(Note: This post is a bit of a 'piggy-back' off of Biffermas' post in regards to the '87 market crash)
There was a number of creative titles I could have given this article like "Markets Gone Wild", "Pay-Day Some-Day" among others, but I figured I'd be a little bit more to the point – and that's what I did. Don't think for a second that history can't repeat itself, because it can and it does so all the time. In fact that is one of the tenants of technical analysis, that you use past market behaviors to predict future trading opportunities. And as a chartist, I couldn't help but notice the grave similarities to the market of today to that of 1987.
After taking a dip in early 1987, what is interesting is the market drove right back up, at a similar angle to that of today's rally until that fateful day in 1987 when the market, overnight, dropped 21%. That would be like waking up in the morning and seeing the futures down 254 points on the S&P to 956. From peak to bottom the S&P dropped 36% in less than 2 months, and in less than a week it dropped 29% – and this, my friends, was after an incredible market rally preceding it.
Here's a Look at Today's Market.
Pretty crazy, eh???? I thought so.
Now for those of you, that need me to "dumb-down" what I just said above into layman's terms or you're just one of those Euphoric-Bulls who just doesn't comprehend what I am saying, I point you to Tommy Boy trying to explain what happens when you buy "the other guy's break pads" and his disastrous attempt to sell his product. His philosophy and reasoning for buying his breakpads is just as absurd as all of the bulltards out there that can't fathom how this market could ever go down again. Or, if you'd like, just use the video to understand what happens to markets that run out of control and what there eventual fate looks like!
I present to you – the modern day Bulltard - fat, unaware, and wears a clip-on tie!
Originally Posted By Ryan Mallory on his blog at SharePlanner.com
