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Bloomberg
If you don’t like the weather, wait a few minutes.
That’s how it’s been in the 2018 stock market, where the S&P 500 just rebounded from a 1 percent intraday loss for a third time this year. The turnaround followed three consecutive days of 1 percent declines, a stretch not seen since the start of 2016.
It’s not just recoveries. Stocks erased gains of a similar size two different times last month. Altogether, the number of big reversals over the past nine weeks is comparable to the total number seen in the previous two years.
While it’s tempting to portray recent turbulence as a return to normalcy, be advised: the S&P 500 is swinging around in a way that is beyond what is usually seen in
bull markets.
Two months into the new year, the equity benchmark has notched 15 days in which it moved 1 percent or more in either direction. That’s almost twice as many as in all of 2017.
At 36 percent of all trading sessions, the frequency of big days is higher than in all bull market years since World War II except one. That was 2011, when a downgrade of the US sovereign rating sent the index to the brink of a bear market decline of 20 percent.
Gone are the calm days. In their place are lurches and rebounds, as investors reassess the durability of the nine-year equity rally.
Lately, the prevailing direction has been down.