JTH

Good morning

It was a painful week for investors, and this month has felt downright bloody, but if we step back and look at the bigger picture, the reality is the S&P 500 is down only -.49% MTD. It’s not the prices drop that’s been scary, but the relatively short amount of time it’s taken for those prices to drop. If you feel like you’re getting shaken from your conviction to stay invested, perhaps this chart of April’s returns over the last 60 years will help convince you of the significance of being invested this month. To balance this out with some caution, usually one of the two peaks within the year is either in April or May.

Attachment 23460

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Instead of posting a chart with just averages, this is a bar chart of cumulative returns, with 2013 highlighted with yellow boxes, and the average returns posted on the columns to the right. This gives us some advantages over looking at the typical charts posted. For one thing, averages can be skewed by very strong or weak events, not giving us an accurate picture of the reality of where prices fall most of the time. This chart also gives us the ability to see the performance of where 2013’s weeks 1, 2, & 3 stood in comparison with previous years. If you count the green boxes from the bottom to top, (stopping at the yellow box) we can see week 2 was the 5^th best week, over the last 21 week 3 Aprils, while counting the red boxes from the top down, we can see week 3 was the 2^nd worst.

Week 4 is typically a strong week, but as we transition week 4 into week 5, the weakness tends to take over. Over the past 20 years there have been only 5 week 5s, that’s why there’s less data in this column.

Attachment 23461


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This week we’ll have days 16-20. Be cautioned by day 20, it tends to see some strong moves as it’s usually the last day of the month, but this year we’ll have a day 21 & 22, so the weakness might not show up until the following week.

Attachment 23457


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Our Monday chart shows a negative bias for the previous 25, 50 & 100 Mondays. . Last week’s -2.30% Monday is the first bar on the right and over the last 50 Mondays, only 38% have closed positive. The good news is, of the last 25 Tuesdays 72% have closed in the positive.

Attachment 23459


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As for the intraday data, we can see how the first half of the day has a strong negative bias, but it does tend to level out post IFT dead line.

Attachment 23458


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Looking ahead, I expect this market to resume prices to the upside within the next few days, but I do not expect the markets to make new 52 week higher highs because of the technical damage. From my perspective the downtrend remains intact under 1575 and I wouldn’t be surprised if we started to develop a 1550-1575 trading channel. Anything south of 1530 and I may eject.

Trade safe...Jason

---------------------DISCLAIMER--------------------
The majority of this data is based off the S&P 500's past prices, typically over the last 20 years. If this data does not come from the S&P 500, then I will state what index it is derived from, otherwise assume it is of the same source. While most of the data is computer generated, much of it is still done by hand and is therefore subject to the occasional human error. Past data does not guarantee future results! We are all grownups here so we should already know we are each individually responsible for our own accounts, so if it doesn't work out, it's your own fault. Occasional I get PMs from newer members, asking me what to do with their accounts, so here's my answer. Find out what DCA is then do it for a long time. In the meantime read, read, read, then practice what you read, then figure out where you screwed up, then start the process all over again.