HedgeFundLIVE.com — I want to bring attention back to the strength that the month of April historically demonstrates. April tends to be one of the strongest months of the year. Now April is the start of quarterly earnings season and so far earnings seem to have been decent in my opinion. This earnings season was rumoured to potentially be a negative catalyst for the market. It still has the potential to push this market lower, but I am more inclined to believe that any moves down will be small pullbacks in an overall uptrending market.
So far month to date the SPYs are actually down 97bps. On average since 1993, April showed returns of +2.1% (median of +1.4%). In fact, there have only been five times when the market was down in the month of April since 1993, which means that there is a 72% probability of the market closing up on the month. It is worth taking a look at these five instances individually:
2005: -1.87% This weakness came on the heels of a weak month of March in which the SPYs were down 2.2%. Note that last month, the market was down about 42bps. In light of the weakness that was seen in March 2005, I am not giving much credence to this data point from April 2005.
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