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 the close on March 27, DJIA was up 6.98% and S&P 500 is up 4.92%. This is below historical average performance largely due 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.
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).
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.