SPX Statistics

S&P 500 was down 8.2% in May 2010, which is the worst monthly performance since February of 2009.

SPX was down more than 5% in a month 63 times since January 1950. In 33 out of 63 cases, the following month was negative for the index. On the graph above you may see the distribution of 5% down months. December had only one occasion where SPX was down more than 5%.

Minervini on Patience

After a sharp decline, some stocks can have short-term bounces or rallies; however, in my experience few stocks bottom out when you expect them to do so. And, even if they do bottom, often they simply move sideways for an extended period, wasting valuable time. There are periods in the market when the reward to aggravation ratio is just not worth your valuable time and capital.

If you’re looking to find the next big market winners—the market leaders—then you want to keep your eyes peeled for the stocks that hold up the best (not the worst) during a market decline, and then buy them as they emerge from the market’s wreckage and move into new high ground. This will occur AFTER the stock’s price undergoes a consolidation period of several weeks or more.