Still having doubts? Take a look at the screenshots of the S&P 500 index from 2010 to 2012 on this ForexLive article. Coincidence? Now take a look at the S&P 500′s performance in May to October last year:
Apart from that sharp mid-month selloff, that decline wasn’t so bad! In fact, the index was off to a good start during the first couple of weeks in May 2013 then managed to trend higher until October.
Although the validity of this “Sell in May and go away” theory and the rationale behind the repeating market behavior is still debatable, several traders attest to this self-fulfilling phenomenon. After all, this seasonal trend has taken place for years and traders can be a little bit superstitious sometimes. Just ask Dr. Pipslow who insists on wearing his ratty old “lucky socks” while day trading!
Intermarket analysis tells us that price action in the equity markets has an impact on forex price movements. A sharp selloff in the stocks, which usually takes place when traders rush to close their long positions, could lead to risk-off market moves in the forex arena. This suggests that safe-haven currencies such as the U.S. dollar or lower-yielding ones like the Japanese yen could gain support while higher-yielding and riskier currencies like the comdolls could lose ground.
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AUD/USD regains the constructive outlook above the 200-day SMA
AUD/USD advanced strongly for the second session in a row, this time extending the recovery to the upper 0.6500s and shifting its focus to the weekly highs in the 0.6580-0.6585 band, an area coincident with the 100-day SMA.
EUR/USD keeps the bullish performance above 1.0700
The continuation of the sell-off in the Greenback in the wake of the FOMC gathering helped EUR/USD extend its bounce off Wednesday’s lows near 1.0650, advancing past the 1.0700 hurdle ahead of the crucial release of US NFP on Friday.
Gold stuck around $2,300 as market players lack directional conviction
Gold extended its daily slide and dropped below $2,290 in the second half of the day on Thursday. The benchmark 10-year US Treasury bond yield erased its daily losses after US data, causing XAU/USD to stretch lower ahead of Friday's US jobs data.
Bitcoin price rises 5% as BlackRock anticipates a new wave of capital inflows into BTC ETFs from investors
Bitcoin (BTC) price slid to the depths of $56,552 on Wednesday as the cryptocurrency market tried to front run the Federal Open Market Committee (FOMC) meeting. The flash crash saw millions in positions get liquidated.
FOMC in the rear-view mirror – NFP eyed
The update from May’s FOMC rate announcement proved more dovish than expected, which naturally weighed on the US dollar (sending the DXY to lows of 105.44) and US yields, as well as, initially at least, underpinning major US equity indices.