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Historical End-of-March Market Weakness Arrives

Fresh from two straight weekly gains, the market is
struggling to find its footing today. As I write, DJIA has spent the balance of
the day in the red while the tech-heavier S&P 500 has oscillated between
gains and losses. This historical end-of-March weakness is something that has
been noted in recent posts “Up
March Triple Witching Week & Week After Bullish
” and “March
Market Rebound Likely To Cool Further
.” 

Over the past 32 years DJIA has declined 21 times and
advanced 11 with an average loss of 0.75% near the end of March. S&P 500
has a similar track record. Excluding advancing years, the average decline is
right around 1.5% for DJIA and S&P 500. End-of-quarter portfolio
restructuring likely plays a role as managers lock in any gains and establish
positions for the next quarter. These declines can begin on either the
fourth-to-last trading day or the third. 

Coming into this stretch with March down month-to-date
has mitigated losses on several occasions, Of the 11 times DJIA was down MTD in
March since 1990 month-end was up 5 times. For the S&P, the 10 down MTDs
were also followed by 5 gains. As of Friday’s close, DJIA was up 2.86% for
March 2022 and S&P was up 3.87% after a brisk rally off earlier month lows.
Market volatility remains elevated and so is the risk of the usual last three
or four days of March weakness.

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