February 10, 2009
The S&P500 dropped -4.91 percent today, experiencing the 25th steepest one-day loss in our database that begins in 1950. The DJIA decline of -4.62 decline is also its 25th worse close. While the NASDAQ fall of -4.20 percent was only its 62nd in that record that goes back to 1975.
Lining up the losses in this order with the worst daily performance at the top- reveals that there are only three dating back earlier than 1987! While there are an additional three in 1987, the other19 of the 25 deepest declines occur between 1997 and today. One important conclusion from this comparison is that both the DJIA and the S&P500 are experiencing sharper reversals in the past ten years than in the previous 50.
One further note on todays market performance is that only 17 other dates exist on which these three averages together lost as much percentage wise, with only four between 1975 and 1999.
Plotting DJIA closes between 1987 and today, as shown below, reveals perhaps a glimmer of hope for the future. Since the vertical lines indicating these 17 reversals tend to coincide with falling prices, nevertheless, most occur just about when the slump is at the bottom.But note the concentration in the current decline, without any relief so far.
DJIA -4.62 percent
NASDAQ -4.20 percent
S&P500 -4.91 percent