Since the S&P 500 made an intraday low of 1,536 on April 18, the widely-followed stock index has tacked on 130 points and the markets have migrated back to full-bore risk-on mode.

Wednesday Wind down?

Two key events this Wednesday could give investors an excuse to book some profits:

• Federal Reserve Chairman Ben Bernanke will speak before Congress.
• Fed minutes are due to be released.

There appears to be little evidence to suggest Bernanke will drift from his recent guarded optimistic stance on the economic outlook, which means his comments may be stock market-friendly. On the Fed minutes front, the release is based on the meeting when the statement "The Committee is prepared to increase or reduce the pace of its purchases…" was added. The key term was "increase". Therefore, the minutes may prove to be dovish or stock market-friendly as well.

Hard To Predict Market's Reaction

Even if we

As of this morning, 88% of S&P 500 companies are trading above their 50-day moving averages. This is a very high reading, but it's not quite as high as the reading we saw back in January.

(click to enlarge)Looking at the ten major sectors, the Consumer Discretionary

Old Investment Saw

I have often heard the investment saying "Sell in May and go away." However, being a committed long-term investor, it was an anathema for me to think about pulling funds out of the market for extended stretches of time. After all, doesn't the market go up 2/3rds of the time? (Which is yet another common investment saying.)

On the other side of the coin, I remember all too well a number of horrific periods during the summer months where I was wondering what I was doing in the markets. At times, it seemed the market was capable of only one behavior and that was to go down.

The Study

So with that in mind, I thought I would look at some recent history to understand whether there is any truth to "Sell in May." Or whether the approach of not making any seasonal adjustments is a more