Since 1998, the market has been closed on Martin Luther King Jr. Day (this coming Monday). Can we predict where the market will go in the coming week? In this article, I examine whether the S&P 500 has a higher or lower trend during the shortened trading week. I also break down the week by trading day, and finally, I look for stocks that tend to outperform or underperform the next week for whatever reason.

The chart below compares the S&P 500's performance during the Martin Luther King Jr. Day week to other weeks. Holiday weeks are historically bad weeks for stocks, with the index down an average of 0.57% and only 41% of weeks being positive. In other weeks, the S&P gained an average of 0.17%, with 57% of those weeks gaining. Even if holiday week returns are positive, their upside tends to be limited since the average positive return is much lower than the typical average positive return.

The next table breaks down MLK by day. The week tends to get off to a rough start, with an average Tuesday loss of 0.26% and less than half of returns positive. In fact, in seven of the past eight years, the S&P 500 has declined the day after Martin Luther King Jr. Day. During the holiday week, Wednesday tends to be the best day for the market, while Friday tends to be the worst.

The first table below shows stocks that performed well against the overall stock market trend during the MLK week. The table is sorted by positivity percentage and then by average return. No stock has performed positively in each of the past two years. However, there are two stocks that have beaten the S&P 500 every year for the past 10 years - Workday (WDAY) and Intuit (INTU). Technology and software stocks were prevalent among the S&P 500's best stocks during Martin Luther King Week.

The chart below shows the worst-performing stocks during the Martin Luther King Jr. Day week. Again, it shows the stocks with the lowest positive returns and then sorts them by average return. Financials and coal, oil and gas stocks are overrepresented on this list.

I'd add JPMorgan Chase (JPM) and Eastman Chemical (EMN) to the list of worst performers. They didn't make the list because they tested positive 30% of the time during MLK Week over the past 10 years. In order to make the chart above, it needs to be 20% or worse. However, these two stocks are the only ones to have been beaten by the S&P 500 every year over the past 10 years.