Friday, January 22, 2010

Comparing SP500 Percentage Drops in 2009 to Now

From Afraid to Trade:

With the market in a pullback retracement mode currently, I thought it would be a good idea to look back at the S&P 500 rally off the March 2009 lows and get a sense of what to expect in terms of the average pullback.

Let’s take a look.

Using TradeStation, I’m showing the percentage decline, time span, and point decline feature of the basic trendline tool.

I started with swing highs and drew to swing lows to assess the values of the decline to get an average of what to expect now that we are in pullback mode.

As you can see from the chart, we only had four ‘meaningful’ pullbacks (unless you count the brief May and early August mini-retracements).

The pullbacks include the following:

June: -9.10%
August: -4.41%
September: -5.57%
October: -6.42%

Average: -6.37%

Current Retracement (as of mid-day January 22): Down 3.75%...MORE