The S&P500 has a very strong seasonal pattern from now until the end of April. One of the sayings in Wall Street is ‘Sell in May, and go away’. It seems that one of the last big pushes in the US index comes as we approach May.

The shares are entering a strong time of the year. From April 14 through to May 1 the shares have gained 18 times in the last 25 years. The average return has been +1.87% over the last 25 years with a 49.93% annualised growth rate. We have removed the outlier year of 2022 as markets started pricing in aggressive Federal Reserve rate moves.

Will S&P500 shares launch higher next week in line with the seasonal pattern or is the environment wrong for more gains?

Trade Risks: The main risk to this trade is some negative news for US stocks which sends them lower.

HYCM clients can access the Seasonax product in order to analyse over 25,000 currency pairs, indices, commodities, as well as individual stocks. Please contact your account manager for a free trial. Certain products & services mentioned herein may or may not be available to all clients depending on which HYCM Capital Markets Group entity their trading account(s) adheres to.