The Last Time The Market Did This Was After Kennedy's Assassination
Posted by Tyler Durden on October 8, 2017 4:51 pm
Tags: CBOE, CBOE Volatility, Chicago Board Options Exchange, Economy, Equity Markets, Euro Stoxx 600, Finance, Great Depression, Index, Mathematical finance, MONEY, Russell 2000, Russell MicroCap, S&P 500, S&P 500 Index, Technical Analysis, VIX, Volatility
Categories: CBOE CBOE Volatility Chicago Board Options Exchange Economy Equity Markets Euro Stoxx 600 Finance Great Depression Index Mathematical finance money Russell 2000 Russell MicroCap S&P 500 S&P 500 Index Technical Analysis VIX Volatility
There have only been eight moves of at least 1% for the S&P 500 Index so far this year – the least since 13 in 1995. The all-time record was an incredible three in 1963.
What about a big move? The last time the S&P 500 moved at least 4% was nearly six years ago.
In fact, the S&P 500 had four consecutive days with 4% (or greater) changes in August 2011. Other than 2008 and the crash of ’87, that is the only other time since the Great Depression to see four consecutive 4% changes.
That isn’t anything like today’s action…
As the chart below shows, so far in 2017, big moves have been nonexistent; and even 1% changes have been rare.
Per Ryan Detrick, Senior Market Strategist,
“If you had forecast that the 11 months after the 2016 U.S. presidential election would be one of the least volatile periods ever, you would be in the minority.
Then again, the last time we saw a streak of calm like this was the year after John F. Kennedy was assassinated in November 1963.
Once again proving that the market rarely does what the masses expect and usually surprises us.”
And as LPL Research additionally notes, as equity markets continue to move higher, and as a result, several long streaks are taking place. Per Ryan Detrick, Senior Market Strategist,
“This is the Frank ‘The Tank’ market, as multiple streaks have taken place recently that are in the history books, with some being the most impressive ever.”
Here are some of the notable recent streaks:
- Yesterday ended a streak of 17 consecutive closes for the S&P 500 Index within 0.5% of its previous closing price – the longest streak of small daily changes since 1969.
- The S&P 500 Index has closed higher 8 days in a row for the first time since 2013 and has closed at all-time highs 6 days in a row for the first time since June 1997.
- The S&P 500 has been up 8 consecutive quarters for the fifth time ever.
- The Russell 2000 Index recently closed at a new all-time high eight days in a row.
- The Euro STOXX 600 recently closed higher nine days in a row—the longest streak in more than two years.
- The CBOE Volatility Index (VIX) yesterday closed at 9.19, its lowest close in history. It also closed beneath 10 for 7 consecutive days for the second time ever. Last, it averaged only 10.94 in the third quarter which is its lowest quarterly average ever.
- The Russell Microcap Index recently closed at a new all-time high 12 out of 14 days.
- The S&P 500 has closed higher a record 11 consecutive months on a total return basis (i.e., including dividends). Since 1950*, that has only happened two other times, with both instances taking place during the bull market of the 1950s. Be aware though, neither of those made it to 12 months.
Now That’s a Win Streak
Frank “The Tank’s” run through the quad and into the gymnasium eventually ended – and these long market streaks will eventually end as well. It is important to remember that daily streaks of new highs can’t go on forever, and that increases in volatility aren’t necessarily something to be overly concerned about; pullbacks are a regular part of investing.
In fact, the latter stages of the economic cycle have historically seen relatively more volatility, and we expect it to pick up in the fourth quarter and as we head into 2018.