What if you could predict the behavior of the stock markets the following Monday of a Friday afternoon? Oddly enough, a certain group of traders have been keeping just such a secret to themselves for many years. There’s a particular point in time that predicts the stock market behavior for an entire day with a tremendous strike rate. It’s the same time everyone changes their clocks.

According to analysts and scientific studies in the field, even a small degree of sleep deprivation can negatively affect judgment and attitude, leading to decreased response rate and poor outlook. When multiplied over enough people and across a broad enough market, one tiny change in sleep patterns can have a startling impact on the stock market.

So when the clocks move forwards and traders all over the country have lost sleep in the spring, the next Monday morning is statistically much more likely to be a bear market, at least for the day. The opposite is true for the fall when the clocks go backward. That extra hour in sleep the next Monday morning provides traders with an increase in perception, better trading skills, and as a result, a significantly more optimistic market.

Simon Thompson points out that this anomaly typically results in a strike rate of about 63 percent over the past several decades, the only exceptions being extreme bullish or extreme bearish markets such as the internet boom of the 90’s not pulling back in the spring or the markets in fall of 2001 not pushing forward on the recent news of the September 11^th attacks having occurred just over a month prior to the effect.

My advice would be best applied to day traders looking to gather a few quick points on any stock. Quite simply, go long when the clocks go back and short when the clocks go forward, assuming any significant historical or economic events are not going to interfere with your trade.