The Strongest Hour In The Stock Market

This is the strongest hour and day in the S&P 500

So last week I sent a breakdown of the opening range breakout strategy, and I shared some settings I thought were worth exploring.

This time I’ve been playing around with the strongest/weakest hour themes.

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IE: Trying to see patterns in a particular hour each day.

My thought process is:

If I see that one particular hour is statistically stronger than the rest, I might consider a larger size trade if I see one of my strategies trigger during that hour.

You get the idea. Stacking layers of edge…

During my digging, I also looked into day-of-the-week themes.

Is one day historically stronger or weaker than the others?

It’s a work in progress but I think you’ll find this interesting…

(BTW this is for the S&P 500, you can do this type of thing on any market you trade)

I’ll cut to the good bits.

7 pm – 8 pm were historically one of the strongest hours on SPY

So, I tested buying 500 shares at 7 pm, closing at 8 pm on each day.

I took it back to 1st Jan 2021 to capture a bunch of different market conditions. Not just the bull run.

These were the results…

Not bad, but a brutal drawdown during the downtrend.

But if you only took that trade on a Friday…

The strategy held its own when the market was getting pummelled, then was ready to rip when conditions were good.

So what?

This is probably not a trading strategy in itself, but I wanted to highlight the value of knowing your market themes.

  • Does the market you trade have a ‘strong’ hour, or ‘strong day’?
  • Would you trade that long setup of yours in your market’s weakest hour?

Maybe not…

All this digging helps you get a really good feel for the market you trade.

Perhaps there’s not a standalone strategy from any of this, but it might act as a decent trade filter to reduce the losers.

Do you like this kind of stuff? You might also like this email from months ago.