Good Tuesday afternoon, friends and fellow traders. Well, we can't say we're entirely surprised Monday's rally effort fizzled on Tuesday. The market's been moving in fits and starts for weeks now, and there's nothing that's happened in the past few days to break stocks out of that rut. We're still mostly trapped in a range, and this kind of short-lived volatility is just par for the course at this time. We'll snap out of it eventually, but until we do, we're going to be leery of any seemingly-strong moves. We'll take our usual detailed look at the market below, but first, I want to congratulate those of you who are members of the Elite Opportunity service. The EO just booked a 27% gain on its WhiteWave Foods Company (WWAV) position, which it only stepped into in October. That gain follows the 85% gain John Monroe and his team recently booked on JetBlue Airways Corporation (JBLU) for Elite Opportunity subscribers. While obviously not every trade Elite Opportunity members get works out quite that well, more than enough of them do to make a huge difference in members' bottom lines. Heck, one or two good trades from the Elite Opportunity could more than cover your subscription costs. After that, the winning picks are pure upside. If you're not a member of the Elite Opportunity service, you're probably not getting everything you can out of the market. To take your portfolio to the proverbial next level - and to make sure you don't miss out on the next JetBlue of WhiteWave - do yourself a favor and sign up for the EO newsletter today. I think you'll be glad you did. (I know the folks who owned JBLU and WWAV on John's suggestion sure are.) Here's how to get it, or just cut and paste this link: https://www.smallcapnetwork.com/pages/SCNEO/v1/ Time to Sell? Not Quite I'm going to guess most of you are familiar with the adage "sell in May and go away", which is simply a clever way of saying the month of May kick-starts a very lethargic period for the broad market that lasts until October. While it's my personal belief this thinking ignores some crucial details, there's no denying the statistics - the odds - generally support the premise. A couple of confusing commentaries were recently posted, however, suggesting that selling at the beginning of April rather than the beginning of May was the wiser move to make. Had I seen it once, honestly, I wouldn't have even brought it up. Having seen it twice in less than 24 hours though? My curiosity got the better of me. I had to dig in and get the details. For the record, it was Mark Hulbert who penned the first such commentary "For stocks, the best time to sell and go away starts tomorrow". Bloomberg's Matthew Martin may have actually planted the seed first, however, with "Economist: Sell Your Stocks and Take Six Months Off." In Martin's write-up, he's feeding off of Saxo Bank's chief economist's Steen Jakobsen's idea. Hulbert is basing his conclusion on data from Jeffrey Hirsch's "Almanac Investor Newsletter" and Sy Harding's "Street Smart Report." And, though Hulbert's message is purely a calendar-based statistical one while Martin's is a valuation/economic one, the conclusion is the same - your best move is selling what you can tomorrow and heading to the sidelines until October. Our thoughts? All these guys may be right, but not for the reason they think they're right. As such, if their rationale is wrong, we'd just as soon not heed their advice. Rather, we're better served by doing what we always do, which is reassess the near-term and the short-term market every day, and make adjustments a necessary. Our doubts about the outlooks weren't just pulled out of a hat either. As for the Hirsh/Sarding theory that you're better served by playing the calendar's odds and statistics pointing out how every month - on average - from May through September is merely mediocre, we actually addressed this last year. Our concern is that while each of these six months may only average minimal gains alone, we should be looking at the average results for the entire six month span as a whole. See, it's entirely possible the last three months of the six-month span may be amazingly bullish or bearish even if the first three are lethargic, or vice versa.... or any combination thereof. The only way to know for sure is to go back and track the market's ENTIRE performance for every May-October span. Here's what we found. Disappointingly, the average summertime/early-fall return in its entirety only averaged 1.2%... ten basis points less than the sum of the monthly averages. Whoops. But... Over the past 63 years, the market has made at least some gain in the period between the beginning of May and the end of October a total of 39 times. It's only lost ground 24 of those times, so the odds are still in favor of being in the market rather than out of it. Moreover... The "worst six months for stocks" has largely been the victim of some unfortunate-yet-unforeseeable crashes. If you take out the worst five years - which were bad not for cyclical reasons but for systemic reasons (a policy-driven or recklessly-permitted crash) - the average gain for the six-month period rises to 2.9%. To be fair, taking out the top five gains for the six-month stretch, the average advance still comes in at 1.5%. Not great, but not bad. The point is, context still counts for a lot. That being said, even our historical data does NOT support selling at the beginning of April. Statistically speaking, April is a pretty good month for the market. If anything, you could argue the year-to-date gain of 0.5% is actually behind the year-to-date average gain of 2.0% we usually have at this point. This would imply at least a nice April gain is due now, if you're playing the odds. As for Steen Jakobsen, well, his thesis actually makes good sense. The only issue I have with his advice to "...reduce your stock portfolio to where it was on the first of January last year, put the money into cash and take a nice long summer holiday" is, since when was the market rational? Valuations and economic reality won't matter until they matter, and investors have been doing a great job of making sure they don't matter in recent months. They may well be able to keep doing the same right through the end of the year. I'm not saying this is the way things should be. We're just saying, the market doesn't always to what it's supposed to do. Look, the market may well begin a long-term pullback tomorrow. We just don't know. There's no need to jump to that conclusion though, and there's no reason to we have to decide by tomorrow. As we've said many times of late, investing is a day-to-day affair right now. Though we encourage everyone to think long-term, we have the choice to rethink the market's future every single day, processing new information as we get it. That's our long way of saying, let's assume nothing, and act based on what we see rather than acting on what we think we should see (and this is coming from a guy who's been lamenting the market' frothy valuation for a while now). Goodbye Q1... and Good Riddance For the same reason we didn't want to get too excited after yesterday's big gain, we can't get too worried about today's loss. The market has been and continues to be stuck in a range. While today's dip under the S&P 500's 20-day and 50-day moving average lines and the effort from the VIX to rally again is technically bearish, the bears still have some major hurdles to clear before we can say they're firmly in charge. Ditto for the bulls. Here's the daily chart of the S&P 500, for what it's worth. Until the index breaks above 2118 or below 2040, there's just no reason to worry about any of these moves. Here's the weekly chart of the S&P 500, for no particular reason other than to show you we're still trapped in a range (albeit a bullish one) in this timeframe too. We're close to seeing a break under a major floor on this chart, but we were close last week and three weeks ago as well, and it didn't matter then. The only thing that's really gnawing at me about the weekly chart is how it seems like the VIX is trying to figure out a way of pushing up and off its floor at 11.8 and make its way to the ceiling around 21.5. If the VIX breaks above the 17.3 mark [see the daily chart for details], at that point it's pretty much committed to a move to 21.5. The problem for stocks in that possibility is, it will coincide with the S&P 500 breaking under 2040. If that breakdown takes shape, that's when the selling flood gates could open wide. We'll just have to wait and see how it all shakes out. The good news is, with the end of the calendar quarter now in the rear-view mirror I suspect a lot of whatever was holding the market back is no longer going to be a factor come tomorrow, April 1st. We should finally start to see some trade-worthy movement ahead. Though I'm still leaning bearishly, I'm keeping an open mind. Stay tuned. It should be fun. Oh, and don't forget to check out the Elite Opportunity service if you're looking for ways to get more out of the market. The JetBlue and WhiteWave trade were just a couple of the big winners John and his team have dug up lately. Here's the deal.