US elections

Sell in May and go away

US elections

It always feels like a few days after Christmas for me when May is here and the sell in May signal is given. You know those days just after boxing day when it seems like all the build-up and excitement that led up to Christmas day is now over… anticlimactic is the word.

Ok that’s a slight over exaggeration but it does always feel like the end of something.

Sell In May

According to the trader’s almanac the average gains trading the DJ from November through until April yield 7.5% that’s a pretty good return for not doing that much apart from opening the position. This year’s profits were way over the average being closer to 12% following Vince’s lead.

Vince gave the sell signal just over a week ago and I was out of my seasonal trend trades for this year.

I personally only traded the Dow this season although the S&P and NASDAQ were both up even if only slightly. If you had taken the seasonal DJ signal, you’d be around 750 points better off after the spread.

Sell in May

Because I’m a subscriber to Vince’s service he publishes the buy and sell signals but you can easily do this on your own using the already mentioned Stock Trader’s Almanac.

I think that if I hadn’t started trading with Vince that I’d have probably taken my trading style from the almanac eventually. It isn’t a science but long term you’ll be in the money.

Talking of Vince Stanzione, he is out in New York at the moment getting a feel for the markets. Considering that the UK follows the US, where else is he going to go to check out the situation?

Anyway, he made an interesting point that Jim Rogers had said to him that a good way to get a feel for a country’s economic mood is to talk to Taxi drivers and prostitutes! The logic being that you get to assess the situation from a working class perspective. And I suppose you don’t get much more working class than… U’m, taxi drivers I suppose.

So what lies ahead in the off season? Well apparently chop in the US but whatever happens I’m out [Dow] until October.

This year I’m probably not going to be as active in the markets as I have been during the summer in previous years. No particular reason for this other than it’s going to be nice to take a step back for a change and look at some other possibilities on how to make money.

I’ll trade the odd few new trades of which I like that Vince recommends, but in general I’ll just be hanging on to my longer term trades that I have open and watch the markets go buy… pun intended.

A time for new traders

This is a good time for new traders and toe dippers to really get on with some studying and to make the most of the markets quiet time. Start swatting up today and by October you could be getting ready for the new seasonal trades.

Even if you only ever read a single chapter every day of your chosen strategy you’d soon be finished and hopefully a lot wiser. {If it’s a good book of course} it’s back to the slow and steady approach again. Bit by bit you’ll learn, not everything in one day, just keep it steady.

History repeats itself…

If you do get a chance to do some stock market research, look into the market gains and losses on presidential election years. It’s interesting reading if nothing else.

That being said… If I was going to look at any trades from now until October I’d most certainly be looking to go short.