April is the final month of the “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 October 4, 2022, through this week, 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.

[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 1,000 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. 

Recommended Action: Stay the course in April to benefit from seasonal strength.

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