Ahoy there Trader! ⚓️
It’s Phil…
Markets and MLK Day: A Historical Insight
Martin Luther King Jr. Day is more than a day of remembrance—it’s also a notable calendar point for the stock market. As we prepare for the market closure in honour of Dr King’s contributions, let’s dive into how markets have historically performed around this federal holiday.
Key Market Observations Around MLK Day
- Friday Before MLK Day: Historically, the market shows a slight positive bias, with the Dow Jones Industrial Average (DJIA) often posting gains. However, performance remains mixed overall.
- Tuesday After MLK Day: Markets tend to open weaker, with choppier price action compared to the Friday before.
- Midweek Volatility: Wednesday and Thursday after MLK Day have been notably weak for the DJIA, down 17 times in the last 27 years.
Important Question: Are you ready to trade smarter?
When you’re ready – Dive Deeper Into a Profitable Rules Based Trading System
This Proven 3-Step “10 min/Day” 6-Figure Unconventional Recession Proof SPX Income System Unlocks $500-$5,000+ Days FAST! …
Options Expiration Adds to the Chaos
MLK Day’s placement can either land during options expiration week or just after. Since 1999, both these weeks have been associated with heightened volatility. This combination often exacerbates midweek market movements, creating a perfect storm for choppy trading.
Why This Year Matters
2025 marks the 29th year that US markets will close in honour of Dr King. Although its historical impact is worth noting for traders navigating post-holiday market trends.
How Traders Can Prepare
- Watch the Midweek Dip: Historically, DJIA has struggled midweek after MLK Day. Plan accordingly for potential dips.
- Options Expiration Consideration: If the holiday aligns with expiration week, be mindful of heightened volatility.
- Post-Holiday Patience: Markets often display indecision after the break. Avoid rushing into trades until clearer trends emerge
Fun Fact:
Did you know Martin Luther King Jr. was posthumously awarded the Presidential Medal of Freedom in 1977? President Jimmy Carter honoured Dr King’s legacy, cementing his contributions to civil rights and equality.
Happy trading,
Phil
Less Brain More Gain
…and may your trades be smoother than a cashmere codpiece
Attribution: Stats and charts from Stock Traders Almanac