Top Nav

S&P 500 Performance After Highly Volatile Periods?

Andy Crowder

The S&P 500 (SPY) has vacillated widely over the past several weeks. In fact, one week ago the major market benchmark suffered its worst one day drop in over 100 days. But, that seems like a distant memory after Wednesday’s advance – the largest one-day gain in more than 100 days.

Through all of the crazy volatility the S&P 500 still managed to hold its important long-term trend line: the 200-day moving average.

This type of volatility often occurs during bearish cycles, however it is rare during bull markets.

According to Jason Goepfert of, there have been 20 other occurrences since 1928 where the S&P 500 experienced its worst day in 100 days followed by its worst day in over 100 days less than a week later.

How did the S&P 500 perform after such volatile times?

“Over the next six months, the average drawdown (maximum loss) suffered by the S&P was -2.9%.  That contrasts with an average maximum gain at its best point of +8.5%.”

What does this all mean?

It means that over the next six months the risk-reward is essentially 2-to-1.

Conclusion: the price action that we have witnessed lately typically means “intermediate-term gains for stocks”…but when the norm fails it “has preceded some of the worst pain in history”.

Food for thought.


Andy Crowder

Editor and Chief Options Strategist

Options Advantage and The Strike Price

Strike Price Offer

The Strike Price is your leading resource for insight into the world of options trading. Chief options analyst Andy Crowder will guide you through the best options strategies—telling you exactly where he's putting his money, and how you can make safe, reliable gains from some simple options trades. Your FREE subscription also includes Andy’s report "The One Vital Rule for Every Options Trade"—which reveals the #1 rule to achieve a high win-rate in every options trade.
You've successfully subscribed, click the link in your email to confirm your subscription.
There was an error, and you have not been subscribed, please try again.