Some believe in seasonality and some do not. Let us say we split the investment community into two halves who is right?
As an investor one has to take all factors into consideration. If 50% of the market believe in historical patterns of course this has an important impact on the marketplace.
I have outlined the presidential election and the profit season to be settings to look at history.
What can we learn of prior years in middle of June. As most of you know we have the all important saying “Sell in May and stay away”. No doubt this has a historical aspect. There has been many major sell-offs post Quarter 1 profit seasons.
This year the market has been strong. We have had a minor setback in techs and Investment banks like Deutsche Bank has been talking about a probable 5% sell off in the Nasdaq Index.
Here you have the tech index Nasdaq. Even here you can see the hesitant market before and rally post election. The Nasdaq up around 20% in the time period post election.
Media has tried to make the last days into a market downturn in techs. The chart above shows there is little proof so far of a major sell down. The market still with a nice positive trend.
One should always this time of the year be cautious of the potential June correction. But there is little evidence this year. But always be cautious.
This year has been influenced by the promised policies of the Trump administration. I have outlined the Trump policies deregulation, tax cuts and other Wall Street friendly policies. The economy been on track as well. This driving the market.
I hope you read my Trending Sideways blog in January. Buy in when a new market direction commences was my best advice. It seems to have been a wise strategy 2017. Hope you bought in.
I believe in seasonality. A lot do, so this becomes an important factor. In the broader market outlined above little evidence of a June sell down this year. But June always a month to be cautious.
Prior I have told you I have had a positive forward look. The market has been rallying all year. Make sure to follow the market direction now middle of June.