Yesterday afternoon we sent out a B.I.G. Tip to Bespoke Premium and Institutional subscribers showing how frequent “all or nothing” days have become.  We used the advance/decline line for the S&P 500 to show what that looks like.  But the all-or-nothing attitude in the market is visible in index-level prices as well.  Below we show intraday composites for two sample periods that include recent market volatility.  The charts show the average intraday pattern for the S&P 500 on up or down days since the 7/21 high and since the more recent high on 8/17 that immediately preceded the steep 10% correction the index experienced.  These charts were included last night in The Closer, our popular macro run-down sent to Bespoke Institutional clients on a nightly basis.

As the charts show, on down days recently, there tends to be a selling crescendo into the close; stocks also tend to accelerate lower throughout the trading day.  On up days, we see a similar pattern, with trends higher throughout the day accelerating after lunch and a burst into the close.  One other thing we noticed: there is massive volatility in the final few minutes of trading.  On down days, we have tended to see a small pop or at least sideways movement after 3:30 PM, but then a shocking drop into the close. On up days, stocks have gone almost straight up (on average) in the last half hour of trade.  All-or-nothing indeed.  Start a 5-day free trial to access our members only area today.

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