From the Stock Trader’s Almanac 2016 (page 86), it is known that the first trading days of each month combined gain more points than all other days. However, the first trading day of August does not contribute greatly to this phenomenon ranking fourth from last place among other First Trading Days in the 2016 Almanac and second from last in the soon to be released 50th Anniversary 2017 Edition.
In the past 21 years, Dow Jones Industrial Average has risen just 33.3% (up 7, down 14) of the time on the first trading day of August. Several sizable gains in those up years have mitigated the average first day percent change, but the median performance is a more sizable loss.
Digger deeper and longer into August’s first trading day, history reveals a modestly bullish trend for S&P 500 when the first trading day falls on a Monday. S&P 500 has been up on eight of the last 12 Monday August first trading days, with an average gain of 0.3% since 1988. The long-term track record of Monday August first trading days, back to 1932, is 19 gains in 34 years (56% up).
Neither the short-term nor long-term record makes an overwhelmingly compelling case to be long or short next Monday. However, First Trading Days so far in 2016 have been solid for S&P 500, up 5 straight since back-to-back losses in January and February.
