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Your May 2024 Guide

April delivered the S&P 500’s first losing month of 2024. Signaling weakness across the broader markets.

—Get your free May Calendar by CLICKING HERE

  • The S&P 500’s average return in April is +1.5%
  • This year, it returned -4.4%

There is no peace in the Middle East. 

Selling was driven primarily by…

  • Escalation of tension between the US and Isreal and Gaza
  • New conflict between Isreal and Iran
  • Profit taking from the market’s stellar start to the year

Now we head into the “Worst Six Month.”

Dow Jones Gain 1950-2022…

  • May-October … Average gain +0.7%
  • October-April … Average gain +7.3%

If you do indeed sell in May and go away, you’re not likely to miss much.

What to Expect in the Month Ahead

Image from Unsplash

Average return for May by index (election year).

  • Dow Jones -0.1% (-0.4%)
  • Nasdaq +1.0% (-0.2%)
  • S&P 500 +0.2% (-0.1%)
  • Russell 2000 +1.2% (+0.6%)

April is traditionally a strong month. But this year, it failed to deliver.

When the market fails to rally when it’s supposed to, that’s a warning for weaker periods ahead.

May/June are among the weakest months of the year. The April warning has us on the sidelines for now.

We expect increased selling and volatility right up until the November election.

Technicals

Over the past month…

  • The VIX closed above 16 several times—the first time since October 2023
  • RSI levels flirted with oversold conditions but stayed mostly neutral
  • The put-to-call ratio closed in oversold territory 10 times

VIX Daily Candles – Chart via thinkorswim

Our outlook is neutral. 

We don’t expect a major selloff without a bigger catalyst, but there’s not much buying interest at the moment.

Your Calendar

For the notable happenings of the month, CLICK HERE to download your free calendar now.

Earning season continues this month… use Earnings Whisper for weekly earnings report outlooks.

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