Great little piece of data unearthed today from the folks at Bespoke Investment Group. Their work shows that recently, when stocks open down big in the first hour of trading, they tend to stay down for the rest of the day.
"Since the bull market began back on March 9th, there have been 19 prior days where the S&P 500 was down more than 1% after just an hour of trading," wrote Bespoke, in a note to clients this morning. "The average return from 10:30 to the close on the prior 19 down morning has been –0.13 percent, and the median return has been even worse at –0.42 percent."
Today's turnaround not withstanding, Bespoke advises that if the market opens lower, it's best to sell rather than buy the morning dips.
As for the fundamental reason behind this statistic, I can only guess that lately the market's biggest fundamental driver has been economic data on jobs and housing, most of which comes out either at 8:30 a.m. ET or 10 a.m. ET.
So if this Friday's big jobs report comes out negative, sell everything and go hit the links.
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