Friday, May 4, 2012

Buckle Up! Super Moon Is Here

On Saturday, May 5th, super moon will illuminate the dark night. Lunatics will flock to their telescopes attempting to find the extraterrestrial life on the moon, while stock market traders will probably be hiding in the foxhole, spooked by the big bowling ball in the sky. Moon has a mysterious way of affecting everything on Earth, including the financial market. Extra high market volatility is present when there is a full moon. Do not ask me why...

Interestingly, full moon usually brings a rally, and we may see one on Monday. But this time there may be an inverted affect, as all risk charts are now breaking down, including SPX, especially if head and shoulders neckline does not hold.

We had two very important data points to pay attention to this week: NFP and Chain Store Sales. Both disappointed and sent the bulls to the exits. I am now in the bear camp and would like to short the retracements (especially on Monday after full moon). It is a simple "Sell In May And Go Away" trading exercise, and nothing more than that. Aided by the slower econodata from around the world, this old-school tool should yield some outstanding profits for aggressive sellers.

Be well, and watch the super moon on Saturday night.

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