How Has The Stock Market Historically Performed Around Labor Day?
If you are interested in stock market seasonality, you may like to know how stocks have historically performed around the Labor Day holiday.
Since we are technical swing traders who follow a disciplined, rule-based trading strategy, it frankly does not matter to us.
Nevertheless, seasonal stock market trends make for interesting reading and trivia.
CXO Advisory Group analyzed the historical behavior of the benchmark S&P 500 index during the three trading days before and the three trading days after the Labor Day holiday — based on daily closing prices from 1950 to 2016 (67 years).
In general terms, they found the average daily return for all trading days in that period was a gain of 0.03%.
They also found there is an (unconvincing) tendency for the market to show strength on the Friday before Labor Day, but there were no notably abnormal returns for the other five trading days.
No surprise to us, they also found volatility is relatively high on the first trading day after Labor Day.
That makes sense because it is the day that unofficially marks the end of the “summer doldrums,” which typically leads to greater institutional trading volume.
Have a relaxing, fun, and safe Labor Day weekend.