Extensive losses ended the second negative day in a row. The NASDAQ’s fall of -2.38 percent ranks as the 301st worst, of the nearly 2,000 declines over the last five price cycles. Yet the S&P500 loss ranks even worse – its -2.30 percent stands as the 142nd deepest.
Considering the magnitude of these losses further, note that the median S&P500 losses for two back-to-back declines over the last three bull markets were -.77 percent, -.63 percent and -.98 percent –significantly smaller than today’s deep -2.30 percent.
Indeed today’s beating is harsher than the median S&P500 losses for the last two bear markets; these were just -1.37 percent and -1.44 percent
While two losses in a row are not frequent, today’s is the third happening since mid-February. Moreover, history shows a further pessimistic outlook for tomorrow. In the past, losses occurred as often as recoveries on the following day.
Today’s diagram illustrates how frequently two losses in a row have occurred over the last five price cycles. It reveals also that these happen more often during bear episodes than when prices are trending up.
DJIA – 1.79 percent
NASDAQ - 2.38 percent
S&P500 - 2.30 percent
