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Sell in May, Go Away? Not for Commodity Plays
Pinnacle Digest writes: Although the sell in May and go away philosophy worked well in many years prior, including 2011, it may not be the right strategy this year, specifically with commodity plays. Chris Ciovacco points out that in May 2012, investors are focused on whether central banks will print money or not. Largely, the belief is that central banks, specifically the Fed, will initiate some form of QE3 in the not too distant future. Naturally, this creates a ‘risk on’ trading mentality and commodities often benefit the most from money printing.
Ciovacco goes on to explain how May 2012 is looking a lot like May of 2010. And you’ll remember the golden buying opportunity that emerged in May 2010 which was followed by a massive commodities rally in the fall. This was an extremely profitable time for junior mining stocks on the TSX Venture Exchange.
Ciovacco breaks down the positive technical developments forming in the commodity market as well. His sentiment towards commodities is that the bulls remain in control.
Click here to read the full article with Chris’ technical analyses on the commodity market.