Do Mondays Suck for Traders?
Mondays often feel like a drag. After a relaxing weekend, traders might dread the market open, blaming bad trades on the “Monday blues.”
But is this just a feeling, or do the markets actually underperform on Mondays? To find out, we backtested four major assets: SPY (the ETF tracking the S&P 500), TLT (tracking long-term Treasury bonds), Bitcoin, and gold (GLD). The results might change how you approach the first trading day of the week.
The Data: How Do Markets Perform on Mondays?
We analyzed the average daily returns for each asset on Mondays (from Friday’s close). Here’s what the data shows:
- SPY (S&P 500 ETF): +0.04%
- TLT (Long-Term Treasury Bond ETF): -0.03%
- Bitcoin: +0.2%
- Gold: -0.01%
These figures represent average Monday returns, but what do they mean for traders? Let’s break it down.
SPY: A Neutral Start to the Week
SPY, which mirrors the S&P 500, posts a modest average Monday return of 0.04%. This slight positive performance suggests that equities don’t exactly tank at the start of the week.
However, the gain is so small that it’s essentially flat, indicating neither a bullish surge nor a bearish collapse. For stock market traders, Mondays seem to be business as usual—nothing to fear, but no major edge either.
TLT: Bonds Feel the Monday Blues
TLT, tracking long-term Treasury bonds, averages a -0.03% return on Mondays. This small loss hints at a potential Monday weakness in the bond market. One possible explanation is post-weekend portfolio rebalancing, where investors sell bonds to adjust risk exposure.
While the decline is minor, bond traders might want to approach Mondays with caution or look for opportunities in short-term dips.
Bitcoin: A Monday Bright Spot
Bitcoin stands out with an average Monday return of 0.2%, the highest among the assets tested. This positive performance could reflect crypto’s 24/7 trading nature, allowing traders to react to weekend news before traditional markets open.
It might also signal a risk-on mentality at the start of the week, with investors diving into volatile assets like Bitcoin. Crypto traders may find Mondays a good time to capitalize on this trend, though volatility remains a key factor.
Gold: A Slight Monday Dip
Gold, often seen as a safe-haven asset, averages a -0.01% return on Mondays. This negligible loss suggests gold holds steady but doesn’t shine at the week’s start. Traders might see this as a sign of profit-taking or reduced demand for safe havens after weekend market assessments.
For gold investors, Mondays don’t seem to offer a clear advantage or major risk.
Why Do Mondays Behave This Way?
SEO Subheading: The Psychology and Mechanics Behind Monday Trading
Several factors could explain these patterns:
- Market Psychology: Traders reassess positions after the weekend, leading to selling in bonds or gold and buying in equities or crypto.
- News Flow: Major economic or geopolitical news often breaks over the weekend, influencing Monday’s market open.
- Liquidity and Volatility: Bitcoin’s continuous trading may give it an edge, while traditional markets adjust to new information at the open.
Conclusion: Should You Dread Mondays?
The data debunks the myth that Mondays universally suck for traders. Bitcoin shows strength, SPY is neutral, and TLT and gold see slight declines.
Rather than letting the Monday vibe dictate your strategy, focus on the numbers and market context. For example, crypto traders might lean into Bitcoin’s Monday momentum, while bond traders could watch for early-week bargains in TLT.