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Market warning

Step aside or buy the dip? After this week’s AI selloff, you need two answers, not one.

When to protect what you have, and what to buy when the market turns. How to answer both, and where most investors get it backwards.

David | Senior Analyst @ Exent Research Desk6 min read

The AI selloff in numbers

The week of October 12–16, 2026

  • Chip stocks (SMH)−9.8%
  • Nasdaq-100−5.2%
  • The S&P 500−2.0%
  • The average S&P 500 stock (equal weight)+0.4%

Monday open (Oct 12) to Friday close (Oct 16). Equal weight = every S&P 500 company counts the same.

The AI half of the market did the falling. Chip stocks lost almost a tenth of their value in five days, and the Nasdaq had its worst week since June. The average stock in the S&P 500 ended the week slightly up.

A week like this leaves you with two questions at once. Is it time to protect what you have? And if prices keep falling, what is worth buying? Answer only one, and you either protect and miss the turn, or buy the dip and ride it down.

Answer 1 · Protect

When to step aside

Is the market Risk ON or Risk OFF? That decides whether a dip gets bought or gets deeper.

Answer 2 · Find

What to buy when it turns

Which stocks do top analysts still rate Strong Buy, and how far have they fallen?

See the daily market regime

Answer 1. Is the market Risk ON or Risk OFF?

Markets move in regimes. In a Risk ON market, money is flowing, credit is calm and the trend is up. Dips tend to get bought. In a Risk OFF market, money is leaving, credit is cracking and the trend has turned. Dips tend to get deeper.

The same 10% drop means opposite things in each. So the first answer is not about any stock. It is about the market.

If the market is Risk ON

Money is flowing, credit is calm, the trend is up

  • A dip is likely a dip: selling into it locks in the loss
  • Investors stay invested and keep their core positions
  • Weak weeks are when they buy from their list

If the market is Risk OFF

Money is leaving, credit is cracking, the trend has turned

  • A dip can turn into a long drawdown, like 2000 or 2022
  • Investors trim what is most exposed and hold more cash
  • They keep their list, and wait for the turn to buy

So which one is it right now? It is the question that is easy to answer in hindsight and hard to answer in the moment. Market intel answers it every morning.

Answer 2. What top analysts still rate Strong Buy after the drop.

Selloffs don't only hit weak companies. This week they hit the stocks Wall Street's best-ranked analysts like most.

Gems, Exent's Strong Buy list (Stock Radar), ranks every Strong Buy by how many top-rated analysts back it. After the drop, its top 12 are 9% to 38.5% below their highs.

9–38.5%Below their highsThe top 12, Oct 16 close
7 of 12Are 20% or more belowThe median: 20% below its high
26–33Top-rated analysts back eachBuy ratings, Exent analyst data
+10–73%To analysts' median targetTargets are opinions, not promises

These are not bargains by default. A Strong Buy that is 20% below its high can fall another 20% in a Risk OFF market.

The list tells you what to buy. The regime tells you when.

The top 12 Strong Buys, after the drop
  1. 1Internet · 33 top analysts−9.0% from high+20%upside
  2. 2Chips · 33 top analysts−12.0% from high+47%upside
  3. 3Software · 32 top analysts−17.8% from high+21%upside
  4. 4Software · 32 top analysts−20.2% from high+43%upside
  5. 5Software · 30 top analysts−20.8% from high+10%upside
  6. 6Chips · 29 top analysts−19.7% from high+23%upside
  7. 7Software · 29 top analysts−20.3% from high+21%upside
  8. 8Software · 29 top analysts−20.9% from high+23%upside
  9. 9Retail · 28 top analysts−13.0% from high+32%upside
  10. 10Chips · 27 top analysts−30.0% from high+73%upside
  11. 11Software · 27 top analysts−38.5% from high+21%upside
  12. 12Chips · 26 top analysts−33.6% from high+62%upside
Ranked as on the Gems list, Oct 17, 2026. Prices: Oct 16 close. From high = below the 52-week high. Upside = to the analysts' median target. Names unlock in Gems.

The plan. Step aside when it's Risk OFF. Have the list ready for when it turns.

  1. Every morning

    Check one thing first: is the market Risk ON or Risk OFF?

  2. If it is Risk OFF

    Protect first. Trim what is most exposed, keep cash ready, no rush to buy dips.

  3. Meanwhile

    Keep the list: the Strong Buys top analysts still back, and how far each has fallen.

  4. When it turns

    Risk ON again: put cash to work from the list, not from the headlines.

This is not advice. It is how investors who plan for both answers tend to work: the market first, then the stocks. It also guards against the two most common mistakes in a selloff.

Where most investors get it backwards. They buy the dip too early, and sell at the bottom.

Buying the dip too early

The Nasdaq, 2000–2002: three big rallies on the way down

  • May 23 – Jul 17, 2000+35%
  • Apr 4 – May 22, 2001+41%
  • Sep 21, 2001 – Jan 4, 2002+45%
  • From the March 2000 peak to the October 2002 low−78%

Each rally looked like the turn. Each ended in new lows. In a Risk OFF market, a dip can keep going.

Selling at the bottom

The S&P 500 in 2020 and 2022: the worst moment came right before the turn

  • The fall: Feb 19 – Mar 23, 2020−33.9%
  • Low to a new record: Mar 23 – Aug 18, 2020+51.5%
  • The fall: Jan 3 – Oct 12, 2022−25.4%
  • The year after the Oct 12, 2022 low+21.6%

Selling in the panic locks in the loss. The rise off a real low can be fast, and it starts when it looks worst.

Index closes, price only.

Both mistakes come from the same place: deciding from the price alone. A falling price looks the same in both markets. The regime is what tells them apart.

Before you do anything.

So should I sell everything and wait?

No. Selling everything in a panic is the second mistake above.

The first question is which market this is. In a Risk ON market, selling into a dip locks in the loss.

Isn’t 20% off a good price?

Only if the fall is over. In 2001 the Nasdaq rallied 41% in seven weeks, then fell to new lows.

In a Risk OFF market, cheap can get cheaper. That is why the list comes second.

Can’t I just wait for the bottom?

Nobody can call it. In 2020 the low came five weeks after a record, and the S&P 500 was back at a record about five months later.

Investors who do well don’t guess the bottom. They know the market’s mood, and they have a list.

Risk ONRisk OFF

Market intel tells you when to step aside. Gems, included with it, tells you what to buy when the market turns.

Two products, one plan: one clear Risk ON or Risk OFF read every morning, and the Strong Buy list for when it turns.

Current regime

Updated every morning

Live
Today: members only
Risk ON or OFF???.?
Risk OFFNRisk ON
Illustrative only. Not real data.
  • Liquidity??.?

    How much money is moving through the financial system — the fuel behind every rally.

  • Capital Stress??.?

    Early-warning signs from credit markets — where trouble shows up before it reaches stocks.

  • Cycle??.?

    Where the economy sits in its cycle — growth, inflation and interest-rate momentum.

  • Sentiment??.?

    How fearful or greedy investors are — the extremes that mark tops and bottoms.

What you get

Market intel
  • A daily Risk ON / Risk OFF call on the S&P 500
  • When to hold and when to step aside, in plain words
  • Daily macro briefings: rates, inflation, oil and the AI trade
  • Exposure guidance for your own portfolio
Included with it
  • Gems included: the highest-rated ideas from the top 1% of 4,500+ Wall Street analysts
  • Top Strong Buy picks, ranked and refreshed daily
See the daily market regime

Built on institutional‑grade data and leading AI.

The same data sources and models the big desks use, read for you every morning.

  • TradingView
  • FRED
  • Morgan Stanley
  • Goldman Sachs
Exent
  • Claude
  • OpenAI
  • BIS
  • SEC

Sources

Advertorial, presented by Exent. This article is for information and education only and is not investment advice, a recommendation to buy or sell any security, or a forecast. Prices, ratings and analyst targets are as of the dates shown and change daily; analyst targets are opinions, not guarantees. Past market episodes are shown for context; history does not predict future returns. Investing involves risk, including the possible loss of principal. Exent AI is an informational research platform and is not an investment adviser, broker-dealer or fiduciary.