Chart of the Week: Sell in May . . .

CotD observes "The stock market has entered
what has historically been the weakest half of the year. Today’s chart
illustrates that investing in the S&P 500 during the six months of November
through April accounted for the vast majority of S&P 500 gains since 1950. "

click for larger graphic


Source: Chart of the Day

"While the May through October period has seen mild gains during major bull
markets (i.e. 1950-56 & 1982-97), the overall out performance during the
months of November through April is nevertheless compelling. Hence the saying,
“sell in May and walk away.”

Note however, that "Selling in May" has not worked in each of
the past two years. As we mentioned previously, I am looking for a
tradable low somewhere in the June/July time frame.

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Quote of the Day:

This is one of the peculiarly dangerous months to speculate in stocks. The
others are July, January, September, April, November, May, March, June,
December, August and February."

-Mark Twain

What's been said:

Discussions found on the web:
  1. John commented on May 5

    If you look at SPX inflation adjusted the peak (1966) and the trough (1982) the short cycles of ‘sell in May’ and the election cycles were pronounced. IF you believe that this cycle peaked in 2000, beware those dismissing seasonal patterns as unimportant.

    DJIA adjusted see:

  2. muckdog commented on May 5

    Ain’t gonna work this year either, Barry.

    Wednesday was a confirmation day for technicians, and little birdies are whispering in my ear that light volume pullbacks will be bought aggressively.

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