The Little-Known April Bullish Trend
 
March 2009 certainly came in like a Bearish Lion, but exited as somewhat of a Bullish Lamb.  We saw the market plummet reach its zenith on March 9th, followed by a very strong rebound rally in the major indices.  Now that we have entered April, we did some research on this month's historical performance, and the results are surprising and should help calm some fears of another imminent big leg down.

First, if you look at the data from this milennium (since 2000), April is the leading average % return for the S&P 500 Index at +1.46% average gain (see the below table).  This is far stronger than any other month in that time frame -- and the second strongest month is May at  +0.88%.  So the Spring has been an outperforming season in general.  The months that had the highest chance of being positive were August, followed by a May/October/November/December tie, so April has not been the highest in terms of a positive return (it is 55%).  

S&P 500 Index Monthly Performance (since 2000)

(Continued Below)

That is a fairly small sample size, so we looked back all the way to 1950 on the S&P 500 Index data.  Note on the chart below that April is the 3rd strongest month, with an average return of 1.37% and a 67.8% chance of being positive.  November and December, which are commonly discussed as historically "strong" months for the market, are the biggest gainers on average.  Data compiled from Yahoo Finance.

1950 to 2008 Monthly S&P 500 Performance

 
There are many market axioms concerning seasonality and months, such as "Sell in May and go away", "Up January equals Up Year", "Crashes occur in September/October/November", "Summers are slow and bad for technology stocks" etc.  Some of these expressions are proven true while others may be violated in any given year.  The data above indicates that "April Showers brings Bullish Flowers" may become a future cliche, albeit a tongue-in-cheek one.  Of course nothing is guaranteed (for example none of the months are up more than 75% of the time since 1950), but it's always good to have some historical statistical data in your favor when analyzing the market and risk/reward ratios.

Trade Well,
Price Headley
and Joe Sunderman,
BigTrends.com
1-800-244-8736

I like the way u put it...maybe...maybe...just like u say.

up some 25%..it is norm for a sucker rally...changing of rule can never change that trillion losses.

from dow 14000 to 6440 ..back to 8000 is up 25% from 6445...down 54% from 14000 to break even it got to go up 117%!!! if it got to go back to 14000...

invester should take note of this...

But a sucker rally for us to make $ is well receive by all naturally..

BUT IT IS STILL NOT OK...G20 cannot offer solid solution, except tok up the market..

so rally is definitely not sustainable..

Make your $..to cover your losses...to be get carry away will see u in heavy losses later.

How do you know the next boat will be upstream???..but i can sense the next boat truthly upstream will be a long time from now...how long?...long enough for some invester to jump down from SGX building...maybe mid to late 2010..JMO...from what i read and come to my own conclusion...DYODD

Join in..dont delay..tomolo buy..why..tomolo maybe profit taking...just buy second liner..dont miss the opportunity..you will regret..DYODD

lookcc      ( Date: 02-Apr-2009 18:44) Posted: thks, will wait 4 next boat [shud when it come], cheers 2 u!!! cheongwee      ( Date: 02-Apr-2009 18:34) Posted: NO..i dont think so...you still got chance ...just buy those second liner...blues is over stretch currently.. when i post on 19 th of Marech,,.i was buying 2 to3 days before...as i see the dow break out..i was confident that the sucker rally have begun.. so lookcc...still got meat for you...how about Rotary..Stamfordland..jmo..noty vest,, but these are potential..me vest to the nose already. if not i will buy .. Rate This Post:   Good Post   Bad Post   cheongwee Master Posted: 19-Mar-2009 03:35       Contact cheongwee          *  Quote this Post! x 0 x 0 * Alert Admin Ladies and Gentleman, I think the mother of all sucker rally is here finally...make your buck to recover your losses previously...dont be too carry away..OK