”Sell in May and go away” is an old adage in the financial markets due to a slackening in the performance of the stockmarket – due to summer weather (in the Northern hemisphere) and tendency for people to go on holidays. ( Going for months long holiday, you know you want it!) There is historical data that shows this phenomenon – BUT I believe this does not have to dictate the future.
Seasonal tendencies would influence the market, what I have seen quite true over time is during Christmas there is a slowdown towards the holidays and a resurgence in volume and activity in January when people come back to business, but should not be wholly relied upon in ensuring profitability of your trading – which are determined by your exit strategies, psychology and position sizing. I discuss these concepts and applicability in my book “High Heeled Traders”.
So how did the markets go on the first day of trading? (1st of May is a Labor Day holiday in most western markets).
> US Market was up
> Australian market was up
> Nikkei market was up
> Hang Seng market was up
> Shanghai market was up
It doesn’t seem like the “saying” is following through?
Yes, I do not believe in superstitions… but I loved this…