Sell in May & go away......

Here comes the question of the year...sell in may and go away.....

Before i answer this important annual event, i must look @ total picture of market.......her are some important stat to consider :

- In last 7 trading days, indices have lost 

Nasdaq lost 4.60%

Dow lost 2.84%

S&P 500 lost 2.78%

Russell lost 2.75%

It is obvious that Nasdaq is the weakest of all indices by far.......

- CMF is green in all indices although barely in Nasdaq

- Dow & S&P 500 are showing golden cross

- VIX @ 15.70

- RSI are showing the following number :

   Russell 54.78

  Dow 51.29 

  S&P 500 49.97

  Nasdaq 39.42

IF i can recall since 2010, numbers were not that low @ all, generally speaking, by May all of the above stats were @ highest point, thus a correction was imminent, NOT such a situation here @ all.

Russell is showing amazing strength, this index is used for future direction of market and is the first one to show extreme weakness.

Based on every single stat listed above, instead of " selling in may and go away " you should be 

" buying in May and staying in Market "

We had our first correction already and may have seen the low, there is rotation going on and many hot sector may cool off and laggards may join UP cycle.

World bankers are all in a passive mood which is very good for equities.

There is pulse in world economies and may build up from here although very gradually. China & India are neck to neck in 6% GDP growth, while rest of the world are in 1% to 3% mode.

Stock picking needs to be done with lot of chart study and seasonality in focus, it may not be difficult to make money in rotating market, RSI is a straight give away in terms of when to buy and when to sell, never fight for last $, too risky for all.

Good luck with your own understanding of this May cycle and your own comfort level.

BLOG does NOT give buy or sell.

Saleem

Posted in: Mixed