Sell in may and walk away?

Market is at record levels
Its the month of may
The month most famous for record volatility (i.e crashes :) since the crash is usually a lot more volatile than the rally)

Get into 50% cash around 5/10 or 5/12 and stay nimble.

Defense is the best form of offense.
There are lots of shorting opportunities if you look around, why not trade a little short. Always remember the stock chart overrides the index chart. (same way that stock fundamentals override macroeconomic fundamentals)

The first thing I did before I put money into stocks was understand the fundas.
Read my old post on canslim on my other blog: http://niftytraders.blogspot.com.
Didn't take me too long , I think i remembered most of my economics from 9th standard and assorted reading I had done. P.E I had read in the books and I came up with my own version of earnings yield within 5 minutes when I was trying to convince my dad to loan me money to invest. I told him if you put your money in the bank its only 5-6%. If you buy a stock at a p.e of 6 then your share of the earnings are almost 16%. (At that time rolta was at a p.e of 5-6, look at the stock price now, these days you can get prithvi/aftekinfo for a p.e of 5-6, check back where these two stocks will be in 2-3 years)

The way i see it right now, nifty is at maybe 20x earnings?? and 20% growth expected??
So upside maybe 20%? risk maybe 10-20%?
Its not a screaming buy, but its a hold I guess. If we can take the market 10% higher then its probably a cleaner sell.



The next thing I studied was market cycles before I put any of my money into the market.
a) mars vesta cycle (just search for mars vesta cycle its a 4 year cycle or so)
b) lunar cycle (search google for lunatic markets or spiral calendar)
c) Dow from november to may cycle (or in Indian terms Diwali to republic day to pre tax march cycle, the most profitable time to be invested in the Indian market is between Diwali and new year)


http://biz.yahoo.com/cnnm/070430/043007_markets_sellinmay.html?.v=2

"
Money invested in the Dow stocks in the "best six months" and then switched to fixed income in the "worst six months" over 56 years grew to $544,323. But money invested in the Dow in the "worst six" and then switched to fixed income in the "best six" compounded to a loss of $272."