First Day of Month Based on Month

Since the late 80s there has been a tendency for the market to rally on the first day of the month.  One theory on why this occurs is that there are often 401k inflows that are put to work on the 1st of the month.   I examined this tendency and broke it down by month on the blog in 2013 and 2009.  I thought it would be interesting to take another look at it today.  Below is an updated version of the study.

SPX 1st day of month broken down by month

July has been the most reliable month in term of closing positive. And when looking at the size of the average gain, it comes in 2nd.  You also note that August is the worst on both counts.

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