use the S&P futures because it's the fastest, most liquid vehicle they have.

But not all are this nimble. And lots of that futures buying is by hedge funds putting the screws to the portfolio guys. Yes, markets fall faster than they rally, since panic is often stronger than greed. Yet, a surging market is also a wonder to behold, especially if you are already long and watching other investors chase your stocks.

That's why you want to have some core long positions so that you are invested in this potential, not chasing it. And then you wait for other fear-driven dips to buy. I think the highest-probability scenario right now is some back-and-fill until we know for sure that Greece is taking the debt deal.

The support line I've drawn is around 1,220. I would still definitely buy another test of that line. But I bet we don't get it. That's why I am staying long and looking to buy any dips to 1,240.

Remember this: the market will never make it easy for you to buy. Or at least, it doesn't seem easy. When we bought on Tuesday we had to deal with everyone else's fear, and our own. I'm not saying we can't dip below 1,200 again. But that would be a dip I would buy with both hands and anyone else's I could borrow.

What About European Recession?

The other thing in our favor is that the European Central Bank (ECB) acknowledged they are headed toward recession and the market not only held up, it rallied in spite of it.

While the Federal Reserve GDP forecasts for the US next year are optimistic at 2.5% to 2.9% growth, even the average pessimistic model from Wall Street economists is above 1.5%.

Until this growth outlook for the economy changes, I think equities will remain attractive to money managers right into the first quarter of 2012.

Kevin Cook is a Senior Stock Strategist with Zacks.com
 
Zacks Investment Research