LIVE MARKETS-With April's wild ride, S&P 500 offers potential surprise

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WITH APRIL'S WILD RIDE, S&P 500 OFFERS POTENTIAL SURPRISE

With its scary drops, and sharp swings higher, the S&P 500 index .SPX has been on quite a roller-coaster ride this month. In fact, it now has a chance to do something it's never done before.

At its April 7 intraday trough, the benchmark index was down as much as 13.84% for the month. However, with its subsequent rally, and just two trading days to go in April, it now stands down just 1.48% month-to-date.

Looking back to early 1928, the S&P 500 has never fallen more than 10% during a month, but then finished that month in positive territory.

Using LSEG data, the biggest intramonth drop in history with a positive monthly close, was a 9.72% slide in December 1928, followed by a 0.3% gain at month-end.

With volatility still elevated, the SPX would appear to have a chance to still make up its 1.48% April loss so far. The average daily change this month has been about -3%.

However, there have been more up days than down days (58% vs 42%), and the average positive-day change is +1.85%.

Additionally, with the CBOE volatility index .VIX now just over 25.00, it, theoretically, implies an expected S&P 500 index one-day change of around +/- 1.6%.

In any event, with the big recovery off April's low, bulls are eyeing a potential hammer candle forming on the monthly charts:

The hammer candle, with its small body at the top and long wick below, is a bullish reversal pattern that appears at the end of a decline.

That said, as stands, to add credence to this pattern, bulls will look for May strength above April's 5,695.31 high.

(Terence Gabriel)

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