“Beware the Ides of March” was silly, and “Sell in May and Go Away”, was now a waste of time in hindsight. The $SPX made new highs in March, took a break in April, and then went on to print more new all times in the dreaded May period. Sure the Nazzy and Russell corrected, but look where they are now. Hard to fight zero rates from and equity standpoint.
There was great short money made by those that saw a demise coming in those cloud/ipo/big data and software as a service stocks.
We could however be setting up for a goofy summer rally that will probably continue to surprise a lot of people. So many of those ominous head and shoulder patterns never materialized. They came close to necklines, but never validated in the apocalyptic fashion that many thought.
We could very easily see them goose the market higher in June, as the performance chasers try to print some returns by quarters end. The first half will be a wrap, and they don’t wont to go home looking stupid, so it could get silly to the upside. Why not? Does anything surprise us anymore?
As we move forward, I think you have to look at the hated financials. Many of the main stocks underlying $XLF are looking better.
The materials have a little way to go before $XLB hits the top of a channel and $XLE and $OIH names still look higher for a while before the the upper end of their trendlines get hit.
I’m wondering if the yield on the 10 year $TNX bottomed on Thursday. something to keep an eye on. We tagged 2.40% that day and it reversed with a follow through higher on Friday.
So far my summer karma is feeling good.
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Good luck next week.