Historical Perspective

Like I explained yesterday, perspective is necessary when the market is behaving badly. As of yesterday, the S&P was down 15.9%, the RUT was down 21%, the NASDAQ was down 18.2%, and the Dow was down 14.8%. These are major numbers and we haven't seen anything like them since 2002.

But what does it mean historically when the S&P is down 15%?

It has occurred 24 times since 1965. The average downturn is 22%. From the time it hits 15% down, it takes an average of 35 days to hit its ultimate low. That's the bad news.

Now, the good news -- The average rally after this type of correction up to the next peak in the market is 44%! My goodness! That is good news!