A Look at the Monthly Charts

29Apr07

The Dow closed above 13,000 for the first time last week while the S&P 500 remains in striking distance to its all time high at 1552 and Nasdaq major trends seems to just getting started to the upside.

Recent economic reports suggest that US economic growth remains slow but US stocks remain resiliant by benefiting from overseas growth.  Earnings and private equity deals continue to keep bulls in the drivers seat.  Better-than-expected results has spurred analysts to boost estimates for first-quarter earnings growth to 9.4 percent from 3.1 percent two weeks ago. About $769 billion in U.S. takeovers have been announced so far this year, 51 percent more than at the same time last year.

Sell in May and go away?
History suggests we could be in for some profit taking in May, however, if US economic numbers suggest 2nd half growth with tame inflation, then we could see a nice summer rally.
quick facts:
- A $10,000 investment compounded to $544,323 for November-April in 56 years compared to $272 loss for May-October.
- Between 1985 and 1007 May was the best month with 13 straight gains, gaining 3.3% per year on average.
- Pre-Election Year Mays much better for NASDAQ and Russell 2000

A look at the charts gives us guidance of where we could be headed:

Not much change in trading account..   I might have to wait patiently for a better setup for a couple of weeks.

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