The S&P500 has a very strong seasonal pattern from now until the end of April. One of the sayings in Wall Street is ‘Sell in May, and go away’. It seems that one of the last big pushes in the US index comes as we approach May.

The shares are entering a strong time of the year. From April 14 through to May 1 the shares have gained 18 times in the last 25 years. The average return has been +1.87% over the last 25 years with a 49.93% annualised growth rate. We have removed the outlier year of 2022 as markets started pricing in aggressive Federal Reserve rate moves.

Will S&P500 shares launch higher next week in line with the seasonal pattern or is the environment wrong for more gains?

Trade Risks: The main risk to this trade is some negative news for US stocks which sends them lower.

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