The last few years have seen very similar trajectories in the first (and second) quarters of the year. Typically Q1 has been extremely bullish but has had a moment (or two) of doubt that caused weakness that inevitably bought. In fact, while many look on at 2013 as an outlier year (which it is over the entire quarter), since it's early March lows 2013 is lagging the performance of markets on average the last few years, even as Treasuries follow very similar seasonal paths. Over time, the sell-in-May-and-go-away' truism has become more pronounced (as we explained recently from a causation perspective [3]) but the following chart shows that no matter how excited we were in each year in the first four months of the year, May (alone) has not been a good month...
2013 has been a banner year for the first four months... but seasonals are not in its favor...
[4]
and in fact, off the March lows, 2013 has been lagging previous post recovery years...
[5]
But Treasuries appear to following the seasonals extremely closely...
[6]
Charts: Bloomberg