Lunch Hour, from James Sogi
Here is a hypothesis. After a hectic morning of trading, traders are tired, have low blood sugar and tend to be pessimistic, or want to unload a position before going to eat lunch, driving the market down. After a nice lunch or an appropriate refreshment, the world looks a lot rosier and leads to buying and an up market. I remember a funny story when I was a young clerk at a law office on Wall Street back in the late 60s going out to lunch with the office. Back then the 2+ martini lunch was normal business. I'm not sure how they did any business after lunch, but everything seemed fine after lunch. By the way, I just had a nice lunch at Pepolino in Tribeca on West Broadway. Highly recommended. Today the lunch market was a bit dreary and slow as usual, but after lunch there was a nice little surge and as the market's blood sugar revived.
To test the hypothesis I looked at the average pre lunch, lunch time period and the post lunch time period for the last 20 years or so.
Pre lunch av. -.04
Post lunch av. .07
Might be fun to see how much more pronounced this might have been in the martini lunch era.