Poll: Sell in May 2011?

[Lojanica]

Quote from trefoil:

Apologies in advance if anyone posted something like this before, but you really don't want to be too short in the 3rd year of a President's term. As Ed Hart once observed on FNN way back, the most reliable economic cycle on Earth is the Presidential election cycle:

The Economic Sweet Spot of Presidential Terms

My longer-term stuff's been bearish these past two weeks as well, and I've cut back pretty hard. But I don't expect that to last much past June at most. If the economy continues to sputter, every incumbent, including of course the Prez, is going to be putting downright irresistible pressure on the Fed to loosen up even more.

Exactly. Trade what you see. Have a looksie at the monthly charts on the indexes.

Summer slowdown. Up to test 1400 to 1500 area. For many reasons. Once the indexes start pushing higher in Fall/Winter then the shorts will have to cover and an explosion up into that area will follow.

This is all speculation but it helps to have a framework of possibilities.

For instance what if...

versus What if this happens.

Events trump everything just have a look at Japan post-quake.....

For this week the range on the spoos is likely 1340-1300.

 

[shortie]

Is The Bull Market Topping?
May. 23 2011 - 10:25 am | 156 views | 0 recommendations | 0 comments
posted by WILLIAM SCOTT O'NEIL
http://blogs.forbes.com/investor/2011/05/23/is-the-bull-market-topping/

Over the last several weeks, investors have seen a market that has been characterized by choppy gains and losses, and a downside bias in the short-term. In the big picture, meanwhile, the data also seems to suggest the longer term bull market trend may be topping as well. While we won’t know for several months how this market will respond, it makes me wonder: Is the Bull Market topping?

First, let’s review the facts:

The current bull market began in March of 2009, and is now more than 2 years old. (Most of the last few bull markets did not last much longer than 2 years).
There is an abnormally high amount of distribution in the market (over 6 distribution and/or stalling days on each of the major indices for the past 5 weeks).
Industry group leadership, at least for now, seems to be rotating towards more conservative investments.
A mostly positive earnings season was not a powerful enough catalyst to continue the market’s upward trend.
Positive political news, like Osama Bin Laden, only results in very short-term rallies that institutional investors often sell into.
Several major political issues are still looming over Wall Street: the lack of significant, sustainable job creation through incentives for starting or expanding small businesses, the housing inventory glut, overspending and the national debt, and the Dodd-Frank Bill (only 5% of which has been implemented to date).
Favorable economic news, and the reaction to it, has been fairly weak at best.
Wal-Mart, which many consider to be an economic indicator in and of itself, reported decent results, but domestic growth was muted suggesting a poor economic environment. The recent price action suggests Wall Street agrees.
Many leading stocks have begun to confirm the downtrend of the overall market

 

[S2007S]

Bulls never have to worry, there is never any threat of a huge sell off just 2-4% pullback followed by months and months of gains of 10-20%, no need to sell, the market will be right back where it was in the next week or 2, of course this is just another buying opportunity before the SPX crosses 1375 and eventually 1400.


Stocks Choppy for Now, But Steep Correction Unlikely
CNBC.com | May 23, 2011 | 06:02 PM EDT

The latest wave of market turbulence could sweep stocks lower into the summer, but it's not likely to be the start of a deep correction, analysts say.Stocks Monday reacted negatively to the latest batch of headlines on Europe's sovereign debt woes, which drove the euro to an intraday low under 1.40. Stocks followed the lead of the euro and were whipped lower as the euro [ EUR=X 1.4067 +0.0022 (+0.16%) ] sank. At its worst point of the day, the S&P 500 [ .SPX 1317.37 -15.90 (-1.19%) ] was down nearly 20 points, but it closed off the lows at 1317, a 15-point or 1.2 percent loss. The index is now down 3.4 percent for the month of May.

"I think this is just going to be a very sloppy investing season, and one where your not going to be rewarded for being early," said Jack Ablin, CIO of Harris Private Bank."I do think we're in a cyclically sideways market which means you really do have to play this risk on, risk off trade," he said.Brian Rauscher, chief portfolio strategist at Dahlman Rose and Co, said he expects a major correction at some point but does not believe this is it.

"Today there's some sellers and there's no buyers. The buyers right now have no reason to step up and be aggressively purchasing here. We're out of the earnings season and there is no catalyst. This market has been very resilient at these technical levels," he said.

Rauscher said the S&P 500 is flirting with a key level—1313, a level it touched Monday. "You break this 100-day moving average (1313), and you'll get some selling," he said."If you're an investor, I don't think anything's really changed...We still think the market will go higher but we think on a path, we will go lower before we go higher," he said. Rauscher said this sell off could be similar to the 5-7 percent pull backs that have characterized this market since it began to rise in March, 2009.Andrew Burkly, director of equity research at Brown Brothers Harriman, expects the market to stay in its choppy, lower trend until July or August.

"We're bracing ourselves for something we think is a typical 'sell in May' and go away. That's what we think we're in and we don't think it's over. It's not a bull-market-ending bear market," he said.Burkly said he made some portfolio changes and moved more heavily into defensive stocks, like heath care and consumer staples, while staying away from higher beta sectors. "Our overall thesis for the year has always been that the economic growth expectations got too far ahead of themselves," he said.Burkly said U.S. data has also been a big factor in the market's choppiness, and the 2011 GDP forecasts of economists have now slipped to a consensus 2.7 percent from 3.3 percent. "We think that's the trigger. All these growth forecasts are being pared back," he said.Burkly said he is watching the 1295 level on the S&P as the next big support area, and that the S&P could fall to his low forecast for the year of 1230 before rebounding. Standard and Poor's Sam Stovall is also watching that 1295 level but he's not ready to say the market is headed for much of a decline.

"It's an important level that we might bounce off of," he said, noting it is a key retracement level and also would be the point where the market is down 5 percent form its April high of 1363. "My gut basically says that for right now it's too early to push the panic button. It's like listening to a pilot say: 'we're approaching turbulence. Please put on your safety belt.' She is not saying: 'Don your parachutes and assemble by the door,'" said Stovall.Stocks were also impacted globally by a slow down in Chinese factory orders, reported early Monday. Commodities also sold off sharply, particularly copper, which was down 3 percent and oil, down more than 2 percent."I think certainly that if the decline in equity prices combined with the decline in commodity prices and the decline in 10-year yields, you can't ignore them because they could be signaling an economic slowdown to occur six months form now. At the same time, if you keep responding to these type of minor dips, you're going to be whipsawed. Unfortunately the fundamentals don't reveal themselves until much of the price change has already occurred," Stovall said.One thing analysts agree on is that the strength of earnings puts a floor in the market. Rauscher said the earnings backdrop for the remainder of this year and early next year should remain strong but could then weaken if the economy weakens. "It looks like there's enough earnings power to put a floor under the market at 1250/1220ish area," he said.Rauscher said he is also favoring defensive sectors, but is watching for signs the market is shifting so he can recommend moving back to cyclicals once more. "My work is saying they are going to underperform for another four weeks or so," he said.

 

[S2007S]

hmmmmm

Is the excuse once again Greece????

Would be interesting to see if the SPX closes below 1300 tomorrow....




S&P FUT
1305.30 -8.30 -0.63%
DOW FUT
12256.00 -71.00 -0.58%
NAS FUT
2285.75 -16.00 -0.70%
OIL
98.87 -0.72 -0.72%

 

[Lojanica]

1295-1300 low .

 

[noddyboy]

Quote from S2007S:

hmmmmm

Is the excuse once again Greece????

Would be interesting to see if the SPX closes below 1300 tomorrow....

You are back, and bearish!

 

[Lojanica]

Quote from Lojanica:

Exactly. Trade what you see.

For this week the range on the spoos is likely 1340-1300.

Pretty darn close so far. Market is levitating on QE2, inflation, low interest rates and dreams. Will be interesting to see tomorrows action but it doesn't look like a sell-off.

 

[shortie]

"Sell in May" is working so far. It may not feel like it but all 4 weeks were red for SPY. Of course it only lost ~2% total, but I am surprised even that much was allowed given "the Bin Laden Top" :eek:

 

[Runningbear]

Shortie,

Tommorrow in the first day of the month, which statistically speaking should be an up day.

I have a theory that if the first day of the month is down, the second day of the month is also down. And this pattern is an indicator of immediate market weakness.

Are you able to tell us how the second day of the month performs when the first day is down?

Runningbear

 

[shortie]

Quote from Runningbear:

Shortie,

Tommorrow in the first day of the month, which statistically speaking should be an up day.

I have a theory that if the first day of the month is down, the second day of the month is also down. And this pattern is an indicator of immediate market weakness.

Are you able to tell us how the second day of the month performs when the first day is down?

Runningbear

sorry, don't have the rules programmed.

actually Tue is 31st