Last month, I asked “are you in?” This month I believe the questions becomes “do you feel lucky….huh punk?” (Sorry Dirty Harry for stealing your line).
With April behind us we are now entering the traditionally slow months of May – October when market performance often slips. There is a Wall Street axiom that says “sell in May and go away.” Let’s see if that holds true this year! I sure hope not!
Our feeling is that it will not because 1) the guys at Stock Traders Almanac have already shown historically that when January and February are positive months in an election year, generally the May through October period is also positive; 2) This is an election year and I believe this administration will do whatever it takes to keep growth moving up, liquidity flowing and sentiment rising even if that requires Ben Bernanke, Federal Reserve Chairman, to drop dollars from his personal helicopter.
What really excites me is what will happen after the elections! We should clean up on the bear market that follows. We speculate the trend will be long and deep to the downside….perfect for trend followers.