Scott Burrill - Market Notes

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Scott's notes
Scott's Market Notes

Sell in May

May 4, 2020

Since the Crisis began, it's interesting to visualize what's working in the S&P 500 Sectors.

And compare that to how strong the sector relative outperformance is since the lows of March 23.

And then dive into the top 100 holdings.

Health Care, Technology, Discretionary, Staples, and Telecomm have powered the risk-on growth and momentum rally.

But, with implied correlation turning our focus back to macro factors, and mixed signals from major markets these past two weeks, begs the question: Is the market setting-up to sell off as partial state re-openings are appraised with enduring physical and societal health?


Seasonality in May, on average, is not favorable when viewed across multiple periods.

Moreover, our conservative weekly trend monitor has yet to turn positive; although, other elements in our weekly dispersion signals became positive on April 9 while Volatility remains elevated.


Speaking of volatility, the S&P 500 Weekly Implied Move is + / - 107 points for a range of 2937 to 2723, or 34% implied volatility.


The Employment Situation Report, Initial Jobless Claims, and some Fedspeak dominate the Economic Calendar.


Earnings Reports will be analyzed for the impact of the pandemic and future firm prospects.


Updated Index, Commodity, and Treasury Levels.


Have a great week.

All the best,

Scott

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