April 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. DJIA has been up 16 Aprils in a row with an average gain of 2.9%.
S&P 500 has been up 15 of the last 16 Aprils with an average gain of 3.1%
April is last month of the Best Six Months November-April
and when we begin tracking our Best Six Months Seasonal
MACD Sell Signal. But before the “Worst Months” arrive, April’s solid
historical track record could keep the current rally intact.
April got off to its usual stellar start the first two
trading days of the month, but some surprisingly
hawkish remarks from the usually dovish Federal Reserve Board Governor Lael
Brainard has stocks on the ropes today.
Barring any major escalation in Ukraine, we suspect the
market to log additional gains in April as the Best Six Months come to a close
and then move sideways during much of Q2 and Q3. Likely testing the lows before
rallying in Q4 and into 2023.
Six Months” switching strategy found in our annual Stock
Trader’s Almanac which is basically the flipside of the old “sell in
May and Go Away” adage. After decades of historical research, we discovered
that most market gains occur during the months November through April.
Investing in the Dow Jones Industrial Average between November 1st and April
30th each year and then switching into fixed income for the other six months
has produced reliable returns with reduced risk since 1950.