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April Almanac: DJIA’s Best Month

April marks the end of our “Best Six Months” for DJIA and the S&P 500, notes Jeff Hirsch, editor of the Stock Trader’s Almanac,

On April 1st, we will begin looking for our seasonal MACD sell signal and corresponding early signs of seasonal weakness. Even in historically strong pre-election years the “Worst Six Months” have been lackluster on average, observes Hirsch. Here is the historical seasonality patterns for the month of April, which is covered in the newsletter, Almanac Investor.

April 1999 was the first month to gain 1000 DJIA points. However, from 2000 to 2005, “Tax” month was hit, declining in four of six years. Since 2006, April has been up thirteen years in a row with an average gain of 2.3% 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).

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 numerous bullish days present on either side of the day. Traders and investors are clearly focused on first quarter earnings and guidance 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. Typical pre-election year strength does bolster April’s performance since 1950. April is DJIA’s best month in pre-election years (+4.0%), second best for S&P 500 (+3.5%) and third best for NASDAQ (+3.5%). Small caps measured by the Russell 2000 also perform well with gains (+2.8%) in seven of ten pre-election year April’s since 1979.

Editor’s Note: Subscribers to Almanac Investor get a full run down of seasonal tendencies that occur throughout each month of the year in an easy-to-read calendar graphic with important economic release dates highlighted, Daily Market Probability Index bullish and bearish days, market trends around options expiration and holidays. In addition, the Monthly Vital Statistics Table combines stats for the Dow, S&P 500, Nasdaq, Russell 1000 and Russell 2000 and puts them all in a single location available at the click of a mouse.

Stock Trader's Almanac 2019 – For over five decades, top traders, investors and money managers have relied upon the Stock Trader’s Almanac to give them an advantage in the market. The 2019, 52nd Annual Edition shows you the cycles, trends and patterns you need to know in order to trade and/or invest with reduced risk and for maximum profit. Receive the 2019 Stock Trader’s Almanac absolutely FREE when you subscribe to the digital service, Almanac Investor. To get your FREE copy Click Here

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