The saying “sell in May and go away” definitely did not hold true this May. The main index of the New York Stock Exchange, the S&P 500, actually strengthened by about 1.3 percent in the fifth month of this year. Furthermore, Wall Street is very close to entering a bullish sentiment in the stock market. It only needs a few more points for the S&P 500 index to enter the territory that defines a bull market.

At the end of last week, the main index of the New York Stock Exchange, the S&P 500, gained nearly 1.5 percent.

It achieved almost the same growth in one trading day as it did on average for the entire month of May. While this may seem like relatively low performance for just one month, May is traditionally a rather weak month for stock markets.

After all, there is a saying “sell in May and go away.”

However, this well-known proverb did not hold true this year. Moreover, if the S&P 500 had closed just ten points higher, Wall Street would have technically entered bull territory. Only those ten points were missing to meet the criteria for reaching a bull market, which states that the main index of the exchange must strengthen by at least 20 percent from the point of the last upward reversal.

The New York Stock Exchange hit its local bottom last October when the S&P 500 index bounced back from the value of just under 3600 points. Since then, there have been occasional speculations that the bear market has ended, but only now is the bull market within reach.

And most likely, Wall Street will enter it this week. Good news has come from the USA, especially regarding reaching an agreement to raise the federal government’s debt ceiling.

Source: Smith – Barron’s.com