Monday Effect

DEFINITION of 'Monday Effect'

A theory that states that returns on the stock market on Mondays will follow the prevailing trend from the previous Friday. Therefore, if the market was up on Friday, it should continue through the weekend and, come Monday, resume its rise.

BREAKING DOWN 'Monday Effect'

Some studies have shown a similar correlation, but no one theory has been able to accurately explain the existence of the Monday effect.

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