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Coolhand's Market Analysis

The Bull is Still in Charge

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The major averages posted gains for the month of April, but the S&P 500 was up only 0.39%.

Still, it was a gain.

Now we have entered the weaker of the two 6-month cycles. "Sell in May and go away" is an old adage and it has been largely a good one for those who follow it's longer term advice.

Mean returns & standard deviations for each fund for past 3-5 years-spx3-jpg

I posted this chart recently, which is a weekly chart of the S&P 500. I have embedded some envelopes above and below the 50 dma to gauge price action around that popular average. Price has been struggling with the upper 3% envelope for some time and last week price was rejected with a weekly loss from that level.

Mean returns & standard deviations for each fund for past 3-5 years-nyse-jpg

The NYSE paints a similar picture as price tagged that 3% envelope and closed out the week for a loss.

Does this mean the market has peaked on this last "up" cycle? Possibly. But sentiment is largely neutral so a bottom may come much quicker than the previous two bottoms.

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