If history is a guide, the S&P 500 stock index may have another 8% to 20% to fall from the current level in the event of a recession, according to an equity research report issued Monday by Standard & Poor's. Depending on the severity of a potential recession, the report by S&P's chief investment strategist Sam Stovall sees the firm's flagship index bottoming at somewhere between 900 and 1030.

Markets have swung wildly in recent days, with widely followed commentators such as DoubleLine's Jeffrey Gundlach seeing parallels to the crisis of 2008 that sent markets diving. The lesson of 2008, according to S&P's Stovall (left), is: "Be proactive and expect the worst." In order to arrive at estimates of what the worst might look like, Stovall crunched the numbers for recessions since 1948 and found that earnings per share on average declined 15% to 20% and that trailing P/E ratios fell to 12 or 13 during market sell-offs.

If there is a second recession now and all specified conditions are met (e.g., declining EPS and P/E), the implied S&P level of 900 to 1030 is close to matching the 960 to 1070 level measured by the average of S&P 500 price declines during post-1948 recessions — a second metric by which to estimate price levels.