May

14

during the 1987 crash1987 rhymes with flash crash?

1. market extended multi months correction overdue

2. correction was swift and violent making one day records

3. something new and unique was blamed for the crash

4. new regulations followed 87, talk is similar to new rules today

5. bears thought that the crash was the first down leg of a bear market; now bulls believe correction over

6. prior crash uncertainty in forex in 87 -Baker -dollar; now euro uncertainty -bailouts

7. fear after crash in 87 lingered long, no fear now really.

8. Volume was very high after 87-volume much weaker today

There is a whiff of similarity to my mind.

How come when there is talk about a "healthy" retest of the lows that would be needed to solidify a bottom like there was in March of 09, that retest never came and now after a ripper of a drop there is no talk at all about a retest. It's like that possibility doesn't exist, just like last week when the possibility of the Cavs losing to Boston wasn't even considered. 

I'm not arguing either, and I listen to sound bites only here and there, but I listen for the theme or the buzz that the media is playing, which is usually aimed at the little guy and which is usually wrong. So like the healthy test that was bandied about never happened in 09 March, so now you hear that the correction is over and it's blue sky ahead, which tells me that I should suspect 1. a healthy retest or 2. a breech of the flash crash lows–to follow my buzz inverse indicator.

Craig Mee comments:

Considering the onset of floor closures and computerized algo trading and the changes that has created, it seems comparing one crash to another opens more questions than answers. I'm not sure if in the history of markets has there been such a period of change. 


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