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S&P 500 Sell in May Go Away?

Kristin Alonzo

15-May-2018 09:01 AM

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The S&P 500 has recovered from 3 months correction started in February to May 3.  Now, trading at positive territory YTD +2.3%.  Looking at daily technical moving average (the chart is for 20 & 50 -DMA) it is back at 2% gap difference, which has been the average gap - meaning it's near pullback.  Early this year at the record high print, the mean reversion reached as high as 3.5%.

(This % gap difference is used to measure the price point gap between  closing price to 20 day moving average and 50 day moving average, I personally came up to this as being a trader, it is far more useful to use % basis rather than price point as those are interchangeable, if you extract the median average it is easier to calculate & predict where the next movement is.  This is my personal theory & I find it simple to use & very handy.)

Here is the traditional technical chart.  A trend change doe does not happen overnight, it is a process, sideways price action is always observed in the middle.

 

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