I’ll be honest with you.
After the quarter we just had, I wouldn’t blame you for wanting to walk away from your brokerage account, shove it in a drawer and not look at it again until the Fourth of July.
The S&P 500 Index recently posted its worst first quarter in years. The Nasdaq got absolutely hammered.
Tariff headlines, geopolitical chaos, a new war in the Middle East — the reasons to stay on the sidelines feel almost endless right now.
But here’s what I know from watching markets for a long time: the moment everyone agrees that stocks are uninvestable is usually right around the moment you should be leaning in, not backing away.
And as it turns out, the calendar itself is making a pretty compelling argument for doing exactly that.
Stock Tide Turns in April
According to Bespoke Investment Group, since 1990, April has been one of the best months of the year for U.S. equities… full stop.
The S&P 500 has averaged a 1.50% gain in April. The Dow has done even better, up an average of 1.83%. Even the beaten-down Nasdaq 100 has averaged a 1.35% gain.
More importantly, those aren’t just flukes driven by a handful of massive outlier years. The S&P 500 has closed April in positive territory 72% of the time, going back to 1990 — among the highest win rates of any month on the calendar.
If I told you I had a strategy that worked nearly three out of every four times over a 35-year period, you’d want to know more about it.
Well, the strategy is simple: own stocks in April.
This Year’s Setup Is Harder to Ignore Than Most
The Nasdaq 100 just wrapped up the first quarter with a loss of more than 8%, and March alone saw another 7%-plus drop.
That’s a rough combination. But it’s happened before — and what happened next is hard to ignore.
In the first quarter of 2001, the Nasdaq fell more than 32% and nearly 18% in March alone. And in April that year, it was up almost 18%.
In first-quarter 2020, at the absolute height of the pandemic, the index dropped more than 10% for the quarter and nearly 8% in March.
April’s response: up more than 15%, and the rest of that year delivered another 65%.
Last year, the Nasdaq fell more than 8% in the first quarter and almost 8% in March. April bounced back with a gain of 1.52%, and the rest of the year tacked on another 31%.
Every single time this specific combination of a punishing first quarter and a brutal March has appeared in the historical record, April has responded with a gain.
We now have a fourth data point sitting right there with question marks next to it.
I’m not in the business of guaranteeing anything — nobody is — but when a pattern has played out the same way every time it’s appeared across three and a half decades of market data, it deserves your attention.
The Smart Money Is Already Telling You Something
Here’s the piece of evidence that really caught my attention, and it deserves more discussion than it’s gotten.
Over the last six months, there has been a dramatic divergence between two ways of “owning” the S&P 500.
If you had bought SPY at the close every day and sold it at the next morning’s open, you would be up about 2.3% over that stretch. If you had done the opposite — bought at the open and sold at the close — you would be down 6.6%.
Let that sink in for a second. Every single point of damage in the S&P 500 over the past six months has happened during regular trading hours.
Overnight, as institutional players position ahead of the next session, stocks have consistently been bid higher.
That’s not noise. It’s a signal.
It tells you that the selling you’re monitoring throughout the day is largely retail-driven panic and headline-fueled overreaction.
The buying happening quietly in the overnight session is where the serious, long-term money is going.
Institutions don’t accumulate positions like that when they think the bottom is falling out. They do it when they think the market is cheap — and April is coming.
Nobody rings a bell at the bottom. But sometimes, if you’re paying attention to the right data, you can hear it in the distance.
Thirty-five years of April seasonality point to higher levels… a Nasdaq that has rebounded hard from this exact kind of first-quarter beating every time we’ve seen it… and institutional money quietly accumulating overnight while retail traders panic-sell during the day.
You don’t need all three of those things to line up very often. Right now, they are. April is knocking. I’d suggest you answer the door.
Until next time…
Safe trading,
Matt Clark, CMSA®
Chief Research Analyst, Money & Markets
P.S. The headlines may feel chaotic, but the data is far more consistent. And right now, the data is pointing in one direction…
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