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10% Reversals in the S&P 500 Over The Past Decade

In the table below we show the S&P 500 Stock Index when it reversed down -10% or more over the past 10 years. Declines of -10% or more are not very common: they primarily happen during Cyclical Bear Markets. Out of 11 such declines, ALL OF THEM occured within a Cyclical Bear Market or marked the beginning of one. Over the past decade, when the stock index does decline -10%, on average it declined -22.3%. (Note: A -20% decline is commonly called a "bear market"). As a side note in regard to the average: 11 events isn’t enough to be statistically significant, so we look back 82 years. Since 5/14/1928 there were 92 declines of more than -10%. On average, they lasted 102 days and the average decline was -19.65%. That isn’t a lot different than the last decades mean of  -22.3% over an average of 100 days. You can probably see how we use studies like these to quantify, define, and understand, what is normal, or not.

10 percent or more DECLINES the past decade

10% Gains also occured 11 times over the past decade. IN ALL INSTANCES, the 10% or more upward drifts occured within a bear market or it marked the end of a Cyclical Bear Market and the beginning of a new Cyclical Bull Market (no one knew that then, so we could also state that all instances occured within a Cyclical Bear Market). For example, the first low point that made the list was on 4/14/2000. The 3/24/2000 close of 1527 had previously marked the highest point and the beginning of a Cyclical Bear Market that lasted through the lowest close on 3/11/2000. That same date marked the beginning of the Cyclical Bull Market the continued through it’s end on 10/9/2007. You may notice that these dates are also marked on the table below since they were "picked up" by the 10% swings. Of course, the end of a Cyclical Bull Market is the beginning of a Cyclical Bear Market marked by that same date. Finally, the last 10%+ gain in the index started on 3/9/2009, which we now know was the beginning of the current Cyclical Bull Market as the Primary Trend today.

10 percent or more GAINS the past decade 

When the index gained 10% which it did 11 times over the past decade, its average gain was 30.52%. That isn’t far from the 33.7% average gain that occured the 93 times the index gained 10% in the past 82 years going back to 2/20/1928. And, during the past decade the move averaged 234 days and that is comparable to 222 days over the past 82 years. We could suggest that this data is more meaningful when we separate the it by cyclical trends. For example, we could remove the Cyclical Bull Markets (3/11/2003 – 10-9/2007 and 3/9/2009 -NOW) and probably have more meaningful information.  Without those two cycles, the 10%+ move averaged 55 days and the average gain was 18%. You can probably see how far we could take this to better quantify, define, and understand, directional trends… We’ll build on this, later.