You could almost predict what was going to happen in the market today.  After a strong morning rally which carried the Dow past the all important 13,000 plateau, the market sold off after the Fed announced a quarter-point rate cut.  The Dow was up 178 points and briefly traded above 13,000 after the announcement was made but quickly reversed course for the remainder of the day.  It was the first time the Dow had traded past 13,000 since early January.
 
For April, all three indicies posted nice gains for the month after a dreadful first-quarter.  The Tech heavy Nasdaq made the biggest jump, adding 5.9%.  The Dow advanced 4.54% while the S&P rose 4.75%.  Overall though, all three are down for the year.  The Nasdaq is down 9%, the Dow 3.35% while the S&P is down 5.64%.
 
If you notice the charts of all three, you will see that they are right around support and resistance from early January.  With earnings winding to a close and the Fed’s announcement, stocks will have to find a new way to rally.  There’s an old saying on Wall Street and it goes “Sell in May and go away”.  After traders are through vacationing, the theory is that the market is more active at the start of September leading into October which is historically the most volatile month.  These “seasonal patterns” are very clear and they can be a good guide but as option traders we could care less where the market is headed.
 
I just wanted to mention this because this rally could fade with no significant events taking place.  Second-quarter earnings will start in July and until then the market will likely trade off economic reports.  That in itself could be a mixed bag of tricks so be careful out there. 
 
Rick Rouse