Prices dropped more than one percent, more than wiping out yesterday’s uptick, leaving the S&P500 down -3.83 percent since five days ago. Yet when putting this wipeout in perspective, we recognize that it’s not the worst -indeed, far from the deepest- loss suffered by the S&P500 over five consecutive days.
Today’s diagram shows the S&P500 closing prices arrayed against the five-day percent change for every day in the current upturn. We see at least three several day sequences of losses worse than -3.83 percent –and important for judging today’s market future- prices resuming their upward path after these slight pauses.
Further, the record reveals the worst five-day loss at -6.7 percent earlier in the bull market. We find an even deeper drop, some 12 percent, in the 1996/2000 expansion, though the 2003/2007 expansion’s worst comes to just -3.5 percent.
Yet that sequence comes close to our current -3.83 percent five-day decline.
However, this history does need tempering: let’s not forget that at 1,230 days this current bull market is the oldest in recent times; that the last expansion lasted 1,154 days while the one before ended after 1,059 trading days.
DJIA -1.19 percent
NASDAQ -1.14 percent
S&P500 -1.02 percent
