
What you already knew confirmed
Stock markets have fallen on Fridays more often than any other day of the week since the start of the year. This has been intuitive as no one has wants to hold risk on into the weekend with the latest COVID19 headlines about to break. Last Friday saw a bit of a mixed book as Asian and European stocks were broadly lower, but US stocks saw the S&P500, Nasdaq, and the Dow higher. Here is the breakdown from Bloomberg:
However, one aspect that was less obvious, was that the biggest losses were sustained on a Monday. According to Bloomberg the biggest losses were sustained on Monday. The S&P500 has fallen an average -0.80% when markets re-open, with large moves often coming right from the starting bell. Take a look below.
Now, with headlines calming down around COVID19 this phenomena might start tailing off. However, put it in your pocket book because many pandemics have a number of ‘waves’. For instance, previous pandemics have lasted from 2-5 years (see chart below of the 1918 flue).
So, if/when we start getting new waves. Sell on Friday, hold on Monday, stop and reverse on Tuesday would have worked well since the start of the year.