Just How Bad Have the Last 3 Days Been?

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 |  Includes: DIA, IWM, QQQ, SPY, TWM
by: Steven D. Friedman

Just how bad has it been? The following graph shows the trailing 3 days performance of the Russell 2000 since 1987 (down 15.8% over the last 3 days). As you can see, we've only fallen this far this fast three other times (twice in late 2008 and once in 1987).

click to enlarge

Click to enlarge

In October 2008, we fell 16% in three days. That was followed by a 14% rally over the following two days. In November 2008, we fell 14.6% in three days. That was followed by a 22% rally over the following five days (all up). In October 1987, we fell 17% in three days. That was followed by a 9% fall before rallying 7% and then falling another 20% over five days.

Disclosure: I am long TWM.

Additional disclosure: Disclosure: I manage funds that own many small cap stocks included in Russell 2000. I also manage positions holding TWM (inverse Russell 2000 ETF).