The month of April is statistically the best month for the Dow Industrials with average gain of 1.8% since 1950, according to Stock Trader’s Almanac. STA points out that April is rarely a dangerous month “except in big bear markets (like 2002).” It’s worth pointing out, however, that even in the devastating bear market year of 2008 the month of April saw a gain for the Dow. The so-called “Best Six Months” of the year end with April (i.e. “Sell in May and go away”).
There are a couple of minor cracks in the edifice still in need of repairing, but I’m encouraged by the market’s overall technical. One of those “cracks” is of course the NASDAQ 100 (NDX), which is still below its previous high from early March and which took the brunt of the March correction. NDX did manage to find support above its technically significant 90-day moving average, however, which is a positive sign.
[Excerpted from the Apr. 2 issue of MomentumStrategies Report]