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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives -- Ignore unavailable to you. Want to Upgrade?

To: SGJ who wrote (31722)	5/7/2012 11:10:30 AM
From: GROUND ZERO™	Respond to of 218890

I guess this is going to be slow and choppy in both directions... it will never look obvious... GZ

To: SGJ who wrote (31722)	5/7/2012 11:27:17 AM
From: GROUND ZERO™	Read Replies (2) \| Respond to of 218890

Here's an interesting article on these markets regarding the "sell in May" phenomenon, the article is below the chart, interesting that I have a model deadline for May 30th... The truth is more complicated, and it boils down to this: It's different in an election year. This chart of the Democratic Presidential Cycle Pattern substitutes the Seasonal Pattern's 1-year chunk of time for a 4-year chunk, averaging it together in the same way, but with a twist. In this version, I am including 4-year chunks of time only from when a Democrat has been in the White House. When viewed in this way, the whole rule about "Sell In May..." goes completely out the window. May's mission in election years seems to be to convince everyone to sell, and May seems to have recruited all of the business news reporters to tell that story on its behalf. The real story during election years, especially when a Democrat is in the White House, is that May is a month for correcting, while June is a month for screaming higher. The timing of the turns is more important with this tool than calculating the magnitude of the move. Coming up just ahead is a bottom due May 14, which our subscribers have known about for the past month and so they have been anticipating its arrival. There is also a bottom due at the end of the May, which helps to illustrate the point that sometimes a bottom is what prices go down into, and sometimes it is what prices go up out of. A big strong June and July is wholly contrary to the old saw about "Sell In May...". Most of the time that rule does work, at least in part, but in election years a whole different rule goes into effect. If the correlation persists this year as well as it has been doing up until now, we can look forward to a big rally in June before the market finally enters a plateau in July, when the media's attention is tuned to the campaign promises being slung by the presidential candidates. So I suppose that the revised motto should really be, "Sell In May And Go Away, Except If It Is An Election Year, And Seasonality Is Running A Week Behind, In Which Case Expect A May 14 Bottom, And A Really Strong Month Of June". decisionpoint.com GZ