Look Out Below?

May 1st was a key date for the market this year, as it was last year.

July 22 was another key day last year. Could it also be this year?

There are some similarities, including a summer rally that has the market in another triangle formation. The direction of the breakout from such a formation frequently determines the market’s direction for a while.

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This is also an options expiration’s week, and the market tends to be positive into Friday’s expirations. It then tends to be down the week after the July expirations (about 70% of the time), sometimes significantly. For instance it was down 4.2% the week after July expirations in 2007, and 4.3% in 2008.

But we had some uncertainties in the economy in those years. We don’t have any this year- do we? 

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