Green Gains: ES and NQ Rally on St. Patrick’s Day Rollover

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The ES and NQ opened higher, sold off, and then started moving back in their initial direction—up. A large part of this was due to the start of the rollover. At one point, the ESH/ESM volume was 1 million contracts each, meaning a large percentage of the trading activity was the roll. This created what I call “thin-to-win” conditions.

Plus, it was St. Patrick’s Day! Either way, the holiday, the roll, and all the buy stops helped push the ES and NQ up. In my book, there is little to be said, the ES and NQ were oversold and overdue to rally. The YM gained 1% after last Friday’s rally, while the ES and NQ closed up 0.75% and +0.64% despite a weaker-than-forecast retail sales number.

All I can say is other than Canada saying it would cut off electricity to 1.5 million customers on the East Coast as the Trump tariff headlines were quiet after the ES’s first correction since late 2023.

I asked GROK on Twitter when the last 10% corrections were in the S&P 500 and it came up with this. I used GROK because it’s pretty accurate.

Recent S&P 500 Corrections (10% Declines)

Recent S&P 500 Corrections (10% Declines)

February 19, 2025 - March 13, 2025 (Recent Correction)

• Peak: 6,123 (February 19, 2025)

• Trough: ~5,521.51 (March 13, 2025, down 10.1%)

• Decline: 10.1%

• Details: The S&P 500 entered correction territory on March 13, closing at 5,521.51, down 10.1% from its February 19 high. This rapid drop was attributed to economic uncertainty, tariff threats, and shifting investor sentiment following a strong start to the year. By this point, the index had erased its post-election gains from November 2024.

July 31, 2023 - October 27, 2023

• Peak: ~4,588 (July 31, 2023)

• Trough: ~4,129 (October 27, 2023, down 10.3%)

• Decline: 10.3%

• Details: This was the last correction prior to 2025, driven by the Federal Reserve signaling prolonged high interest rates to combat inflation. It took roughly three months to bottom out, with a recovery following shortly after.

January 3, 2022 - October 12, 2022 (Bear Market, Exceeding 10%)

• Peak: 4,796.56 (January 3, 2022)

• Trough: 3,583.07 (October 12, 2022, down 25.3%)

• Decline: 25.3%

• Details: While this started out as a correction, it deepened into a full bear market (20%+ decline). It’s included here as it passed the 10% threshold early in 2022. The decline was linked to inflation fears, Fed rate hikes, and geopolitical tensions. The full recovery took about 21 months.

February 19, 2020 - March 23, 2020 (Bear Market, Exceeding 10%)

• Peak: 3,386.15 (February 19, 2020)

• Trough: 2,237.40 (March 23, 2020, down 33.9%)

• Decline: 33.9%

• Details: Triggered by the COVID-19 pandemic, this was a swift correction that turned into a bear market in just over a month. The S&P 500 recovered remarkably fast, regaining its peak by August 2020.

September 20, 2018 - December 24, 2018

• Peak: 2,930.75 (September 20, 2018)

• Trough: 2,351.10 (December 24, 2018, down 19.8%)

• Decline: 19.8%

• Details: This correction nearly hit bear market status, driven by rising interest rates and trade war concerns. It bottomed out on Christmas Eve and rebounded in early 2019.

January 26, 2018 - February 8, 2018

• Peak: 2,872.87 (January 26, 2018)

• Trough: 2,581.00 (February 8, 2018)

• Decline: 10.2%

• Details: A rapid correction sparked by inflation worries and a spike in bond yields. It was short-lived with the market recovering within months.

April 29, 2011 - October 3, 2011

• Peak: 1,363.61 (April 29, 2011)

• Trough: 1,099.23 (October 3, 2011)

• Decline: 19.4%

• Details: Driven by the European debt crisis and U.S. debt ceiling debates, this correction approached bear market levels before recovering.

April 23, 2010 - July 2, 2010

• Peak: 1,217.28 (April 23, 2010)

• Trough: 1,022.58 (July 2, 2010)

• Decline: 16.0%

• Details: Known as the "Flash Crash" period, this correction was fueled by Eurozone instability and a sudden market drop on May 6, 2010.

January 15, 2008 - Early 2008 (Bear Market, Exceeding 10%)

• Peak: 1,549.38 (October 9, 2007, broader context)

• Trough: Declined past 10% by early 2008, eventually hitting 683.38 (March 9, 2009)

• Decline: Over 50% (full bear market)

• Details: The Global Financial Crisis began with a correction in early 2008 and escalated into a severe bear market. The 10% decline occurred early in the downturn.

July 19, 2007 - August 15, 2007

• Peak: 1,553.08 (July 19, 2007)

• Trough: 1,370.60 (August 15, 2007)

• Decline: 11.9%

• Details: An early warning sign of the financial crisis, driven by subprime mortgage concerns. This was a precursor to the larger 2008 decline.

There were only ten 10% corrections in 23 years!

Observations on Market Corrections

• Frequency: Historically, S&P 500 corrections of 10% or higher occur roughly once every 1-2 years, though timing is irregular. The gap between the October 2023 and March 2025 corrections (about 17 months) aligns with this average.

• Severity: Of the last ten instances where the S&P has dropped 10%, several escalated beyond 15% or into bear markets (20%+), notably in 2022, 2020, and 2008. The 2025 correction, as of March 17, sits at 10.1% but could deepen.

• Recovery: Recovery times vary widely - ranging from a few months (e.g. 2028) to over two years (e.g. 2008-2009). The average correction bottoms in about 4-5 months and recovers in a similar timeframe, per historical norms.

The bottom line is down 10% has always lured buyers in but a 20% correction also brings the buyers but as you can see, they are harder to come by.

A 20% correction in the S&P 500 is commonly referred to as a bear market, defined as a decline of 20% or more from its most recent peak. Below are the last instances of 20%+ corrections in the S&P 500 based on historical data up to March 17, 2025.

Recent 20%+ Corrections (Bear Markets)

• 2022 Bear Market (-25.3%) – Fed hikes & inflation.

• 2020 COVID Crash (-33.9%) – Pandemic lockdowns.

• 2007-2009 Financial Crisis (-56.8%) – Subprime mortgage collapse.

• 2000-2002 Dot-Com Bust (-49.1%) – Tech bubble burst.

• 1987 Black Monday (-33.5%) – Sudden program-trading crash.

In 28 years, there have only been 5 bear markets.

I’m not here to fight City Hall—if the ES and NQ are going up, I want to go along for the ride. Yesterday’s numbers were weaker than expected, but not weak enough to hold the markets down. Late in the day, both the ES and NQ attempted to rally, but the ES dropped 30 points into the cash close, while the NQ fell 130 points.

While I consider myself a pessimistic bull, the stats above speak for themselves—10% and 20% corrections are few and far between!