The last few years SELL IN MAY worked particularly well. But the market took a quick rally late in APRIL this year in 2013, so is it SELL IN MAY this year?
When we take a look at the charts, we can see since the middle of april, we rallied up and hit the high 1500's on the S&P and as I type this the S&P is exactly at the year highs again. So we are at a make or break area here. Break out and we could be off to the race, but if the bears come back there could be serious trouble in MAY, so doing this analysis here is a good exercise. We certainly are at at cross roads!!!
|spx daily chart|
When we take a look at the SPX weekly chart, there seems to be warning bells alarming. Even though we reallied up nicely on the S&P the last few weeks, the weekly charts seem to be suggesting we are very overdone on the buying side.
Maybe with all this buying going on, the traders are not looking at charts like this, and have been lulled into a false sense of security. Anyway, the markets do not really care about anyone right now, and looking at the weekly, it is telling us to be very cautious, and also telling that a correction on the market is not only overdue, but possibly coming down the track. Will this occur in MAY, who knows, but looking at the weekly chart there is certainly a case to be on alert that is for sure.
I am sure the private funds and equity firms had tightened up their stop losses, and sold out of massive profitable positions right now. That would be the astute thing to do looking at the weekly chart anyway.
|spx weekly chart|
Sell in may ? well we will find out soon. But things are a little over done on the buy side looking at these charts anyway. We are not screaming to SELL IN MAY, but can see a cause for anyone who is doing this at the moment.
HAPPY TRADING. :-)
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