While many traders turn their attention from bulls and bears to turkeys this week, U.S. markets keep right on ticking. The NASDAQ and the NYSE close down completely on Thanksgiving and only operate until 1:00 p.m. Friday. However, traders that take the day off have historically missed some solid trading opportunities.
With 1.5 days less than the typical trading week, it’s no surprise that Thanksgiving week normally sees lighter trading volume than the average week. However, Thursday and Friday are not the only reasons why volume is light. Many traders take the whole week off for travel or vacation. In fact, market volume from Monday–Wednesday of Thanksgiving week is also about 7.0 percent lighter than volume for a typical Monday through Wednesday.
Thanksgiving Week Returns
Despite the light volume, U.S. markets tend to move on Thanksgiving week. Over the last 15 years, the S&P 500 has averaged a 0.92 percent gain throughout the holiday-shortened week. While it’s unclear whether the gains have been driven by a positive Thanksgiving spirit on Wall Street, buyers are typically rewarded with Thanksgiving gains. In fact, two-thirds of the past 15 Thanksgiving weeks have produced positive returns for the S&P 500.
This year’s Thanksgiving week is off to a lackluster start, with the market falling 0.12 percent on Monday and off 0.13 percent in early Tuesday trading. So far this year, the SPDR S&P 500 ETF Trust (NYSE: SPY) is up an underwhelming 1.5 percent.
Disclosure: The author holds no position in the stocks mentioned.
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