We’ve been saying this for a while now, but the next time the S&P 500 experiences a drop of more than 1%, it’s going to feel like a crash to many investors.  That’s because 1%+ down days have become so foreign lately.  As investors get used to only very small declines on very rare occasions, drops of 1%-2% — which were much more frequent up until the end of 2016 — feel MUCH more painful when they finally do occur.

Below is a chart showing historical streaks of trading days without a 1%+ down day going back to 1945.  While the current streak of 108 trading days isn’t that close to the record streak of 184 trading days seen back in 1963, it’s notable that we just had a 109-trading day streak end last March as well.

Prior to the two recent 100+ trading day streaks without a 1%+ down day, the last two came back in 1995.  1995 was a year that saw very similar action to what we’ve seen over the last 12 months.

If we tighten up the margin of the decline even more, the S&P 500 has not had a decline of 0.60% in 96 trading days.  As shown below, that’s easily a record going back to 1945!

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