Last week the S&P 500 declined 1% or more three days in a row, Tuesday through Thursday. Historically, a negative streak such as this is not all that common. Including last week, it has happened to S&P 500 51 times since 1950. Last week’s losing streak was relatively mild compared to past streaks. First it lasted just three days and the combined losses for the three days were just 3.67%. The longest losing streak of consecutive daily 1% or worse declines was seven trading days in October 2008. S&P 500 shed 22.55% across the seven days. The worst streak by performance was four days in October 1987 (S&P 500 down 28.51%).
In the chart above, the 30 trading days before and 60 trading days after the last 50 losing streaks are plotted. Double-digit losses, 1987, 1998, 2002, and 2015, weight on overall average performance. Sixty trading days after the streak ended, S&P 500 had recovered nearly all of its losses incurred during the streak.
In the table below, S&P 500 performance 1-, 3-, 6- and 12-months after the streak ended appears. Performance 1-month after is positive, but not overwhelmingly so. At 3-months after and beyond, S&P 500 average gain and percentage of time higher improved noticeably.
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