Sell In May Crowd Is Out Early This Year

“Today was one of those days to TAKE NOTICE. We reversed hard off highs and breadth grew strongly negative to the downside. Back below 208 support which is what we said we needed to stay above to remain constructive on this market. – April 28th”

$SPY that was part of the note sent out to subscribers yesterday as we reversed from positive territory and closed near the lows of the day and below short-term 208 support.

Today followed up with more weakness, breaking more support and on pace to convincingly close us below the 20 period EMA.

The bears finally have something to hang their hat on.

Support from early April was found around 202.50 and a re-test of that area is probably on deck in the near future and a place we’ll want to pay close attention to so we can better understand if this is a contained pullback or a larger looming correction.

Another interesting statistic to keep in mind pointed out by Ryan Detrick on Twitter earlier today:

The last day of the month has been very weak lately for the S&P 500. In fact, going back to November 2014 (17 months), up only 3 times.

— Ryan Detrick, CMT (@RyanDetrick) April 29, 2016

This doesn’t mean it’s time to panic, it’s simply a time to make adjustments (potentially) and re-asses your positions/exposure. Tighten up the ship.

The $IWM continues to be the bright spot in this market as it’s more gently testing the 20 period EMA today which is where support for this index has come throughout this uptrend.

For more in depth analysis covering all major markets check out my weekend video recap.