With the S&P 500 falling 9.08% QTD, it has been the sixth-worst start to the fourth quarter in the history of the S&P 500.  The only worse Q4s (through 37 trading days) came during some of the worst years for the stock market (1929, the 1930s, 1973, 1987, and 2008).

Below is a table showing the worst starts to Q4 for the S&P 500 through 37 trading days.  Any drop of more than 2% at this point in the quarter made the list.  As shown in the table, the average change for the S&P for the remainder of these years has been a gain of 2.77% with positive returns 78.26% of the time.  For all other Q4s in the S&P’s history, the average change for the remainder of the year has been +1.61%.

Of course, it’s not all good news.  If you look at the window of Q4s that were down between 8% and 12% like we are this year, the S&P actually declined for the remainder of those four years.

And in case you don’t remember, at this point in Q4 2008, the S&P was down 35.5%!  In that year, the S&P ended up rallying 20% for the remainder of the year before plummeting to new lows again in the first quarter of 2009.

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