April Almanac, Vital Stats & Strategy Calendar: Up Nine Years in a Row By: Jeffrey A. Hirsch & Christopher Mistal | March 26, 2015 | Email | Print

The first trading day of April and the second quarter, has enjoyed exceptional strength over the past 20 years, advancing 16 times with an average gain of 0.56% in all 20 years for S&P 500. Declines occurred in 2001, 2002, 2005 and 2013. In 2013, April 1 was also the day after Easter which has been the S&P 500’s worst post-holiday trading session. From 1984 to 2003, S&P 500 declined 16 times. In the ten years since, S&P has been up seven times, but down three of the last four years.

April marks the end of our “Best Six Months” for DJIA and the S&P 500. On April 1st, we will begin looking for our seasonal MACD sell signal and corresponding early signs of seasonal weakness. Our recent Official Seasonal MACD Sell Signal Alerts on April 9, 2010, April 13, 2011, April 3, 2012, April 1, 2013 and April 7, 2014 proved rather timely as the market ran into trouble shortly thereafter in 2010, 2011 and 2012. In 2013 and 2014, the market did log modest gains during the “Worst Six Months”, but increasing volatility made it a tense ride. 

April 1999 was the first month to gain 1000 DJIA points. However, from 2000 to 2005, “Tax” month was hit, declining in four of six years. Since 2006, April has been up nine years in a row with an average gain of 3.1% to reclaim its position as the best DJIA month since 1950. April is third best for S&P and fourth best for NASDAQ (since 1971).

The first half of April used to outperform the second half, but since 1994 that has no longer been the case. The effect of April 15 Tax Deadline appears to be diminished. Traders and investors are clearly focused on first quarter earnings during April. Exceptional Q1 earnings and positive surprises tend to be anticipated with stocks and the market moving up in advance of the announcements and consolidating or correcting afterwards.

Typical pre-election year strength does bolster April’s performance since 1950. April is DJIA’s best month in pre-election years (+4.2%), second best for S&P 500 (+3.6%) and third best for NASDAQ (+3.7%). Small caps, measured by the Russell 2000 also perform well with gains (+3.4%) in seven of nine pre-election year April’s since 1979.

Options expiration week frequently impacts the market positively in April and DJIA has the best track record since 1990, with an average gain of 1.4% for the week with just five declines in 25 years. The first trading day of expiration week has a slightly better record than expiration day and the week as a whole is generally marked by respectable gains across the board. The week after has a softer long term-record; however since 1994 gains have become the norm. Over the past 21 years, NASDAQ and Russell 2000 have finished April better than DJIA and S&P 500. See Bullish and Bearish days in Vital Statistics table below.