Market Briefs & Sentiment Outlook (MBSO)
Reported by Tony Carrion

http://www.market-harmonics.com

 

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May 1, 2017

 

 

   

 

  

 

Sell in May and Go Away?

The dip we discussed in the previous MBSO proved to be minimal and short-lived, which is evidence of a strong underlying market. Those applying the old "Sell in May and Go Away" adage may find themselves in for some disappointment, save for possibly late into the month.

 

 

Based on the price action for the broadest measure of US stocks, the Wilshire 5000 Index (W5000), we're looking higher to complete the wave 3 advance begun last June following the Brexit vote. The fifth wave within wave 3 should have more to go, with 3 to 5 percent of further upside possible over the coming weeks.

 

 

Some sentiment evidence that supports the outlook for higher stock prices can be found in the VXX, a tradable ETN that tracks the VIX. This too appears to be completing a third wave pattern, but to the downside. It suggests a spike up in volatility, which is normally associated with market fear, doesn't look likely until this measure trades lower from current levels. It should continue lower while 18.40 acts as resistance. It wouldn't surprise us to see this measure trading in single digits before the bull market ends.

 

To sum up, we'd expect these two measures to continue along their current trajectories to complete their respective third wave patterns, at least deeper into the month. 

 

You can follow the intraday and daily Elliott Wave analysis of US, European and Asia/Pacific stocks with a risk-free subscription to the Stock ProServices offered by Elliott Wave International.  Click for more information.

 


For intraday and daily Elliott Wave forecasts of US, European and Asian stock markets, we highly recommend the ProServices offered by Elliott Wave International where I am an analyst.

 

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