Sell in May...or will it be, Buy in May??....

We officially ended the month with SPX closing at 872 after a sprint from the blocks to 888, today.    Who would have thought the SPX would churn in the mid 800 range most of the month of April.   Back in late March, most market pundits expected a pullback from this market and a retest SPX 780 or perhaps even lower.    Looking back, we just have to say "boy, are glad we made our adjustment quick"!    In the entire month of April,  we didn't even come close to approach the SPX 800 level and that alone is quite an achievement!.   So, while most scream tonight, a 'reversal bar...no follow through day..etc', we're really not concerned as we're not the the panicky type.   Reason is methodology,  we adjusted late March to what got us here and not be tied to every move on the SPY/SPX as most of the market had become.  We've been into individual- sub groups plays and now the market has walked into our hands where earnings plays are making this a ' stock pickers ' market!.   Did you notice the majority of those linked stocks did not act with the market turn?.   So, no big deal!.   Plus, the gains early on any stocks previewed gave you an exit with nice profits if that's your trade.

What do we have to look forward to now that we are out of April?   We expect to see exact same sentiment carrying forward with earning plays dominating the trading screen.    Whether you like it or not,  people have come to believe that we are in the early recovery process.

Right now,  we aren't going to debate or argue against the actual facts with regard to economic recovery.    If this is the sentiment shared by the majority of the trading world,  evidenced by the stock behaviour, then that's what we'll have to stick to.    After all,  this game is about pure psychology.    What you believe and what may actually happen are two different things.    As long as people act the way they believe,  that's how this market will play out which underlines our main trading theme.

Speaking of earning plays,  we had two MONSTER plays from GMCR FSLR  highlighted in last nights Journal.   Did they go limp with the market?   Both stocks simply exploded from the get go and they stayed strong till the end.    It feels like it's 2004,  doesn't it?     As we said, most of the stocks on our trading list finished green despite the softness from the financial sector.    What we are extremely excited to see these days,  is that earnings/guidance once again matters in this market.     This is simply the kind of proven play style we were so accustomed to back in the good days.   We are so glad the "good game" is back.    There have been numerous strong earning reaction as of late.   In addition to the obvious ones,  we're monitoring 'new names' ....AAN CTV IRM LIFE STAR EXPE SFLY ARRS TNDM,  some may become fixtures at DJIM heading forward.    Recent plays like NEU PENN  continued to churn higher.    Again,  when it comes to earning plays,  we'd always be aggressive buyers on first pullback....PENN NEU GMCR RGR CTV DDRX,   still, most 'new names' we're undecided on at this stage.

We may not have closed the day at the high,  but this just gives market enough time/ room to churn higher.   In our opinion,  the sooner we get to SPX 900+,  the sooner the party may end.   Therefore, we'd rather see this market take its time and allow us the traders to re-establish positions as we churn up.

Bottom line,  this market is giving everyone enough time to make a play or two.   It's absolutely crucial NOT to waste any opportunities in this trading environment.