April: Not The Cruelest Month For The Stock Market

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April is the final month of the supposed “best six months” for the Dow Jones Industrial Average and the S&P 500. But before the “worst months” arrive, April’s solid historical track record could help reignite the market, writes Jeffrey Hirsch, editor of Stock Trader’s Almanac.

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 Oct. 4, 2022 through this week, the DJIA is up 5.90% and the S&P 500 is up 4.16%. This is below historical average performance, largely due to persistent inflation, a tightening Fed, regional bank uncertainties, and Russia’s ongoing invasion of Ukraine.

[Seasonal April Market Chart]

As you can see in the chart above, which depicts 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, only the occasional and minor blip interfering along the way.

April 1999 was the first month ever to gain 1,000 DJIA points. However, from 2000 to 2005, the 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 month for the DJIA since 1950.

The DJIA’s streak of April gains ended in 2022’s bear market. April is now the second-best month for the S&P 500 and fourth-best for the Nasdaq (since 1971).

Typical pre-election year strength has often bolstered April’s performance since 1950. April is the DJIA’s best month in pre-election years (+3.9%), second-best for the S&P 500 (+3.5%), and third-best for the Nasdaq (+3.6%).

Small-caps measured by the Russell 2000 also often perform well (+2.9%), with gains in eight of eleven pre-election year Aprils since 1979. The S&P 500’s and the Nasdaq’s single losing pre-election year April was in 1987. 

My recommended action would be to stay the course in April to benefit from seasonal strength.

About the Author

Jeffrey Hirsch is editor-in-chief of The Stock Trader's Almanac and Almanac Investor, and the author of The Little Book of Stock Market Cycles (Wiley, 2012), along with Super Boom: Why the Dow Will Hit 38,820 and How You Can Profit from It (Wiley, 2011). A 30-year Wall Street veteran, he took over from founder, Yale Hirsch, in 2001. Mr. Hirsch regularly appears on CNBC, Bloomberg, Fox Business, and many other financial media outlets.

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