Week of May 4

Sell in May?

Recap of last week

Last week, we had of course FOMC and the Superbowl of Mag 7 earnings. I said, to expect new all time highs in the SPX on the back of earnings as the crowd writ large was underestimating the acceleration of the AI trade.

That was 100% the right call, while the crowd was declaring 7200 as a local top and for earnings to be a sell the news event. They were wrong as usual.

On a bigger picture time frame, SPX finished April up +10.4%, for its best month since November 2020. We were bullish the entire way up, while the majority missed the entire move.

As we enter the official beginning of May, with the index quite technically overbought and the Sell in May and Go away adage looming in the background, do we finally see some retracement?

Next move for markets