Pullback Ladder
^GSPC sees 1.7 dips of -3% a year, and only 20% of them ever reach -10%.
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How often the S&P reaches each drawdown rung (3/5/10/15/20%), and — the part that actually drives a staged buy — how often an episode that reached one rung went on to reach the next. Episodes are counted peak-to-trough from a running all-time high, so one long decline counts once rather than once per rung. Includes forward returns from each rung touch and median days back to a new high, which together give the empirical basis for sizing a dip-deployment ladder.
- 679 signals since 1950-01-01.
- ^GSPC sees 1.7 dips of -3% a year, and only 20% of them ever reach -10%.
When to run this study
Run when the index is off its high and you are deciding whether to deploy now or hold back for a deeper level. Gives the unconditional frequency of each drawdown rung, the conditional odds that the rung you are standing on escalates to the next one, and what buying each rung has historically returned. Most useful for sizing a staged dip-deployment ladder.
Historical results
Base rates — 77 years of ^GSPC
| Rung | Episodes | Per year | Once every (days) | Median days to new high |
|---|---|---|---|---|
| -3% | 131 | 1.71 | 213 | 30 |
| -5% | 74 | 0.97 | 378 | 43 |
| -10% | 26 | 0.34 | 1076 | 205 |
| -15% | 15 | 0.20 | 1865 | 293 |
| -20% | 11 | 0.14 | 2543 | 402 |