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.