Wednesday, May 02, 2007
Sell in May and go away ...not so fast
Sell in May and go away ,well maybe, if Crude Oil breaks $68 a barrel then yes but if the resistance holds I would not bet the ranch. The market has exhibited and inverse relationship to the price of crude for some time .Merger activity, over extended foreign markets, extreme bearishness and the lack luster under performance of US markets since March 2000 couple with good over all economic performance all signal it might be time for a catch up rally . By catch up I mean the DOW Jones historically has returned around 11% a year, this would put the DOW Jones somewhere north of 24,000 at this juncture. Unlike many of my Elliot Wave compatriots I fail to see any bullishness at all, in fact in the last several years I have seen a total lack of faith in the markets ability to give even nominal real returns, with many individual investors throwing in the towel. The general political and social predisposition is that of a negative malaise, with doom and gloom being the order of the day and a growing dooms day cult of “global warming” gaining ground with a religious fervor. This brings even a older Wall Street saying ,” when everyone knows something it always wrong” .