When 499 of the S&P 500 fall in a day

Fun little factoid from my friend Jon Krinsky at MKM Partners about yesterday’s bludgeoning:

Among the many extreme breadth readings yesterday was that 499 of the S&P 500 components closed negative. Granted there are now 502 stocks in the S&P 500, but that is still the 2nd highest reading going back to 1996. The only higher reading was on 8/8/11, which saw 500 stocks down, and the next day SPX was +4.74% and 5 days later +7.60%. We looked at all readings greater than 490, and avg. returns were:

 

1 day +0.58%

2 days +0.80%

3 days +1.14%

5 days +1.64%

10 days +0.97%

 

We should note, however, that SPX was positive only 13 of 23 times looking one and three days out.

Josh here – So yes, combined with the extreme bearish sentiment I discussed this morning, there is some hope of another face-ripping bounce. But do you buy into it or sell into it?

Follow Jonathan Krinsky on Twitter

Read Also:

Chart o’ the Day: When Sentiment Nosedives (TRB)