March Madness: In Like a Bull, Out Like a Lamb?

Includes: IVV, SPY
by: TickerSense

While we have all heard the phrase how March 'comes in like a lamb and out like a lion,' we wondered if the phrase had any application to the stock market. Namely, if March comes in like a bear, does it go out like a bull, or vice versa? In terms of the current market, since the S&P 500 was down in the first half of March (came in like a bear), will it go up in the second half (out like a bull)?

In the chart below, we plotted the performance of the S&P 500 in the first half of March (3/1-3/16) versus its performance in the second half (3/16 – 3/31). If the above saying had any relevance we would expect to see most of the dots in the upper left and lower right quadrants. As results show, there is some relevance to the saying in terms of the market’s performance. However, we would caution that in the 67 years we looked at, the direction of returns in the first half of March differed from the returns of the second half in 57% of the periods we looked at. So while the results do support gains in the second half of the month, the argument is not overly compelling.

click to enlarge
march bull bear