May got off to a positive start. But a strong start to May has typically been followed by a dip in the next few days. This can be seen in the study below, which was featured in this weekend’s subscriber letter.

Of the 25 instances that rose on the first day in May since 1987, 17 of them closed lower 4 days later. Below is an equity curve that shows how it has played out over time.

I’ll note the big drop in instance 17 was the 2010 Flash Crash. Even without that instance there appears to be a solid downside inclination.

I will also note that while seasonality appears negative over the next few days, there was quite a mix of bullish and bearish studies featured in the subscriber letter over the weekend. I don’t view this as a reason to trade on its own, but it is a tendency that traders may want to consider.