Determining which day of the week is most volatile for the stock market really depends on how you look at the statistics and what time of year you're considering. There's no consensus on which day of the week is most volatile, since volatility can occur based on investor fears, major world events and other financial uncertainties, and even holidays. It's better to seek the advice of a financial adviser rather than trying to figure out when to invest based on day-of-the-week trends.
Monday Can Bring Falls
According to an article in the Huffington Post in 2012, Mondays see the stock market's greatest falls on average, leaving the day in contention for the most volatile of the week. In fact, the phrase "Black Monday" was coined for two of the worst stock market days in history. This trend could be based on a number of reasons, including companies' tendency to post bad news late on Fridays or that companies may shut down on Mondays after spending the weekend attempting last-ditch efforts to stay alive.
Bear and Bull Market Effects
The day of the week that is the most volatile might also depend on whether there is a bear market or a bull market, according to Thomas Bulkowski, an investment trader and investment author. A bull market is one in which the stock market is generally on an upswing. During these times, Bulkowski says that Fridays are the best day for buying because the stock market is most volatile and tends to fall the most then. On Wednesdays and Thursdays, stocks are more likely to rise. However, during a bear market when the stock market is on a general decline, Mondays and Tuesdays are most volatile and stocks tend to fall the most on those days. In contrast, Thursdays are good days to sell because stocks tend to rise on those days.
The Days Before and After Holidays
When looking for general trends regarding when the stock market is most volatile, don't discount holidays. A holiday can change up a general day-of-the-week trend. Many holidays can result in investors being in better moods and people buying more in general, causing an economic upswing and stabilizing or raising stock prices. However, for some reason, President's Day often results in a more volatile market, with losses occurring the day before and the day after the three-day weekend.
The Case for Other Days
It's hard to pinpoint exactly which day of the week is most volatile, and this may be because chance plays a greater role in day-of-the-week stock market changes than the day itself, according to Matt Krantz, a financial markets reporter for USA Today. His research showed that stocks tended to gain more on Wednesdays in 2006, but stocks gained more on Mondays and Fridays between 1990 and 2005. Depending on the dates studied, the day of the week that was most volatile could change. Because chance seemed to play the greatest role, he suggests using other factors for choosing when and how to invest.
- American Century Investments: Some Perspective on Recent Stock Market Volatility
- USA Today: Best Day to Trade Stocks? Pick a Day, Any Day
- Huffington Post: Monday the Only Day When Stock Market More Likely to Fall Than Rise
- The Pattern Site: Bulkowski's Best Buy Days
- Stock Traders' Almanac: Day After Presidents Day, S&P Down 7 of Last 11
- Duncan Smith/Photodisc/Getty Images