Veteran traders have heard it before. Sell in May and Go Away. The idea behind the catchy strategy is warning traders of increased volatility and lower trading volume during summer months.
Some would argue this summer is the proverbial poster child for this strategy. An uncertain and highly divisive U.S. political landscape, a likely rise in interest rates this June and international turmoil such as the Brexit are just the tip of the iceberg. It’s no wonder long-side traders are thinking of pulling money from the market and sticking it in their mattresses.
But, the fact is that even the most bullish bulls can make money from the long side during the summer months. A blind strategy is a poor strategy unless you’re trying to leave money on the table.
If not ‘Sell in May and Go Away’ then what?
The quick answer is that there’s always an opportunity to make money with the right tools and understanding.
On the economic front, there are bright spots that could drive the market higher. The U.S. economy is stronger than the breathless media contends despite their efforts to suggest an apocalyptic recession is on the horizon. New U.S. single-family home sales surged to an eight-year high in April and home prices hit a record high. The usually strong spring housing market could even be stronger if only there were more homes for sale.
While all this positive economic news is great, it doesn’t mean that traders should blindly buy the SPY or other long-market ETFs this summer for the sheer fun of it. Understanding which opportunities are strong stocks that have an established upward trend is the other half of this equation. Utilizing the proper tools and strategies to navigate expected summer market volatility will be how traders can use this positive news to create personal financial gains.
Instead of taking the “Sell in May and Go Away” approach, you may want to capture stocks that are in a short-term uptrend. As more of a swing trader, traders will typically hold a position for a few days up to a couple of weeks. Summer is no time to force your desires on the market. If the market tells you to get out, then do it. Light volume can exacerbate moves. Your timing will be more important than ever
Having a tool that can help your timing and give you an accurate forecast 1-3 days in advance will be crucial to your timing strategy. VantagePoint Intermarket Analysis Software provides that forecast with up to 86% accuracy.
The proprietary and patented market-leading forecasts put bulls ahead of the rally to get you in an upward trending stock before most other traders know what’s happening. How is this possible? By utilizing artificial intelligence to identify intermarket relationships and analyze the strongest drivers and pullers for a particular market.
By using the right tools, and modifying your strategy to adapt to the market conditions, you don’t have to “Sell in May and Go Away.” Instead, you can put yourself in a position to find profitable positions in any given season. Smart traders find ways to make money. And we all want to be smarter traders don’t we?
VantagePoint Forecasting in Action
We’ve captured a few examples of growth in the below video to demonstrate how bullish trends do happen in May. You just have to know where to find them, and when to do something about them.
In this video we review the following recent moves:
- L3 Communications ($LLL) which increased 26.69% ($21.41 per share) over 49 trading days.
- Boston Scientific ($BSX) which increased 31.82% ($5.67 per share) over 70 trading days.
- Integrated Device Technology ($IDTI) which increased 11.11% ($2.28 per share) over 16 trading days.
- Sanmina Corporation ($SANM) which increased 17.62% ($3.91 per share) over 22 trading days.
To learn more about how to use VantagePoint and see firsthand how our patented, predictive forecasts can help you request a free demo.