Donald Coxe, Global Portfolio Strategist of BMO Financial Group, has just published the May issue of Basic Points – Traders of the Lost Ark (courtesy of GreenLightAdvisor). This report is a firm favorite with investors as Donald has established a great “big picture” track record and built a large following over the years. His eloquently phrased investment recommendations are particularly insightful and are repeated in the paragraphs below in an attempt to make sense of the troubled times encountered by financial markets.

1. Assume that the leading US forecasters on the US economy will be cutting back on their economic and earnings forecasts. You could be pleasantly surprised, but

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There are many Wall Street adages. Some seem to have predictive power, including the idea that one should "sell in May and go away." Such slogans have extra influence because of the catchy, alliterative qualities. When Indicators Conflict There are a number of conflicting adages at the moment. There is the Presidential Election Cycle. We have not been big fans of this because the causal model is elusive. This year, however, we have both the Fed eases and the stimulus package. If ever the theory were to work, this might be the time. We also note that the popular bearish commentators embraced the theory when it suggested market weakness, but have fallen silent during the period when it suggested strength. This should be interesting to contrarian investors. There are technical considerations. Can the market break through apparent resistance? That is the current battleground for traders. There ...