The herd mentality gripped the equities markets and exchange traded funds during the recent bout of volatility, moving broad benchmarks in all-or-nothing days. Nevertheless, stock investors may look to brighter days ahead.
According to Bespoke Investment Group, “all or nothing days,” or trading sessions when the number of advancing stocks minus declining stocks in the S&P 500 hit over 400 or less than negative 400, were more frequent in recent months, reports Julie Verhage for Bloomberg.
Looking at the August selloff, on the last Monday market plunge saw 499 of the 502 components in the S&P 500 index falling in unison.
“Since the sell-off really began in earnest on 8/20/15, the S&P 500’s daily advance/decline reading has been above +400 or below –400 on eight trading days through Friday (as of 2PM Monday, the S&P 500’s A/D reading is currently above +400 again),” according to Bespoke Investment Group.
From the period between August 20 and September 1, the SPDR S&P 500 ETF (NYSEArca: SPY), iShares Core S&P 500 ETF (NYSEArca: IVV) and Vanguard 500 Index (NYSEArca: VOO) have declined about 7.1%.
On a 12-day basis, Bespoke pointed out that there have not been this many all or nothing days since the 2011 selloff or the 2008 financial downturn.