Hello everyone, here's a
quick videoon the Sell in May and Go Away Statistics you've heard about.
I also show the statistics and examples as attachments.
100,000K invested in 1950 and only kept in the market from May
1st until Oct 31st and was in cash for the other 6 months of the
year actually lost $-14,000, or 14%!
100,000K invested in 1950 and only kept in the market from Nov
1st until May 1st and was in cash for the other 6 months of the
year turned into 5.7 million, this is compounded
$100,000 invested for the entire time since 1950 i.e. buy and
hold and never going to cash turned into 6.2 million.
However I've improved upon the sell in May and Go Away by
employing a MACD for an earlier entry than Nov when the signal is
generated, or holding after May 1st if the MACD is still positive.
Also I added an ADX indicator that will sometimes hold the
trade for months after the general May 1st sell signal if the trend
is really strong and thus catching huge runs that would have
otherwise been missed. 100K, turned into $10.6 million.
Watch the videoand see the attached examples. The 3rd attachment shows
the improved strategy, while the last chart shows a situation where
the ADX indicator would have held a trade well past May and into
Aug where the trend was really strong, thus catching another 14%
rally in the Dow. There are numerous examples of this from
the past
however if you see my write up, I have a modified version that
holds past May if the MACD and ADX are positive, if the market
holds up until May, then this version will hold until these
indicators give a sell signal
Again remember the market has had a very good first strong
quarter. Take a look at these statistics since 1950, out of
38 years, ONLY 2 of them ended up negative, while 36% ended
positive with the average net gain for the year as 16%! Those
are very strong stats especially the year end gains. As I've
said before odds strongly favor that the market closes up for the
year by Dec 31st
However that DOESN'T mean that you can't get a decent pullback
in 2nd or 3rd quarter with the sell in May and Go away playing out
to a degree, then you get a strong 4th quarter to close out the
year with strong gains.
What McClellan didn't tell you was that you still typically got
a pullback in the summer time or fall, but of course you still
ended the year positive. McClellan is averaging the whole
year, but we care about what will happen over the summer or fall.
year end, yes I bet the market will close positive.
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Sell in May and go away Statistics
Posted by matt on 26th of Apr 2012 at 04:38 pm
Hello everyone, here's a quick video on the Sell in May and Go Away Statistics you've heard about. I also show the statistics and examples as attachments.
100,000K invested in 1950 and only kept in the market from May 1st until Oct 31st and was in cash for the other 6 months of the year actually lost $-14,000, or 14%!
100,000K invested in 1950 and only kept in the market from Nov 1st until May 1st and was in cash for the other 6 months of the year turned into 5.7 million, this is compounded
$100,000 invested for the entire time since 1950 i.e. buy and hold and never going to cash turned into 6.2 million.
However I've improved upon the sell in May and Go Away by employing a MACD for an earlier entry than Nov when the signal is generated, or holding after May 1st if the MACD is still positive. Also I added an ADX indicator that will sometimes hold the trade for months after the general May 1st sell signal if the trend is really strong and thus catching huge runs that would have otherwise been missed. 100K, turned into $10.6 million.
Watch the video and see the attached examples. The 3rd attachment shows the improved strategy, while the last chart shows a situation where the ADX indicator would have held a trade well past May and into Aug where the trend was really strong, thus catching another 14% rally in the Dow. There are numerous examples of this from the past
Matt, McClellan said the "Sell in
Posted by sethbru on 26th of Apr 2012 at 04:45 pm
Matt,
McClellan said the "Sell in May" rule usually does not work in Prez election years. Can you run your stats against that? Thanks.
Where did you find this info?
Posted by ragwing on 27th of Apr 2012 at 11:09 am
Sell in May and go away Statistics
Posted by matt on 26th of Apr 2012 at 05:04 pm
Yes I can, but I have to add those rules
however if you see my write up, I have a modified version that holds past May if the MACD and ADX are positive, if the market holds up until May, then this version will hold until these indicators give a sell signal
Again remember the market has had a very good first strong quarter. Take a look at these statistics since 1950, out of 38 years, ONLY 2 of them ended up negative, while 36% ended positive with the average net gain for the year as 16%! Those are very strong stats especially the year end gains. As I've said before odds strongly favor that the market closes up for the year by Dec 31st
However that DOESN'T mean that you can't get a decent pullback in 2nd or 3rd quarter with the sell in May and Go away playing out to a degree, then you get a strong 4th quarter to close out the year with strong gains.
What McClellan didn't tell you was that you still typically got a pullback in the summer time or fall, but of course you still ended the year positive. McClellan is averaging the whole year, but we care about what will happen over the summer or fall. year end, yes I bet the market will close positive.