Friday, October 2, 2015

SP500 Field Guide To Corrections, The Most Important Chart In Your Tool Box

The market has been under pressure since July; a majority have an interest in calling the next big crash.  On August 21st some were calling for 1987 style crash (ridiculous), others immediately pointed out that this might be 2008 all over again when we lost 50%.  Most recently Carl Icahn made headlines with another major correction call, might be the 3rd one in 4 years, Danger Ahead.

The bottom line is that fear sells.  Nothing gets a blogger more hits than a blog post about the next upcoming crash, regardless of how far fetch it is.  The media gets the most amount of eyeballs during corrective markets, Markets In Turmoil.  Investors continue to be haunted by 2008.  Every time we get a standard correction they believe it will lead to 50% decline.  Crashes are not common, a market that goes up and down is.

We have been giving the courtesy to post the most valuable guide to corrections by the best quant site in the world right now (originally posted on 8/23/2015).


  • Years 1950-2015, 65 years
  • How many 5% corrections from All Time Highs-61, happens all the time.
  • How many 10% corrections from All Time Highs-20 + 1 the ongoing one, standard.
  • How many 20% corrections from All Time Highs-9, they happen.
  • How many 30% corrections from All Time Highs-5, cleansing.
  • How many 40% corrections from All Time Highs-2, but yet this is what everyone fears when we are down 10%.
  • How many 50% corrections from All Time Highs-1.  Just 1, don't believe the fear hype, stay grounded.

Embiggen, print it, and hammer it to the wall. Here's the link.

Work With Me

No comments:

Post a Comment