Bespoke Investment Group has examined trading patterns in the S&P 500 index since June 1, the market’s summer low, and broken down them hour by hour. The question is, does the early bird get the worm when it comes to trading the S&P 500?
The answer is yes. On average the index has seen the biggest gains in the first 30 minutes of trading, or an average gain of 0.1% since June 1 in early trading. The second best intraday gain, an average of 0.08%, came in the final hour of each day’s session.
Bespoke found that, on days when the index has closed higher, it averaged a gain of 0.5% in the first 30 minutes and a gain of less than 0.2% in the last hour of the session.
However, on days when the S&P 500 ended down, the average decline was about 0.3% in the early trading, while trading was flat in the final hour.
The weakest times for trading were mid morning and mid afternoon. On average, since June 1 the S&P 500 index has declined 0.03% between 10 a.m. and 11 a.m. and between 2 p.m. and 3 p.m., the results showed.
So one could say that Bespoke’s results suggest to traders: don’t be late, don’t quit early and go ahead a take those coffee breaks.
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