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Sunday, May 18, 2014

Sunday, 5/18/14 update

"Sell in May and go away" as the adage goes, and actually there is some statistical basis for that saying as can be seen in the below chart.  What's really interesting in this analysis is that over 5 years August and October are strongly negative, but on a ten year scale it's just August.  Intuitively one would expect October to be consistently negative, but that's not so - at least in the most recent 10 years.  Also worth pointing out is that the four month return for the May through August period on both the 5 year and 10 year span is negative (-0.61 on 5 yr, -0.60 on 10 yr), even with a solid rebound in the July period.  Finally, it's great that December appears to be consistently bullish - Santa Claus is real after all!!

And apparently true to form a significant top appears to be in place on the ES/SPX.  If not, it's likely quite near.

Alternate #1 - top in place

Alternate #2 - top nearby

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