Sell in May, go away. Buy the rumor, sell the news.

As the markets are up 2% or so today, it may make sense to consider the old adages in todays blog title.  Sell in May and go away?  Maybe.  The rally which began in March seems to have been revitalized this week after two volatile but go nowhere weeks.  Is a 6.1 GDP reading really an improvement over 6.3 in Q4 of 2008?  Doesn't an economy that is dependent on consumers and a recession which reportedly began due to a housing crisis still have problems when unemployment is rising, charting a course for additional foreclosures just as foreclosures ARE rising and home prices ARE falling? As far as I know, unemployed homeless people do not buy stuff.  Buy the rumor, sell the news?  Frequently.  And as May 4 approaches, we may see the financials rally through Friday.  How they react Monday will depend on the details of the stress tests, and it is likely that the banks will sell-off.  The wild card is that the tests were more stringent than anticipated, then the results could be deemed positive, and the financials could move higher. Neither adage is an absolute, but next week will certainly test both.  Be alert.