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The FTSE 100 has come full circle in the first four months of 2016, with the index returning to the opening price once more today. There is no doubt that many will be wondering whether the ‘Sell in May’ theory is coming back into prominence given recent weakness in the index. With that in mind, it is worthwhile understanding whether recent selling is indicative of something more widespread, or simply short-term.
The weekly chart below provides a good overview of the recent years, which turned from very gradual gains to sharp and volatile swings since the 2014 low of 6070. It also puts the current downside into some context, within which we can see if there are similarities of previous periods of downside.