We’re deep in that nutty phase of the markets where they go pounding off in either direction, almost whimsically, depending on the latest bit of news. In other words, don’t worry, it’s not you, it’s them, or at least the markets.
The point was driven home to me today by a new chart from the good folks at Bespoke. It shows the product of the frequency of 1% up/down days on a monthly basis dating back to 1946. In the current month we’ve had 8 up days over 1%, and 7 down days, so the product is 56. The maximum in any month is 144, but we’ve only gotten to 100 twice.
How has the market done after such violence cusps? Well, the average three-month post-event return for months reading over 50 is 4.4%, with positive returns 80% of the time. Fun.