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Markets have neared an important level near February peaks that likely results in a stalling out in US Equity indices this week into/post FOMC.  However, barring any meaningful signs of technical deterioration, it’s my opinion that weakness still likely proves minor and might allow for a rally into the middle of May.

The period from 5/17-24 looks like the most important time in May, and if markets are trending up into this period, it’s likely to coincide with a Spring peak for Equities.

As discussed last week, five reasons stand out as being a technical concern as markets have entered May, regardless of any real signs of technical weakness have gotten underway:

First, Seasonality turns negative this month following a sweet spot for above-average market performance as part of the four-year Election year cycle.  While the first quarter proved to be higher by +7% and April was higher by 1.75% in SPX, May historically has proven negative. Thus, seasonality looks like a headwind this month.

Second, Sentiment has gradually started to improve after five of the six “up” weeks and now a few polls have turned bullish.  Both Investors Intelligence and CNN’s Fear and Greed poll are quite positive with Fear and Greed ...

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