Can Stocks Buck MLK Week's Bearish History?

The S&P 500 Index (SPX) tends to underperform during MLK week

Jan 15, 2016 at 2:00 PM
facebook X logo linkedin


Next week is a short one for most of us here in the U.S., with Monday set aside to observe Martin Luther King, Jr. Day. Today's massive sell-off suggests that, with oil prices tanking and China entering a bear market, most traders are unwilling to leave any cash on the table ahead of the long weekend -- but what can we expect from stocks after the holiday?

Stock markets have been closing in honor of MLK Day since 1988. Since then, the post-holiday week has tended to underperform other weeks of the year, according to data compiled by Schaeffer's Senior Quantitative Analyst Rocky White.

Per the first table below, the average "anytime" weekly return for the S&P 500 Index (SPX) is a gain of 0.13%, but that drops to a loss of 0.73% during MLK week. Returns are only 38.9% positive, compared to 55.7% during the rest of the year.

However, it's worth noting that three of the past four MLK weeks have been positive, including a 2.04% bounce in 2012 (shown in the second table below). Plus, next week could actually bring traders a bit of a break from volatility. The standard deviation during MLK week is 1.89%, compared to 2.54% during other weeks.

160115 MLK week SPX returns

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI