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Sell in May and Go Away

Discussion in 'Shares' started by Tropo, 3rd May, 2009.

  1. Tropo

    Tropo Well-Known Member

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    Sell in May and Go Away
     

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  2. perky

    perky Well-Known Member

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    Whats your opinion Tropo?
    Chart wise, there are a lot of nice stocks out there. I have bought a few last week and its looking pretty reasonable.. The Dow has now finally gone above that 8150 mark with a couple of green candles - and our market is soaring today.
    I know on the shares.com.au forum they are quite Bearish right now.
    All I know is I am VERY carefully monitoring and have stops in place with my stocks for if/when it does go down again...
     
  3. Tropo

    Tropo Well-Known Member

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    Hi Perky,

    I am glad you are trading!!
    No matter how big is doom and gloom you can always find few good horses to ride on. :p
    Today XJO broke up sideways channel (no surprise here).
    Because we are still under sea level, do not be lulled with today’s market performance (statistically approx. 50% breaks are false).
    Important level for XJO is at 4543 (38.2% Fibo) – and there is few ‘bus stops’ under this level.
    If your position size is correct and stops in place keep $$miling.
    Market is still volatile and any outcome is anybody’s guess.
    Stay :cool: and ... Happy Trading. :D
     
  4. Chris C

    Chris C Well-Known Member

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    I enjoyed the article, but I think the sell in May and go away rule is probably going to hold true again this year...

    For me I just think it will be hard to the market to digest the continuing bad unemployment figures coming out, the bad GDP results that were hashed over because of swine flu, Chrysler bankruptcy, the fact that the bank stress tests have been delayed, making me nervous about what we can actually expected... I just think at this stage there is more evidence suggesting the market has been overbought in recent months and that the market would really take a turn for the worse if any major unexpected bad news was to arise in the next few days.

    Short of this sort of unexpected bad news, May could well be a relatively good month if this rally continues, but my intuition (not that it is of any reliable predictive value) at this stage is saying that May is either going to be particularly good or particularly bad month. So I'm expecting it to shake off this tracking relatively sideways business that its been doing April, which is much like it did in January and December, and I'm expecting we'll see it get back to falling like it did in Feb or rallying like it did in March.
     
  5. perky

    perky Well-Known Member

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    Gees try not to sit on the fence Chris :D:D

    Keeping a very vigilant eye on what happens over the next few days very much so Tropo. Enjoying this nice litle uptrend though - I do also agree it will have go back down at some point as I think we might be in wave 4 of a 5 wave retracement. I am more looking at the Dow rather than the ASX200 chart - as we are sheep following the US IMO. The next level is around 9075 for the DOW, then Fib 38.2% may be around 9400.
     
  6. kenny

    kenny Member

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    Hi Guys,

    The "Sell in May" adage is spookily on my mind this year. You have to wonder what skeletons in closets will be swept out as the companies adopt the approach of letting out the bad news in a rush and copping the heat now in hopes of a sharper recovery when times improve. I suspect the US will see this more than locally.

    Citigroups' cheeky result earlier is my guideline for the smoke and mirrors that may occur. From a recent Mauldin newsletter, the writer summed it up;

    IMHO tread carefully. Nothing wrong with some exposure but there will be more opportunities soon so no need to rush.

    Cheers,

    Kenny
     
  7. Tropo

    Tropo Well-Known Member

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    Perky,

    You should be vigilant !! No mercy !!!
    IF....DOW get there I’ve got 9090, 9423 and 9725 (mid point).
    Have fun and stay :cool:
     
    Last edited by a moderator: 5th May, 2009
  8. Chris C

    Chris C Well-Known Member

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    :D

    My outside bet is simply that May will be a moving month. However I don't have the guts or money to make a call as to which way we will be moving, but if I was gambling and looking for some good long odd bets, I'd be betting that the market will be close to +/- 10% of the 3780 mark it began May at.

    I think that's a pretty big call given that the VIX is virtually back to its pre-Lehman Brother collapse levels!
     
  9. AsxBroker

    AsxBroker Well-Known Member

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    I know a friend who thinks that the market will drop 50% from where we are at the moment (anyone else in the same thought?). I'm probably closer to Chris, thinking that it'll move by around 10% or so.

    Cheers,

    Dan
     
  10. Chris C

    Chris C Well-Known Member

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    50% in May alone?!? I'm no where near that bearish. If we ended up re-testing the March lows by the end of May I'd be impressed (though not overly surprised)...

    I'm definitely still leaning towards the market finding new lows over the new couple of months, but my thinking and research suggests that's more likely to occur in June/July than in May.

    As for where it all stops... I think it comes back to the good old statement "it's anyone's guess" but my guess for the ASX200 would be somewhere between 2200 and 2800 (I think the Dow might be able to get below 4000 if the Fed can keep their finger off the hyperinflation button), but there is just so many things that government and central banks can do to manipulte the market that it is really pot luck at this stage when it comes to calling the bottom from here.

    I reckon in 6 months from now I reckon we'll be able to see with much greater confidence if these supposed green shoots are indeed sprouting and if they aren't then I expect that we will be well into a deepening process of debt deflation that will lead us into a recession that future generations will be able to liken to the Great Depression.
     
  11. bigbuddha

    bigbuddha Well-Known Member

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    I think I have my most hated quasi financial saying/statement --- GREEN SHOOTS --- what the hell does that really mean?

    ANALYST --- yes we are seeing many green shoots coming through it's all good for the economy, rally on!!!!

    i think i'll smash my comp screen if i hear another CNBC/FOX/BLOOMBERG analyst tool who had no forsight in predicting the downturn but has all the authority in the world to predict bottoms because the bottoms are sprouting green shoots.
     
  12. AsxBroker

    AsxBroker Well-Known Member

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    Lol...

    Green shoots, could be a bad cooking dish or alternatively a gardening show?

    So a 50% retracement could be possible over the next few months?


    Cheers,

    Dan
     
  13. bigbuddha

    bigbuddha Well-Known Member

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    i'm the worst at market movement forecasts, i prefer to set the prices i am willing to buy an asset and if the price doesn't get to that level then so be it, but what i will say is this i truly believe we are seeing the downfall of the US empire and the emergence of the asia's.

    Of course i'll still live in australia because in any disaster movie australia is always the place to be, it's an island you know.





     
  14. Tropo

    Tropo Well-Known Member

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    "So a 50% retracement could be possible over the next few months?"

    Nothing is impossible in the market.
    I wouldn’t be surprised to see market testing previous lows (not necessarily in May) at some stage in the future.
     
  15. try anything once

    try anything once Well-Known Member

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    Just interested, does anybody think that March 9 was the bottom and we are now in the very early stages of a bull market?
     
  16. Chris C

    Chris C Well-Known Member

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    I definitely don't...

    Whilst I'm presently planning to move OS, if the world really started to get a little too hot to handle and Kruddy's $100B defensive investment was starting to look like it'd prove useful then I'd definitely be looking to exercise my Australia citizenship to take an extend holiday in what is otherwise a wonderful country.