The Volatility Alarm That Hasn't Sounded in 13 Years

The S&P 500 Index (SPX) is on pace for its worst three-day stretch in more than a decade

Aug 24, 2015 at 10:39 AM
facebook X logo linkedin


The S&P 500 Index (SPX) got hammered last week, along with its fellow market indexes. In fact, the broad-market barometer dropped 2.1% on Thursday, another 3.2% on Friday, and is poised to surrender yet another 3% today -- which would mark the first time in 13 years the SPX has given up 2% or more in three straight sessions.

150824SPX1

Per Schaeffer's Senior Quantitative Analyst Rocky White, this signal could suggest more volatility ahead, if history is any guide. Going back to 1928, this steep a sell-off has happened just 13 times (nine in the Great Depression era), and the SPX has been positive in the subsequent week less than half the time -- compared to 56% of the time under "normal" circumstances. The average one-week loss is 7.3%, compared to a 1.9% anytime loss, while the average one-week gain is 8.7%, compared to 1.7% anytime. 

Going out to six months, the SPX has been positive after a steep sell-off 54% of the time, with an average loss of 26.4%, and an average gain of 24.5%. On the flip side, the SPX anytime six-month returns are positive two-thirds of the time, and volatility has been relatively muted, with an average loss of 10.4% and an average gain of 10.8%.  

150824SPX2

 

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI