Over the last 21 years, the first three days of May have historically traded higher, and the S&P 500 has been up 18 of the last 26 first trading days of May.
Bouts of weakness often appear around or on the fourth, sixth/seventh, and twelfth trading days of the month while the last four or five trading days have generally enjoyed respectable gains on average, but the last day of May has weakened noticeably with only NASDAQ gaining ground.
Monday before May monthly option expiration (Monday, May 13) is much stronger than monthly expiration day itself (Friday, May 17) albeit weaker for small caps. S&P 500 has registered only ten losses in the last thirty-four years on Monday. Monthly expiration day is a loser nearly across the board except for Russell 2000 with a slight average gain (+0.01%).
Monday before May monthly option expiration (Monday, May 13) is much stronger than monthly expiration day itself (Friday, May 17) albeit weaker for small caps. S&P 500 has registered only ten losses in the last thirty-four years on Monday. Monthly expiration day is a loser nearly across the board except for Russell 2000 with a slight average gain (+0.01%).
The full week (May 13-17) had a bullish bias that is fading in recent years with DJIA down seven of the last eight and S&P 500 down six of the last seven.
The week after options expiration week (May 20-24) now tends to favor tech and small caps. NASDAQ has advanced in 24 of the last 34 weeks while Russell 2000 has risen in 26 of the last 34 with an average weekly gain of 0.88%.
April was the first down month in 6 months. Almanac readers know April is the best Dow month by average percent change and #2 for S&P. It’s ranked fourth for average percent change on NASDAQ and Russell 2000.
In general, April is a notoriously bullish market month overall with a high average percent and plurality of gains across the board. A negative April is cause for concern. When the #1 Dow month is down that could be significant.
Digging into the data in the tables below of all down Aprils since 1950 there is a plethora of red in May and through Q2 and Q3. There are several steep drops scattered throughout these 21 down April years. May, Q2 and Q3 show consistent and average losses.
Q4 however delivered solid gains except for four years: 1973 (Watergate, Vietnam, Oil Embargo), 1987 (Crash), 2000 (Undecided Election) and 2012 (ZIRP, QE3, Operation Twist, Big Q1 & Q3). You can see why we expect the market to struggle for the next several months.
In general, April is a notoriously bullish market month overall with a high average percent and plurality of gains across the board. A negative April is cause for concern. When the #1 Dow month is down that could be significant.
Digging into the data in the tables below of all down Aprils since 1950 there is a plethora of red in May and through Q2 and Q3. There are several steep drops scattered throughout these 21 down April years. May, Q2 and Q3 show consistent and average losses.
Q4 however delivered solid gains except for four years: 1973 (Watergate, Vietnam, Oil Embargo), 1987 (Crash), 2000 (Undecided Election) and 2012 (ZIRP, QE3, Operation Twist, Big Q1 & Q3). You can see why we expect the market to struggle for the next several months.
Quoted from:
Jeffrey A. Hirsch (May 6, 2024) - Typical May Up Early, Weak Middle, Strong Finish.
Jeffrey A. Hirsch (May 7, 2024) - When Bullish April Is Down Stocks Often Struggle Until Q4.
Jeffrey A. Hirsch (May 7, 2024) - When Bullish April Is Down Stocks Often Struggle Until Q4.
In Bull Markets, New Moons are Bottoms, and Full Moons are Tops.
In Bear Markets, New Moons are Tops, and Full Moons are Bottoms.