April Almanac, Vital Stats & Strategy Calendar: Best DJIA Month Since 1950 By: Jeffrey A. Hirsch & Christopher Mistal | March 28, 2016 | Email | Print

April 1999 was the first month to gain 1000 DJIA points. However, from 2000 to 2005, “Tax” month was hit hard, declining in four of six years. Since 2006, April has been up ten years in a row with an average gain of 2.8% 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). 

 

April marks the end of our “Best Six Months” for DJIA and the S&P 500. On April 1, we will begin looking for our seasonal MACD sell signal and corresponding early signs of seasonal weakness. Even in presidential election years, the second best year of the four-year cycle, the “Worst Six Months” have experienced some nasty selloffs.

 

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. (For 2016, the deadline to file is Monday April 18. The normal date falls on Emancipation Day this year. This date is a holiday in the District of Columbia and is observed in the same manner as all other federal holidays.) The market is 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.

 

Normally bullish election-year influences (the second best year of the four-year presidential election cycle) have the exact opposite effect on April. Average gains since 1952 are approximately half of the average gain of all years since 1950 for DJIA and S&P 500. Largely due to a 15.6% loss in 2000, NASDAQ’s typical strength in all Aprils since 1971 is transformed into an average loss in election years.

 

 

Options expiration week frequently impacts the market positively in April and DJIA has the best track record since 1990, with an average gain of 1.3% for the week. The first trading day of expiration week has roughly the same record as expiration day, but expiration day has a softer average performance. The week as a whole is generally marked by respectable gains across the board and the week after exhibits similar track record just with lesser average gains.