April Almanac & Vital Stats: DJIA’s Top Month
By: Jeffrey A. Hirsch & Christopher Mistal
March 23, 2023
April is the final month of the “Best Six Months” for DJIA and the S&P 500. The window for our seasonal MACD sell signal opens on April 3, the first trading day of the month this year. From our Seasonal MACD Buy Signal on October 4, 2022, through today’s close, DJIA is up 5.90% and S&P 500 is up 4.16%. This is below historical average performance due largely to persistent inflation, a tightening Fed, regional bank uncertainties and Russia’s ongoing invasion of Ukraine. But before the “Worst Months” arrive, April’s solid historical track record could help reignite the market.
[Seasonal April Market Chart]
As you can see in the above chart of the recent 21-year market performance in April and pre-election years since 1950, the month has been nearly perfect with gains steadily building from the first trading day to the last with only the occasional and minor blip along the way. April 1999 was the first month ever to gain 1000 DJIA points. However, from 2000 to 2005, “Tax” month was hit, declining in four of six years. From 2006 through 2021, April was up sixteen years in a row with an average gain of 2.9% to reclaim its position as the best DJIA month since 1950. DJIA’s streak of April gains ended in 2022’s bear market. April is now the second-best month for S&P 500 and fourth best for NASDAQ (since 1971).
The first trading day of April and the second quarter, has enjoyed notable strength over the past 28 years, advancing 20 times with an average gain of 0.29% in all 28 years for DJIA. However, five of the eight declines have occurred in the last ten years. The largest decline was in 2020 when DJIA declined 4.44% (973.65 points). Other declines were in 2001, 2002 and 2005. S&P 500’s record on April’s first trading day matches DJIA, 20 advances in 28 years. NASDAQ’s recent performance is slightly weaker than DJIA and S&P 500, but the day is still bullish for technology stocks in general with more advances than declines during the same period. April’s second trading day has also been notably strong over the past 21 years.
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 (April 18 for 2023) appears to be diminished with bullish days present on both sides of the day. Traders and investors appear to be more focused on first quarter earnings and guidance during April. Expectations are somewhat low for the upcoming earnings season; company guidance will likely be even more important.
Typical pre-election year strength does bolster April’s performance since 1950. April is DJIA’s best month in pre-election years (+3.9%), second best for S&P 500 (+3.5%) and third best for NASDAQ (+3.6%). Small caps measured by the Russell 2000 also perform well (+2.9%) with gains in eight of eleven pre-election year April’s since 1979. S&P 500’s and NASDAQ’s single losing pre-election year April was in 1987. 
[Midterm April Performance Table]
Monthly options expiration week frequently impacts the market positively in April and DJIA has the best track record since 1990, with an average gain of 1.23% for the week with just seven declines in 33 years. The first trading day of expiration week has a slightly better record (based upon average gain) than expiration day while the week as a whole is generally marked by respectable gains across the board. The week after has a softer long-term record, but still has a bullish leaning record.
Good Friday (as well as Passover and Easter) lands in early April this year. Historically the longer-term track record of Good Friday (page 100 of STA 2023) is bullish with notable average gains by DJIA, S&P 500, NASDAQ, and Russell 2000 on the trading day before. NASDAQ has advanced 20 of the last 22 days before Good Friday. Monday, the day after Easter has exactly the opposite record since 1980 and is in the running for the worst day after any holiday. Since 2004 the day after has been improving with S&P 500 up 12 of the last 19 with an average gain of 0.08%.
[April Vital Stats Table]