The New CS Board

[dww10063]

Election year summer rallies. I'd add a caveat that market rallies off bear market or extreme breadth bottoms don't neatly fit into 4 year election cycles, but since I'm limited to 4 charts I'll show election years. I'm also not showing 2008 since it was a strongly down year leading to an extreme low, not positioned where we are now. Anyway, there appears to be a tendency for a May or June bottom, then a fast, hard to catch rally followed by some broad topping before a July or Aug higher or lower low, then another fast bounce before typical Oct or Nov bottoming. I think the best conclusion about trading summer rallies is that it takes agility and courage to do so, and the old adage "sell in May and go away" seems suitable for longer term trading. That said, we have a fine indicator double bottom with positive divergence on rsi5 and CCI34, so I'm a player here but not as aggressively as the short I recently got out of off the early May lower high. It may take some careful swing trading to play this market well before the next important price/breadth/sentiment/volatility bottom, so as usual caveat emptor and batteries not included. Best, Don