Beginning the year, there had only been five 1% down days over the previous six months. With Friday's decline, the total has edged up to nine 1% down days over the previous six months. If the SP500 were to closes at its current level (1846), this would be the tenth 1% down day in the last six months.
We suspect there is more to come. Our modeling of the Fed's taper--which is so far spot on--suggests that the occurrence of 1% down days should pick up as the year progresses. We compare the 3-month change in Fed asset purchases to our 1% down indicators below.
