April Slightly Bullish?

31Mar11

The end of March is nigh. This is a quick look at how the U.S. market has performed historically in April.

First the numbers…

From this 30,000 foot view, by all of these simple metrics April has been stronger than the average month.

But averages can be misleading because they say nothing about how consistent an observation has been or whether it’s waxing or waning, so below I’ve assumed a trader was only long the S&P 500 in April (red) versus the average month (grey) each year since 1930.


[logarithmically-scaled, growth of $10,000]

The graph shows what looks like fairly consistent outperformance.

How consistent?

The graph below shows the rolling 10-year excess return of April versus the average month. Positive numbers indicate that April outperformed over that decade.

With the exception of two periods in the 1940’s and 90’s April has outperformed, especially over the most recent 10-years.

Having said that, statistically-speaking I don’t think there is a strong case for April being uber bullish. Like all seasonality plays, this one has by no means been a sure thing and doesn’t by itself justify a trade, but I’m calling the calendar month bias for April as only SLIGHTLY BULLISH.

See the monthly seasonality map for daily seasonality predictions in April.

Happy Trading,
ms

Geek note: returns are dividend-adjusted (interpolated from quarterly data).

. . . . .

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2 Responses to “April Slightly Bullish?”


  1. 1 Friday look-in: Buffett blowback Abnormal Returns
  2. 2 QE3 whether you like it or not - Steve Cook on Disciplined Investing - InvestorsInsight.com | Financial Intelligence, Advice & Research / Investment Strategies & Planning for Individual Investors.

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