A while ago I saw some traders mention “all of the S&P 500’s gains have come from the overnight session. ”
Is this true?
The following chart demonstrates, from 1962 – present, what happens if you:
- Buy and hold the S&P 500, vs….
- Buy each day on the OPEN and sell each day on the CLOSE, vs…
- Buy each day on the CLOSE and sell the next morning on the OPEN.
*Assuming no slippage or transactions costs.
Click here to download the data in Excel.
As you can see, most of the S&P 500’s gains come from the day time. It’s only in the current economic expansion (2009 – present) in which we see some of the S&P’s gains/losses come from the overnight session.
I don’t think this is bullish nor bearish for the stock market. Just proves that there are more foreign investors/traders in the U.S. stock market than before, thanks to globalization.