This March started off with solid across the board gains, but that reversal from late-February weakness was fleeting as the market then continued to decline for the next three trading days. As of yesterday’s close, DJIA, S&P 500, NASDAQ, Russell 1000 and 2000 are all positive for March. DJIA is best, up 6.12%. Second best is the Russell 2000, up 5.38%. NASDAQ continues to lag with a gain of just 2.12% so far. In the above chart March 2021 (dotted lines plotted on right vertical axis) is compared to the typical March seasonal pattern over the recent 21-year period, 2000-2020 (solid lines using left vertical axis).
This year’s zigs and zags have differed from the recent 21-year pattern modestly as strength was merely a single day this year compared to past gains typically lasting until around the third trading day. However some similarities are present. Weakness did follow strength and it appears mid-month strength arrived early this year. Historically the market has tended to fizzle after mid-month as monthly options expiration and end-of-Q1 pressures weigh on trading. It would not be surprising to see some weakness later this month especially given the magnitude of current gains compared to full-month historical average performance. Recent new highs by DJIA, S&P 500 and Russell 2000 are encouraging, but NASDAQ is lagging. Without the support of tech, and new NASDAQ highs, the current rally could struggle.