According to Justin Walters of the research firm Bespoke Investment Group, there have been 283 swings in the Dow of at least 4 percent since 1900.
That’s less than 1 percent of the 30,414 trading days.
More than a tenth — 10.95 percent — of those have come since October 2007. It’s the same for the 622 days plus or minus 3 percent and 1,735 plus or minus 2 percent days since 1900.
The data confirm what you’re probably feeling: This is nuts.
It used to be that swings of 1 percent in equity markets were considered normal levels of volatility. And 2 percent moves were even less common.
So if it seems like wild swings in the market are more frequent than ever, that is because they are.
MORE FROM THE WASH POST:
STOCK INVESTORS AREN'T MICRO-TRADING STOCK AND AREN'T BUYING SHARES IN COMPANIES.STOCK INVESTORS ARE MACRO-TRADING MARKETS AND CURRENCIES AND ECONOMIES.
THIS IS ONE REASON WHY THE MARKETS FOR THE LAST SEVERAL YEARS HAVE BEEN MUCH MORE VOLATILE THEN IN PREVIOUS DECADES.
(75% OF THE BIGGEST ONE-DAY LOSSES AND ONE-DAY GAINS HAVE BEEN SINCE 2008, AND 90% OF THEM HAVE BEEN SINCE 9/11/01.)
YES: PROGRAM TRADING AND COMPUTER TRADING MAKES TRADING MORE STOCKS MORE RAPID, AND THIS ALSO HAS AN EFFECT ON VOLATILITY.
I AGREE THAT THE RALLY IS OVER. A BEAR MARKET IS ABOUT TO BEGIN AND IT MIGHT NOT END UNTIL A GOP CANDIDATE DEFEATS OBAMA.
The rally that began in March 2009 looks to be running out of steam. Indeed, those gains have been among the best post-crash rallies of the past century. Only the 1932-33 and 1935-37 runs saw stronger rallies over a two-year period. The first saw the Dow Industrials double in two months. It gave back nearly all those gains by March 1933. From that low, the Dow once again doubled by July, only to give back about 26 percent by October 1933. And the next bear market rally — a two-year screamer from March 1935 to March 1937 — saw an astounding 135 percent in gains. That ended in yet another collapse, this time of 56 percent.
Compare that with the current run — the S&P 500 gained 105 percent from March 6, 2009, to May 6 of this year. It is getting harder to believe this run is still intact.