Up and Down and Round and Round

(Bespoke, June 3, 2010) From February 8th to April 23rd, the S&P 500 climbed 15.9%. From April 23rd through yesterday, the index was down about 10% on a closing basis. As shown in the candle chart below, the mountain has been a lot steeper on the way down than it was on the way up. On the way up, the market basically inched a little bit higher each day in a very tight range, averaging a daily hi-lo spread of 0.99%. On the way down, investors have been thrown off a cliff, with huge moves and an average daily hi-lo spread of 2.47%. After making a steep ascent and then basically falling down, markets now sit right where they did in early February. This is one case where slow and steady did not win the race.

Editing Assistant: Frances Wu