The Russell 2000 ETF, which represents the 2000 smallest companies in the US, fell as much as 5%.

@rip_trader at X provided the last six times, in the history of the ETF (Incepted near May 2000), that we are down by more than 5%:

March 16, 2020: IWM dropped approximately 14.3%, from $114.79 to $98.36, amid market turmoil due to the COVID-19 pandemic.

March 12, 2020: The ETF fell about 9.2%, from $127.69 to $115.88, during a period of significant market volatility.

March 9, 2020: IWM decreased by around 6.7%, from $134.25 to $125.28, as global markets reacted to pandemic concerns.

The top panel is the 3-month VIX divide by the spot VIX, which if very low give an indication that current VIX is high relative to the future VIX, which should usually normalize going forward. Usually a good indication we are closer to a intermediate low in the market.

Bottom panel is the relative strength indicator.

June 24, 2016: Following the Brexit referendum, IWM declined approximately 6.1%, from $115.02 to $108.01.

August 8, 2011: The ETF dropped about 8.9%, from $73.90 to $67.34, amid concerns over the U.S. credit rating downgrade.

May 6, 2010: Known as the “Flash Crash,” IWM fell approximately 7.9%, from $73.83 to $68.00, before recovering some losses.

I find it remarkable that all these happen without a 5% drop during 2008 and 2000, so I went ahead and measured. True enough some of these candles were more than 5%:

In 2008:

In 2007:

In Jul 2002:

In Sep 2001:

That is about all.

To be fair, not having access to the data sucks (if you are curious about these things).

The recent 5% fall has been buy points, especially with the 3-month VIX to spot VIX positioning. Looking over longer term, older 5% falls show that there may be further downside or that the market went nowhere for months.

So which is why?

Look at your time horizon. Market going nowhere for months is quite common but what you got to figure out is whether your time frame of investing is in years, months or weeks.

You will process this information differently.

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The post The Russell 2000 Went Down as Much as 5%. Here Are All the Times The ETF Went Down That Much in a Single Day. appeared first on Investment Moats.