Market Movements on Friday and Monday

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DallasCowboysFan

I heard or read a month ago that the stock market generally falls on a Friday because people are closing out positions and it rises on Mondays.

I have never seen any statistics for this.

Is there any validity to this or is it just another cliche' that you hear about trading?


Thanks!
 
Just another stupid cliche, like the "sell in may and go away" chestnut.

It's like the idiots who say you should only buy stuff on Tuesdays on the second week of the month at 11am, right after your neighbour farted .... it's all a bunch of old-wives tales.

Real investors don't sell on fridays and buy-back on mondays
Real investors don't sell in may and go away

Real investors stay in for the ride and stay away from the short-term noise.

And as for professional investors (pension funds and such like) don't make me laugh ! You can't honestly believe they sell on fridays or in may.

I've got lots of shares in my porfolios I bought in January and haven't sold since.
I've got lots of shares in my portfolios that I bought 3 years ago and haven't sold since.
I've even got a few shares knocking around that I bought a double-digit number of years ago and haven't sold since.
I suspect I'm not the only one, there are probably millions (or billions ?) of others just like me out there in the world.....
 
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I have never observed the trend but I heard it recently and I thought someone might know more than me. I thought I may have overlooked something.

But I guess we give too much credit to journalists who have a deadline to meet and need to write a few extra words to fill up their column or need to fill some quiet time on a live broadcast.

Thanks for your insight.

BTW, I have never done this, but I need to start making a list of market cliche's.....


Sell in May and go away.

The relationship of a woman's skirt length to a rise in the stock market.

If the market rises or falls based on who wins the Presidential election or the Superbowl.


A collection of all the scientific observations....:)
 
lindq said:
There is truth to Friday being problematic for many systems. I generally avoid trading on Friday, and it is over time the weakest day of the week for the S&P.
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Thanks

I wonder if next Thursday and Friday will be down days as investors pull their money out of the market in anticipation of a volatile Tuesday and Wednesday from the election.
 
DallasCowboysFan said:
ThanksI wonder if next Thursday and Friday will be down days as investors pull their money out of the market in anticipation of a volatile Tuesday and Wednesday from the election.
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Oh purleeeze !

Please don't confuse investors and day-traders.

Investors work on the basis of "has the story of this investment changed ?". Investors take a medium to long term view and don't care about short term noise.

Volatility happens ... just like the small print on your broker's adverts "shares may go up and down" ... as I said, investors are on the ride for the long term.

True investors are the sort of people who stayed invested in 2008 in stuff that had a future beyond 2008.

Day-traders are the sort of people who panicked like headless chickens (or had margin calls force them to).

You know the biggest reason successful investors are successful ?

Psychology. Having confidence in their research and the mental conviction ignore short-term volatility.

I'm not saying they're right 100% of the time. But they don't start liquidating their entire portfolio just because the President farted.

Unfortunatley there are also a many less strong people who do ... and that's the short-term volatility you see (combined with the leveraged day-traders trying it on for a bit of short term nickle and diming)

I'm sure you've heard the term "smart-money", that's what you need to figure out. The dumb-money is what causes the short-term volatility.

Good luck navigating the markets !
 
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I know over the last year or so Fridays have been more volatile, in contrast to how well Friday's performed in the past it is on the minds of many traders. I think it is we have always been used to them being a good performer with lower volatility. From a historical perspective Monday is by far the worst day and Friday is the second best performer. This is what I expected to see.


SP500_Day-of_Week.PNG
 
comagnum said:
I know over the last year or so Fridays have been more volatile, in contrast to how well Friday's performed in the past it is on the minds of many traders. I think it is we have always been used to them being a good performer with lower volatility. From a historical perspective Monday is by far the worst day and Friday is the second best performer. This is what I expected to see.


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Thanks , that was good information.
 
DallasCowboysFan said:
I heard or read a month ago that the stock market generally falls on a Friday because people are closing out positions and it rises on Mondays.

I have never seen any statistics for this.

Is there any validity to this or is it just another cliche' that you hear about trading?


Thanks!
More...

A lazy question in a line of work that demands very hard work.

Why dont you do some basic statistics yourself so you can find useful info on your own ?
 
Generally, there are more positive Fridays than negative Fridays for the last 5 years or so, but not by a wide margin (57%/43%).

Mondays are more evenly distributed between positive and negative.

Average return on both days are roughly zero.
 
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