Fed & Tariffs Kick Off “Sell(ing) in May”

Charts, Commentary, News, Stocks

Compared to typical May trading over the recent 21-year period, this May has veered off course earlier than usual. On the first trading day of the month, the Fed harshly squashed budding hopes of an interest rate cut and the viewed was confirmed on the second trading day leading to DJIA, S&P 500 and NASDAQ losses on the first and second instead of typical mild average gains. The market did enjoy a brief rally on the third, but it came to a crashing halt as attentions shifted back to trade negations with China. The implementation of 25% tariffs last Friday was initially overlooked, but the realities of the increasing probability of an extended and tumultuous negation process with China (not to mention another flare-up in the Mideast tensions) are hitting the market today. Should the S&P 500 finish the day down more than 1.9%, it will be the second worst day of the year. Only January 3, 2019 was worse, off 2.5%. If mid-May strength fails to materialize, the second half of May could be worse than the first half.

As always, please use protective buy and sell stops when trading futures and options.

Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in the forum will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

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Stock Trader's Almanac (1209 Posts)

Jeffrey A. Hirsch is Editor in Chief of the Stock Trader’s Almanac. His latest book "The Little Book of Stock Market Cycles" (Wiley) was published in August 2012. As a frequent participant in the MrTopStep IM-Pro Trading Room, he shares trading insights with our other professional traders and new traders eager to experience the power of collective intelligence. Join us today and get the edge only social trading can give you.

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