History shows S&P 500 does well in April after a weak March, BTIG says

Investing.com -- BTIG analysts highlighted a historical trend suggesting a potential rebound for the S&P 500 (SPX) in April following a challenging March.

According to BTIG technical analyst Jonathan Krinsky, the month of March is set to close with over a 6% decline, marking the worst monthly performance since September 2022 and the most difficult March since 2020. Despite the recent downturn, Krinsky noted that April has traditionally been a positive month for the markets when March has seen a decline of more than 3%.

Krinsky pointed out that since World War II, there have only been seven other instances where March experienced a drop exceeding 3%. Following each of those instances, April ended with gains, averaging a 5.92% increase.

Furthermore, the period from April to December concluded with higher market closings in six out of seven occurrences, with 2001 being the exception, posting a slight decline of 1.05%. While Krinsky expressed caution about the medium-term market trend, he indicated that the setup for April seems to favor bullish outcomes.

The analyst also mentioned that the S&P 500 retested its mid-March intraday low of 5504 earlier in the morning before rallying.

Although he anticipates volatility in April, Krinsky believes the odds support some relief for the market. Adding to this perspective, he observed a divergence in the Volatility Index (VIX), which did not reach a new high while the S&P 500 briefly dipped below its March lows. This divergence was also seen in January, prior to a subsequent rally.