Monday Effect

Ugh, Mondays, right? The weekend is over, the fun times are gone, and now it’s up and at ‘em early and back to the grind.

We humans aren’t the only ones who tend to start the week off bleary-eyed and confused. The stock market does too, which is why we have something called the “Monday effect.”

The Monday effect has two, well, effects: first, whatever trend was happening when the markets closed on Friday afternoon is probably going to continue happening on Monday morning. That’s effect #1. So if a stock was trending downward, it will likely continue to trend downward, at least for a little while. In addition, that first hour or so of trading on Monday morning is going to be a little rough and rocky, as all those securities try to find their rhythm. Kind of like us when we first boot up that computer or arrive at the office or classroom after two blissful days away.

Sounds like everyone (and maybe everything) gets a case of the Mondays sometimes.