Since 1950, April has Been the Best Month for Stocks!

Today's chart presents the Dow's average performance for each calendar month since 1950 (blue columns). As today's chart illustrates, it is not unusual for the stock market to perform well during the early part of the year.

Looking forward, the averages favor a continued stock market rally as the calendar month of April has been the best month for stocks since 1950, averaging nearly +2.0 percent.

After that, however, things tend to get a little dicier.

Of the five calendar months that follow the strongest month of April, four rank as the weakest average calendar month performers since 1950.


Read more here...
http://www.chartoftheday.com/20150401.htm?H

The Average NASDAQ and Russell 2000 Stock is Already In A Bear Market

There are no perfect stock market indexes that'll give you a complete picture of the state of the market.

Most market-watchers prefer the S&P 500 over the Dow Jones Industrial Average. But the fact that the S&P 500 is with striking distance of its all-time high of 1,897 belies the fact that many stocks in the index and in the market as a whole are way down.

"When we examine breadth in terms of new highs, more specifically stocks that are in ‘striking distance’ to a new high, we see a completely different picture," writes J.C. O'Hara, of FBN Securities. "Often at the end of bull markets, large cap stocks continue to rise and the smaller stocks begin to flatter."

The S&P 500 is cap-weighted, which means larger companies like Apple and ExxonMobil have a much larger impact on how the index moves.

"High cap stocks influence the averages more thus can mask internal weakness," continued O'Hara.

O'Hara's research found that the average S&P 1500 stock is down by more than -12% from their recent 52-week highs. The average stocks in the Russell 2000 and Nasdaq Composite are down by more than -20%, which means you can say they are in bear markets.

"Historically, this sort of divergence does not bode well for the longevity of a market’s upward inertia," said O'Hara. "We went back and examined instances where the market made a new high and looked at where the median stock sat compare to its high. Our data suggests that the current breadth reading is very unhealthy. Not only are new highs diminishing but we are seeing many stocks making new lows. This breadth divergence is a major concern."

O'Hara says this isn't necessarily a screaming sell signal.

"However the powerful message of “there is something wrong” should not go unnoticed," he cautions.


Read more: The Average NASDAQ and Russell 2000 Stock is Already In A Bear Market

Dow Industrials Heading for A Test of 2007 High...

Chart of the Day - Adjusted for Inflation, The Dow is Down Over -30% This Decade

Chart Courtesy of www.ChartofTheDay.com

For some long-term perspective, today's chart illustrates the Dow adjusted for inflation since 1925. There are several points of interest...

For one, when adjusted for inflation, the bear market that concluded in the early 1980s was almost as severe as the one that concluded in the early 1930s.

Also, the inflation-adjusted Dow is a little more than double where it was at its 1929 peak and trades +54% above its 1966 peak – not that spectacular of a performance considering the time frames involved.

It is also interesting to note that the Dow is up +57% from its March 9, 2009 low which is actually slightly more than what the inflation-adjusted Dow gained from its 1966 peak to today.