In this paper, we investigate floods and droughts in the Upper Mississippi basin over a 50-year period (1950--1999) using a hydrological model (Variable Infiltration Capacity Model -- 3 Layer). Simulations have been carried out between January 1950 and December 1999 at daily time-step and 1/8¿ spatial resolution for the water budget and at hourly time-step and 1¿ spatial resolution for the energy balance. This paper will provide valuable insights to the slow response components of the hydrological cycle and its diagnostic/predictive value in the case of floods and droughts. The paper compares the use of the Palmer Drought Severity Index against the anomalies of the third layer soil moisture for characterizing droughts and floods. Wavelet and coherency analysis is performed on the soil moisture, river discharge, precipitation and PDSI time series confirm our hypothesis of a strong relationship between droughts and the third layer soil moisture.