Why Sell in May Makes Sense this Year

The old adage, "Sell in May and walk away," may apply this year more than most. While we are through the month now, the adage actually applies to the period from May 1st through October 31st and implies that stocks tend to underperform versus the other six-month period from November through April. There are several substantive macro factors at play against stocks in this year's period. First of all, according to the Federal Reserve, it could raise interest rates at any of its upcoming monetary policy meetings, marking an important shift in policy. Concern about the repercussions of this on stocks has time and again impacted equity values in the recent past. Inflation seems to be heating up as well, and it could add impetus to the Fed's tightening plans. Secondarily, there's the intensifying concern about the economy and whether first-quarter weakness is something more than seasonal. Also, the European situation is coming to a head finally, and it appears a Eurogroup deal with Greece will not happen until the midnight hour, if at all. The Islamic State has apparently made a very direct threat to the U.S. recently that applies coincidentally to the next six months and could make for volatility. As a result, if ever there was a May to walk away from, it seems this one would be it. Read my report on Sell in May. SPDR S&P 500 (NYSE: SPY), SPDR Dow Jones (NYSE: DIA), Powershares QQQ (Nasdaq: QQQ), iShares Russell 2000 (NYSE: IWM), Vanguard Total Market (NYSE: VTI), iPath S&P VIX (NYSE: VXX).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Gold is in Danger Again this Week

Gold faces a serious threat again this week in the form of a strengthening dollar on intensifying questions about Greece and Europe. I expect the euro to come under further pressure against the dollar this week as Eurogroup parties take their debate into the midnight hour. As a result, the dollar could retest its former highs, and so I expect gold to test recent lows again. I believe the Greece issue is more likely to be resolved than not, but significant risk lies ahead that investors will not ignore. As the situation comes to a head, various related eventualities could drive heightened fear into currency trade and impact gold traded in dollar terms. However, the scarier the situation gets, the more solid a final floor for gold becomes due to its status as final safe haven against all currency concern. Thus, while traders may find opportunity to the short side near-term and while invested parties may make use of hedges against portfolio risk, long-term investors should hold on tight and wait out the storm. See my report on gold. SPDR Gold Trust (NYSE: GLD), Market Vectors Gold Miners (NYSE: GDX), iShares Silver Trust (NYSE: SLV), Direxion Daily Gold Bull 3X (NYSE: NUGT), Direxion Daily Gold Bear 3X (NYSE: DUST), Newmont Mining (NYSE: NEM).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Dead Cats Don’t Bounce

S&P 500 futures indicated the market would open to the upside last Wednesday morning, following Tuesday's important decline of 1.0%. Indeed, stocks found support near the index's 50-day moving average. However, what took them down on Tuesday will persist for at least this week and next, so beware the dead cat bounce. See my report on the Dead Cat Bounce. SPDR S&P 500 (NYSE: SPY), SPDR Dow Jones (NYSE: DIA), Powershares QQQ (Nasdaq: QQQ), iShares Russell 2000 (NYSE: IWM), Vanguard Total Market (NYSE: VTI), iPath S&P VIX (NYSE: VXX).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

IF THIS IS TRUE About Greece, Gold Could Find Support

In this very dynamic environment critical issues are influencing security values minute to minute. An important development around Greece, if it plays out, sets the floor for gold here temporarily. Recently, I warned gold should decline and the SPDR Gold Trust (NYSE: GLD) should drop toward $113 or lower, however this news that Greece could get a reprieve from the IMF for its June 5 payment sets the floor here for gold just above that level. I had suggested long-term investors hold gold through the storm, so you'll be glad to hear I think this latest storm perhaps just blew over. However, look for this issue to set up against gold again starting perhaps this week or sometime around mid-June if reports of a pending agreement between Greece and the Eurogroup prove faulty. See the report on gold and Greece. SPDR Gold Trust (NYSE: GLD), Market Vectors Gold Miners (NYSE: GDX), iShares Silver Trust (NYSE: SLV), Direxion Daily Gold Bull 3X (NYSE: NUGT), Direxion Daily Gold Bear 3X (NYSE: DUST), Barrick Gold (NYSE: ABX).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Real Estate – A Lesson for You

If I have taught you anything about real estate it's this: Do not to take mortgage data too seriously around 3-day holiday weekends. With regard to this week's data and next week's, I suggest real estate enthusiasts simply ignore the application activity. The Mortgage Bankers Association (MBA) data regularly shows wild swings around holidays because of some imperfections with the seasonal adjustment process. See the real estate report. iShares US Real Estate (NYSE: IYR), SPDR S&P Homebuilders (NYSE: XHB), J.P. Morgan Chase (NYSE: JPM), KB Home (NYSE: KBH), Radian Group (NYSE: RDN).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Are You Surprised About Real Estate?

Are you surprised real estate is doing well? Readers of this column should not be, as I have been pounding the table this year that 2015 would be a strong one for real estate. The data is proving me right now. Expect more good news as the year progresses and another good year in 2016 as well. See my real estate report. iShares US Real Estate (NYSE: IYR), SPDR S&P Homebuilders (NYSE: XHB), Bank of America (NYSE: BAC), Pultegroup (NYSE: PHM), MGIC Investment (NYSE: MTG).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Facebook (FB) – Let Flighty Capital Fly & You Sit Tight

By now everyone should be aware of the fact that Facebook (Nasdaq: FB) reported excellent earnings results. But the stock has come off its highs reached ahead of the report nonetheless. That is because its performance, however excellent, was not good enough to keep the scarce capital resources of less patient investors in the stock at its valuation. Long-term holders, patient and willing to achieve a better than 20% annual appreciation rate in this stock will be rewarded, but impatient speculative buyers who took positions into its earnings will seek more prospective pastures through earnings season. I suggest investors let the trading capital run away for now; it’ll return again at higher price levels to support even higher levels later on down the road. See my report on Facebook (FB).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Chipotle (CMG) - Uncertainty Not Worth the Price

Chipotle Mexican Grill (NYSE: CMG) dropped 5.4% in after-hours trading after reporting its earnings. The company beat Wall Street expectations on the bottom line by 22 cents, but reported lower sales than expected and warned about a pork shortage that would affect its sales moving forward. The company also missed expectations for comparable store sales, and comparable sales are expected to moderate in pace significantly in 2015. The stock was valued richly heading into its earnings report. Thus, these new issues, which threaten to continue to drag on operational results this year, should cause investors to reassess and relocate capital. See my report on Chipotle (CMG).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Zombie Gold!!!

Gold sure looks like dead money, but is it really? The upside appears limited for gold for as long as the dollar is supported, but its downside risk seems even more limited. While gold may feel like dead money, catalysts exist in waiting that could lift it higher at a moment’s notice. Therefore, like a zombie, I suggest it’s worthwhile to let gold rest in your portfolio undisturbed. See my report on gold – SPDR Gold Trust (NYSE: GLD), Market Vectors Gold Miners (NYSE: GDX), iShares Silver Trust (NYSE: SLV), Direxion Daily Gold Bull 3X (NYSE: NUGT), Direxion Daily Gold Bear 3X (NYSE: DUST), Goldcorp (NYSE: GG).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Part II: The Real Catalyst for Recent Volatility

In Part I of this two-part series, I discussed the reasons that were popularly attributed to a recent market decline (in April). I indicated that despite my appreciation for the famous trader who voiced the list of catalysts, that when many reasons are given for market or stock activity, it usually indicates a lack of understanding for the one true catalyst. At the close of the report I promised to provide the real catalyst for recent volatility, so here it is – the third consecutive monthly uptick in inflation as indicated by the Core Consumer Price index. Sounds bizarre to some of you I’m sure, but the fact is that the market has reacted poorly to this data point more than once recently. That is because it threatens to raise Fed interest in a more rapid monetary policy tightening scheme. See my full stock market report – SPDR S&P 500 (NYSE: SPY), SPDR Dow Jones (NYSE: DIA), Powershares QQQ (Nasdaq: QQQ), iShares Russell 2000 (NYSE: IWM), Vanguard Total Market (NYSE: VTI), iPath S&P VIX (NYSE: VXX).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.