Money supply
(M2)
The money supply chart below was provided by Gordon
Harms.
Money supply is growing at the fastest rate in
years.
April
Over all years the OTC has been up 69% of the time in
April. By that measure April is the best month of the
year. The average gain of 1.5% puts it in a 3 way tie for
2nd with November and December and following the average 3.2% gain of
January.
The record has not been as good during the
4th year of the Presidential Cycle. During the
4th year of the Presidential Cycle April has been up 55% of the time
putting it in 8th place out of the 12 months while the average 1.2%
gain puts it in 5th place by that
measure.
The average month has 21 trading
days.
The charts below show the average daily performance for
the index during the month of April over all years in blue (OTC) and red (SPX)
and during the 4th year of the Presidential Cycle in
green.
The charts are calculated by averaging the daily
percentage change for each of the 1st 11 days of the month and each
of the last 10 days. When there are more than 21 trading days
some days in the middle have been left out and when there have been less than 21
trading days some days in the middle have been counted twice.
A dashed vertical line has been drawn after the 1st trading
day and at 5 trading day intervals. A solid vertical line has
been drawn on the 11th trading day, the dividing
point.
Over all years since 1928 the SPX has been up 58% of the
time in April. By that measure it is tied with July as the
6th best month of the year. The average gain of
1.1% puts it in a tie for 3rd with July and following January with an average
gain of 1.4% and December at
1.3%.
Like the OTC, the record has not been as good during the
4th year of the Presidential Cycle. During the
4th year of the Presidential Cycle the SPX has been up 50% of the
time putting it in a tie for last place with July. The
average loss of 1.0% puts it at 11th place above May at
-1.4%. The average loss was helped considerably by an 18.8%
loss in 1932 and a 9.3% loss in
1936.
Conclusion
The rapid decline in new lows suggest that risk is
receding.
I expect the major indices to be higher on Friday April
4 than they were on Friday March
28.
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Last week the blue chip indices were down a little while
the small cap indices were up a little so I am calling last weeks positive
forecast a tie.
Thank you,
Mike Burk
YTD
W5/L4/T4
Disclaimer: Mike Burk is an
employee and principal of Alpha Investment Management (Alpha) a registered
investment advisor. Charts and figures presented herein are believed to be
reliable but we cannot attest to their accuracy. Recent (last
10-15 yrs.) data has been supplied by CSI (csidata.com), FastTrack
(fasttrack.net), Quotes Plus (qp2.com) and the Wall Street Journal
(wsj.com). Historical data is from Barron’s and ISI price
books. The views expressed dare provided for information
purposes only and should not be construed in any way as investment advice.
Furthermore, the opinions expressed may change without
notice.
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