Don’t bet on a smooth rebound: October has seen the biggest peak-to-trough plunges since 1995, according to data compiled by Bloomberg. Using the difference between the S&P 500’s level at the start of each month and its lowest point intraday, October sees a 5.3 percent downswing, on average. That compares to declines of 4.6 percent in August and 4.1 percent in September. The road ahead looks more cheery -- December’s average dip is only 2.5 percent.
“Extreme trading like this has a tendency to linger longer than we think,” said Frank Cappelleri, a market technician at Instinet LLC in New York. “Patience is key in a situation like this, realizing that any particular movement in a single day is not going to give you an idea of what’s going to happen two or three months down the road.”