Way back in 2009 I showed a study that suggested Labor Day week performance has been somewhat dependent on whether the market has rallied over the 20 trading days leading up to it. I decided to take a new look at that study today. Below are updated results of post-Labor Day action when the previous 20 days have seen gains versus losses.

This shows a poor performance record when there has been a rise in the market. But in 2017 SPX has posted a slight decline over the last 20 days. So we are facing the below scenario.

Just the opposite here. The market appears to lean towards gains during Labor Day week under such circumstances. Of course there are a few caveats to keep in mind. For one, instances are a bit low. Secondly, while we are down over the 20-day period it is not by much, and with SPX up the last 6 days in a row, any “oversold” edge here may not be in place. Still, the results do give us some information to consider as we head back to work on Tuesday.

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