🚨🔥 Important seasonal warning! Surprises after April and what lies ahead! 📉
A discovery that changed my perspective on market seasonality: the seasonal effect differs fundamentally between bull and bear markets! It may seem obvious, but hidden patterns emerge when delving into the data. ✨
Discovery summary: 🤔
In bear markets: the effect of the saying "Sell in May" is very clear and strong.
In bull markets: this seasonal effect becomes weak or nearly nonexistent.
Where are we now? 📉
Using a simple indicator (the position of the index relative to the 200-day average), we find that the market is currently below this average.
This means we are dealing with a market that is technically in a downward trend.
What does seasonality say about the bear market during this period? 🗓️
Historically, the late April and early May period in bear markets often sees a short-lived recovery (like the one we might see now).
But the danger lies ahead: this recovery is usually followed by a renewed decline at an accelerated pace starting from mid-May onward.
What is the importance of this warning? ⚠️
If we rely solely on this seasonal signal, it indicates: the current upward rebound might be the last opportunity to exit or be cautious before a potential new downward wave.
But be careful! ✋
Seasonality is just one indicator among a set of analytical tools.
It is always best to combine it with deeper technical and economic analysis for a clearer picture. ✅
(As mentioned) other analyses indicate the presence of technical and economic pressures, which strengthens the weight of this seasonal warning.
Summary: 🔔
Conditional seasonality (related to being in a bear market) sounds the alarm:
Beware of the upcoming May... it could mark the beginning of a new phase of decline.