A new month is underway, and this one brings with it the famous saying; “sell in May, and go away.” With equity indices showing handsome double-digit returns year-to-date, and select positions that we have featured in our recent Trading Club videos and here in the blog, should investors be looking to take profits and start booking their summer holidays?
Personally, I’m not a great believer in “sell in May”, as in recent years you would have missed out on significant returns thatwererealised later in to the year. Frankly, I prefer to hold high quality positions with conviction regardless of what month of the year it is, or what the weatherman says. Rather than speculating on anecdotes and myths, here at the Academy we base our trades on factual evidence captured in our Checklists. In the following image, taken from our latest Monthly Checklist Report published this week, you can see that the business cycle expansion remains intact with a positive score of +6.
When you look at the gains in the S&P 500 year-to-date, they come as no surprise given the bullish fundamentals presented by the positively correlated business cycle Checklist.
For now, there are no signs of this reversing down. However, when you zoom in on equity markets the intrinsic data aren’t all positive, which is something we discussed with members in this week’s Trading Club video analysis. (Some of the data are obscured to not disclose the exact score as a courtesy to our paying members).
Looking at the chart close up (hourly interval), there is negative RSI divergence short term with the "Spoos” approaching the key psychological level of 3000. But perhaps the Checklist score is sufficient to break through? (You’ll have to join us for our latest video analysis to find out!)
Leaving the stock market to one side, there are a whole host of trading setups forming in currency markets using our FX Checklists. Here you can see a couple of the scores, which appear to favour short CAD and long EUR this month (scores for the other currencies, plus our choice pairs, are available to Trading Club members. Please also note our usual disclaimer at the bottom of the article. This information is for educational purpose only and not investment advice.)
We’ll be closely watching how this setup plays out in the coming weeks...
…and likewise with the Euro.
Of course, there are also a host of other ideas in the report, which features 10 Checklists in total. If you would like to join us for our full analysis including new insights each week, or learn from the ground up with online tuition from Lex in our MDT online course, then reach out to us and take your financial knowledge to the next level right away!
P.S. A big welcome to each of our new students joining us this month following our Easter Sale promotion! In case you were intending to take advantage of the up to 60% saving and missed it, we will do our best to extend the offer to you this week if you let us know over the weekend at [email protected].
Happy bank holiday,
James Helliwell | Chief Investment Strategist
Disclaimer: Our service is intended for educational and informational purposes only and should not be considered investment advice. Do not make any decisions based on the articles and material presented on www.lexvandam.com and never trade with money you cannot afford to lose. We cannot be held responsible for your trading results. For more information, please check Risk Disclosure - T&C.