After a first day of the month rally that looked like it might have some legs sour IMF reports dropped the markets overnight and the selling continued into US market hours.
Bonds were the big winner as flight to safety became job one for risk managers. TLT is the best performing of our M11 bond basket followed by TIP....both ETFs have good volume but serious bond traders should keep an eye on JNK and HYG, which look ready for a possible breakout and have volume interest 2 to 4 times that of TLT..
The Ponzo updates this week closely mirror last week's updates so no new trend forecast changes at this time.
After digesting 6 separate well argued articles on the Sell in May thesis the best conclusion I can come up as a risk manager is that May to October is not necessarily bearish...it's just not bullish.
