First Trading Day of the Month: Another 1% Gain?
Monday, January 31, 2011 at 03:59PM Tomorrow marks the start of a new month, and the big question for traders is will the recent trend of rallies on the first trading day of the month remain in place? Since the start of 2010, the S&P 500 has finished the first trading day of the month higher in eleven out of thirteen months (85%). Additionally, the S&P 500 has also risen more than one percent eight out of thirteen times (62%).
In fact, the first trading day of the month has had such a large impact on the equity market recently that if it wasn't for that day, instead of being up 15.3% since the start of 2010, the S&P 500 would only be up 1.4%. In the chart below, we show the performance of the S&P 500 since 2010 and break out the returns based on all days except the first trading day of the month and performance using just the first trading day of the month. As shown, nearly all of the S&P 500's gains since the start of 2010 have come on the first trading day.
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