The US is approach tax day, why it matters for the stock market

Here is a good chart from Goldman Sachs illustrating daily seasonals in April. It’s a sizzling month but the days up-to and including the US April 15 tax-filing deadline are sluggish.

“Tax Day is a seasonal weak period, on the day by day chart, but April remains fairly strong seasonal month. Liquidity gets drained and lower demand for YOLO call options,” Goldman writes.

I don’t think people wait right up until tax day to sell equities but writing a check to the government and filing taxes doesn’t put anyone in a good mood.

The takeaway here is that the picture improve considerably on April 16, which is next Tuesday with an average 1% gain in the remainder of the week.

h/t @newsquawk

This article was written by Adam Button at www.forexlive.com.