Going back 20 years, April has been positive for the S&P 500 75 percent of the time, with an average gain of 2.16 percent, according to Bespoke. It's also hands down the best-performing month of the year for the Dow, going back 50 years.
April has a particular challenge this year. Earnings season is a bigger negative than usual hanging over the market, since analysts expect the first decline in profits in six years. The rising dollar and falling oil prices are blamed for biting into profits of multinationals and energy companies.
Earnings season begins next week with Alcoa and gets into full swing the following week—the week containing April 15—with reports from major banks and tech names.
Julian Emanuel, equity and derivatives strategist at UBS, expects a potential turn higher for stocks later in April, based on what he says are overly negative views of first-quarter corporate earnings
"Our thesis is this is a 'two steps forward, one step backward' type of market environment. You really need to see the earnings come in better than feared, and we think that happens by the end of April," he said. Net income is expected to decline 2.7 percent for S&P 500 companies, according to Thomson Reuters.
Emanuel said the two biggest factors affecting earnings—oil and currencies—were also problems for profits in the fourth quarter as well, and the reported impact was not that large.
As for the market's seasonal performance in April, the theory is simple. Investors appear to be more interested in selling positions to meet tax bills in early April, making for a choppy market until federal Tax Day on April 15.
But if April does outperform, next up is May. The adage goes: "Sell in May and go away." According to Bespoke, the Dow in the past 20 years was up half the time in May, with a low average return of 0.17 percent.