Week Before Labor Day Has Been Bearish For Stocks Lately

bearish signSummer is almost over, kids are going back to school, and we are looking at a pretty solid August so far. What I like about this month is housing and consumer discretionary are finally leading. These groups haven’t done anything all year and to see them finally leading could be a good sign as we inch closer to Labor Day and the month of September.

I was on Fox Business Network on Thursday and mentioned this potentially very positive change. You can watch my spot here, but unfortunately all they show is the final question about Janet Yellen.

August is historically one of the weakest months, right along with September. So the strength so far this year is a nice change. At the same time, it isn’t over yet – as we still have one more week in August. And this year, the last week in August is the week before Labor Day. Now here’s the fun part: historical data on the S&P 500 indicates that the week before Labor Day has been extremely bearish recently.

Here are the returns the week before labor day going back to 2007:

Sign up for our FREE newsletter
and receive our best trading ideas and research

stock market seasonality performance labor day


Down six of the past seven years gets my attention. Not to mention the -1.84% drop last year was the fourth largest weekly decline all of 2013 and it is safe to say we should be on our toes this week purely based on seasonality. Good luck out there this week and enjoy the last week of summer.

No position in any of the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.