Rollercoaster
Late last week and over the weekend, there were multiple predictions calling for more volatility. For instance, CNBC’s Jim Cramer drew parallels with “Black Monday”. Most investors probably haven’t even had lunch yet, but already it’s looking like a session for the history books. As we noted in a post on X, there have already been multiple mid-single-digit swings in both directions. As shown below, with the declines the S&P 500 (SPY) briefly dipped into bear market territory which we discussed the implications of in last Friday’s Bespoke Report.
Again, it’s not even noon but the opening move in addition to the declines last week has been enough to earn accolades. For starters, SPY has now had negative downside gaps (open lower than the prior day’s close) nine sessions in a row. Since SPY began trading in the early 1990s, there have only been four other such streaks. The most recent streaks were clustered around 2015 and 2016 while the other occurrence was way back in January 1995.
Not only has there been such consistency to the downside at the open, but the moves have been very large. For four straight sessions now, SPY has gapped down at least 1% which is a new record. Within that streak was a 1.05% decline last Wednesday, a 3.4% drop Thursday, a 2.4% decline Friday, and a 3.2% decline today. The only other streaks of 1% gaps down that even lasted for three days occurred in September and December 2008 and later in March 2020.
As noted earlier, there have already been some wild swings intraday. As a result, the intraday trading range has blown out to epic proportions, and again, it’s not even lunchtime. As shown below, today’s intraday high-low spread for SPY has been 8.58%. In the ETF’s entire history, there have only been 20 other trading days with as wide of a range. The most recent of these before today was during the COVID Crash. The China currency devaluation in August 2015 was another relatively recent example of a huge intraday range although it wasn’t quite as big as today, and before that, there were multiple instances around the time of the Great Recession, July 2002, August 1998, and October 1997.
