S&P 500 Snapshot: A Savage Selloff, But a Close Off The Intraday Low
February 8, 2016
by Doug Short
Our benchmark S&P 500 opened the week with a savage selloff. The index plunged at the open to its 11 AM low, drifted a bit higher into the noon hour and then sold off to its -2.74% intraday low shortly before the final hour of trading. Some buying during that final hour trimmed the daily loss to -1.42%. The index is now down 9.32% for 2016 and down 13.02% off its record close last May.
The yield on the 10-year note closed at 1.75%, down 11 basis points from the previous close and its lowest level since February 2nd of last year.
Here is a snapshot of past five sessions.
Here is a daily chart of the index. Volume rose on today's selling. Will the bounce off the intraday low have some staying power? The market will probably be holding its breath in advance of Fed Chair Yellen's two days of congressional testimony, which starts at 10 AM on Wednesday, and there are speeches scheduled for three FOMC members (Williams on Wednesday, Kaplan and Dudley on Friday).
A Perspective on Drawdowns
Here's a snapshot of selloffs since the 2009 trough.
A Perspective on Volatility
For a sense of the correlation between the closing price and intraday volatility, the chart below overlays the S&P 500 since 2007 with the intraday price range. We've also included a 20-day moving average to help identify trends in volatility.
Here is the same chart with the 50- and 200-day moving averages.