The End Of Monday Blues? New Data Reveals Shift In Stock Market Patterns

Monday blues? No more—at least not for U.S. investors.

Remember, the “Weekend Effect”? Traditionally, the weekend effect has implied that stock returns on Mondays are often notably lower than those of the preceding Friday. Monday’s lows would offer investors ample opportunities to lap up undervalued and bargain stocks.

See More: Best Time of Day to Buy and Trade Stocks

This is changing. The erstwhile Monday effect now appears to be dissipating.

Evidence can be seen in the figures below.

Benzinga’s review of the performance of the three major U.S. market-tracking indices provides a very interesting conclusion. Over the last six months, the stock market experienced gains on 20 out of 24 Mondays.

That’s 83% of Mondays ending in the green. Here’s a chart depicting the findings:

Source: Created by Author

Of the 24 Mondays between May 1, 2023 and Oct. 31, 2023, the S&P 500 Index (SPX) closed positive 20 times, implying an 83.33% probability for the market to close higher on Monday.

Over the same period, the Dow Jones Industrial Average (DJIA) closed positive 66.67% of the time, i.e. on 16 Mondays. The tech-heavy NASDAQ-100 (NDX) closed positive 91.67% times (22 Mondays) over the review period.

The S&P 500 Index

The S&P 500 index tracks the performance of 500 of the largest companies trading on the U.S. stock exchanges. The index is computed in a free-float market capitalization-weighted methodology. Some of the popular exchange-traded funds (ETFs) tracking this index include:

• SPDR S&P 500 ETF Trust SPY
• iShares Core S&P 500 ETF IVV
• Vanguard S&P 500 ETF VOO

The Dow Jones Industrial Average Index

The DJIA is a price-weighted index that tracks 30 large capitalization stocks trading on the U.S. stock market. The SPDR Dow Jones Industrial Average ETF DIA Trust is a popular ETF tracking this index.

The NASDAQ-100 Index

The NDX uses a modified capitalization methodology for stock selection from stocks listed on the NASDAQ exchange. The index tracks 100 of the largest non-financial companies listed on the NASDAQ. Popular ETFs tracking this index include the Invesco QQQ Trust Series I QQQ and the Invesco NASDAQ 100 ETF QQQM.

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