April Almanac & Vital Stats: DJIA’s #1 Month
By: Jeffrey A. Hirsch & Christopher Mistal
March 21, 2024
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 1, the first trading day of the month. From our Seasonal MACD Buy Signal on October 9, 2023, through yesterday’s close (March 20, 2024), DJIA is up 17.58% and S&P 500 is up 20.50%. Fueled by interest rate cut expectations and AI speculation, these gains are approximately double the historical average already and could continue to increase before the “Best Months” come to an end.
[Seasonal April Market Chart]
As you can see in the above chart of the recent 21-year market performance in April and 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. NASDAQ and Russell 2000 election year performance is hindered by losses in 2000. 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. In April 2023, DJIA gained 2.48%. 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 29 years, advancing 21 times with an average gain of 0.31% in all 29 years for DJIA. However, five of the eight declines have occurred in the last eleven 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, 21 advances in 29 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 last trading day of April has exhibited a bearish bias over the last 25 years. DJIA has declined 18 times with an average loss of 0.34% in all years. S&P 500 has declined 17 times, average loss 0.38%. NASDAQ and Russell 2000 have been nearly as weak on the last trading day, both down 15 of the last 25.
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 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.
Historically bullish election-year influences (the second-best year of the four-year presidential election cycle) are muted in April. Average gains since 1952 for DJIA and S&P 500 slip modestly lower but remain reasonably solid. Russell 1000 has been best in election years, up eight times out of eleven with an average gain of 2.0%.
[Election Year 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 1.19% for the week with just eight declines in 34 years. The first trading day of expiration week has a slightly better record (based upon average gain) than expiration day while the week is generally marked by respectable gains across the board. However, DJIA, S&P 500, NASDAQ, and Russell 1000 have all declined the last two years during the week of April’s monthly option expiration. The week after has a softer long-term record, but still leans bullish.
[April Vital Stats Table]