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It’s that time of year to hear the “Sell In May” message. This theme usually applies to stocks. Could it also apply to Crude Oil?
The above chart compares Crude Oil and the S&P 500 the past four years.
A year ago, Crude Oil and the S&P 500 both peaked the first of May at (1) and then proceeded to create a series of lower highs and lower lows for the next 9 months.
To start off this year, both created reversal patterns (bullish wicks), forming double bottoms at the same time at (2).
Even though Crude Oil has rallied nearly 50% off its lows, it has just now retraced 23% of its declines off the 2014 highs and falling resistance at (3).
Crude and the S&P have been highly correlated the past couple of years. What Crude Oil does at (3), could become very important to the S&P 500 in near future.
I will be discussing this pattern and many more with Premium Members tomorrow, in our monthly “Connect Webinar Series”
I humbly feel what Crude does at (3), could be pretty darn important when it come to portfolio construction going forward.
Both peaked in May a year ago, will it be different this time???