≈ Let there be blood in May. ≈
— D’you know that there is this old adage that says “Sell in May and go away.”?
— D’you know that you are supposed to sell back your positions and get out of the market during the next 6-month period?
— I’m clean now. All positions are gone. I want to go on vacation and not worry about losing money. How ’bout you? Are you going to also quit and only get back in November?
Which one came first? Egg or hen?
If people—and by proxy, institutions, and robots built by people—think that the period that goes from May until October is filled with dark days, they take their money off of the table and end up causing the sell-off they have feared in the first place. Like a dog chasing its own tail.
Historical lower returns on the broad market (S&P 500 and other major indices) do not mean you can’t make money, right? The S&P 500 is not the stock market per se, but just an index. It’s like an avatar. However, due to its size and importance, it has become the market itself, moving it up and down with the strength of a Tsunami.
Whether it’s a self-fulfilling prophecy or not, it doesn’t matter. Tackle Traders will make money just the same.
If there is a sell-off, investors will buy great businesses at a discount.
If you are a cash flow trader, sell-offs are perfect for selling premium.
If you are a directional trader, you will sharpen your skills. And make money.
Where people see risk, we see opportunity.
Let there be blood in May. We’ll buy and stay.
Chart of the Day
Are you afraid of the red?
The chart above shows 6-month returns for the S&P 500 Index, from 1950 to 2018.
Question: Are you afraid of those reddish color tones? Please, don’t. Tackle Traders make money regardless of them. Attend our shows and read our reports so you can stop believing in monsters.
(Source: LPL Research, April 2019)
Video of the day
How to estimate reward to risk ratio on a bearish trade
In this video, we will show you how to use a simple and easy to use tool that will automatically do the math for you and help you make better trading plans quickly.
Today’s line up
Traders Lounge 11PM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Cashflow Club 8:30PM EST
Held every Thursday, this show helps you perfect your favorite cashflow strategies.
Halftime Report 12:30PM EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day and fun in a way that only Matt and Tim can deliver.
The Market Recap is designed to give you a quick overview of the day that was. While brief, this report is designed to cover all of the major events that drove the markets that day and help you plan for the trading day ahead.
Financial freedom is a journey
Sign up now and gain unfettered access to all of the quality content and powerful Scouting Reports that our Pro Members enjoy for 15-days absolutely free with no strings attached and let us show you what your trading has been missing.
Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.
All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.