More Volatility Likely Following Last Week's Selloff

Hickey and Walters (Bespoke) submit: Last week marked the first time since April 2005 that the S&P 500 was down more than 1% on three of the five trading days. We went back to 1980 and found other Monday-Friday periods where the index was down -1% on three trading days to see how the market has performed going forward.

While there are no conclusions to be made to the upside or the downside, the absolute percentage changes in the right columns below highlight that we are in store for more volatility.

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Comments

[Bright Inve...:]

Hickey and Waters writes, "While there are no conclusions to be made to the upside or the downside, the absolute percentage changes in the right columns below highlight that we are in store for more volatility." After analyzing this sentence, I have come to the conclusion that Hickey and Walters wrote this article that present no unique or creditable findings. I do feel that the general discussion of fear will have a bad affect on the S&P 500. Leo Surprenant

2007 Jul 29 03:27 PM

[athenian:]

I don't understand the difference between the two sets of figures. What does 'absolute' indicate and why do all the negative figures in the first set turn positive in the second?
Peter Dunkley

2007 Jul 29 03:40 PM

[Bright Inve...:]

Peter, I also do not understand the difference between the two sets of figures. I think Hickey and Walters should have used better judgment when they wrote this article. I respect your analysis.
Leo Surprenant

2007 Jul 29 04:28 PM

[wixeywaxy:]

I'm not sure the work required to gather the information for this table was presented in a very helpful way. I would be interested to see a picture of how the market was performing as it entered the period of consecutive down days and then what would have been the result of an investment made the Friday after three down days 6 months to a year after the consecutive down days. The period shortly after a market trauma is not a good gauge of the wisdom or folly of buying into these events since the sentiment right or wrong is likely to hang on for a period of time. Your data does show that which could be expected. Vic

2007 Jul 29 08:06 PM