Ian Woodward's Investing Blog

A Perspective of the S&P 500 History

Next week will be interesting.  Just a few statistics on the S&P 500 to give a balanced view of where we stand: 

  1. The least % down for the 13 previous longest moves on the S&P 500 is -9.73%.  That was in 1990.
  2. The next lowest was back in 1953…who cares, but it was -14.82%
  3. The Average of the past 13 such long rallies is -28.05%.  Let us pray we don’t suffer that big a drop.
  4. We are currently down -7.91%, so we hope it holds at 8% or a bit more.
  5. We badly need a bounce play at least.  Call it a snap back this week. 
  6. That doesn’t mean we will be out of the woods…no pun intended while enjoying the golf with Tiger leading.
  7. If the downdraft sets in, understand that the least number of Trading days to the low was in 1987 with 39
  8. If we liken this to 1990 for a drop of around 10%, that took 43 Trading Days. 
  9. The ONLY saving grace is that the P-E of the S&P 500 is 15.20 which is the lowest since 1990
  10. If Corporate Earnings continue at this clip, we can hit 100 for the S&P 500 and that will give us plenty of Gas in the Tank.  The tug of war I described earlier between EPS reports and Sub-prime spill over has been won by the latter for now.  So, the bad news is that Technicals trump Fundamentals right now. 

Best Regards, Ian.

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