Q1 of 2017 marked the 13th quarter during the current bull market where the S&P 500 rallied more than 5%. In a blog post last week, we highlighted the fact that the S&P 500 tended to consistently close out strong quarters on a weak note, which is exactly what we saw in Friday’s trading as equities sold off moderately right ahead of the closing bell. So is there any pattern to the first trading day of a new quarter following a strong quarter?
The table below lists the S&P 500’s daily change on the first trading day following a quarter where the S&P 500 was up more than 5%. Up until the last three strong quarters, the first day following a strong quarter was consistently positive as the S&P 500 was up nine out of ten times. However, with three straight occurrences where the S&P 500 declined, the overall results, while still positive, are not as strong. Overall, the S&P 500 has averaged a gain of 0.10% (median: +0.44%) to open new quarters following a strong quarter with gains two-thirds of the time.