5 Fast Facts About the Boring S&P 500
2017's been a nutty year.
It's been a remarkably sleepy year, with the S&P 500 grinding up at a snail's pace despite growing geopolitical tensions, stretched valuations, and an endless flurry of headlines out of Washington courtsey of President Trump.
So I dumped 9,438 trading days worth of data — going back to January 3, 1980 —
to give you a numbers-based breakdown of just how weird 2017 is.
1) 1% Days
The S&P 500 has moved 1% or more in a day only 4 times in 2017.
In 2016, we had 4 daily 1% moves by January 8!
And before 2017, the market had 1% daily moves on average 63 times a year!
2) Up Days and Down Days
In 2017, 54.7% of all trading days have been up days.
While it's felt like the market only goes up a little bit every day, this is only slightly above the pre-2017 average of 53.1%.
3) Intraday Volatility
I calculate a day's trading range with the following formula:
High minus low, divided by the prior day's close.
So if the S&P had a 20-point difference between its high and low, and the prior day's close was 2000, the range would be 1%.
The average daily range in 2017 has been 0.6%.
This is less than half the pre-2017 average of 1.3%.
That means intraday movement is running at less than half the long-term average.
4) Average Daily Move
On average, the S&P has moved only 0.3% per day in 2016.
This is dramatically lower than the pre-2017 average of 0.8%.
So if you're falling asleep watching the major averages, you're not alone.
I write about the major averages every day, and my daily mission is now “find an interesting way to say nothing happened!”
5) Finishes Near the Highs of the Day
For my final piece of analysis, I wanted to see if the S&P 500 has tended to finish closer to the highs of the day.
So I looked for days where the S&P 500 finished in the top 1/3 of the daily range. (the high minus the low).
We have had 106 trading days through Monday, and the S&P 500 finished in the top 1/3 of the range 54 times.
That's 51%.
Pre-2017, the S&P finished in the top third of its range just 42% of the time.
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The takeaways are simple:
1) The S&P 500 is not moving intraday
2) The S&P 500 is not moving day-to-day
3) Judging by the trend for us to finish near the highs, it doesn't seem to pay to short the market intraday.
4) If you're looking for action, focus on hot momentum stocks… not the indices and related ETF's!