We Say Jump, Mr. Market Says “How High?”
Okay, just some wishful thinking in the title there. Everybody expects either a bounce, some intervention, or both:
Note that Dow futures are down 11 points with 30 minutes until the open.
The last positive day in SPY was 12/26/07. The high that day was 149.68. Since then, we’ve had 8 consecutive down days, closing yesterday (1/8/08) at 138.91, just a bit off the lows of the day. That’s a loss of 10.77 points, or a 7.19% decline. One reason this has been particularly frustrating for us is that such a rapid decline – without an up day – gives us no good opportunity to make an early exit, should we be so inclined.
Going back 5 years in SPY, there were only two other similar occasions, where the index closed down so many consecutive days:
- On June 5-13, 2006, SPY had 7 straight days down, a 5.3% decline from its high prior to the selloff. It recovered a significant portion of that decline over the next 12 days.
- In early October 2005, SPY fell for 9 days (if you ignore one spinning top in the middle of that series) for a 4.8% decline. It made an almost total recovery within the next 14 days.
This is just an anecdotal eyeballing of the charts, and it certainly doesn’t prove anything. But even we’re thinking of loading up on a few names at these levels, and we hate value investing!
Wed, Jan 9, 2008 | Jared Woodard
Market Commentary