Now if the Dow lost three THOUSAND points...Aaron Pressman
I’ve been graced by good fortune this week it seems, at least blogwise, if not in my 401(k). Yesterday’s entry, written before the market opened, took a quick look at comparing 2007 to 1987 and the stock market’s crash-worthiness. It’s now a red hot subject thanks to yesterday’s big number, small percentage drop in the market. Which does add another parallel, of course. The Friday before Black Monday, the market had a terrible but not horrific drop. And just to put things in perspective, for the Dow today to match the 22.6% drop of October 19, 1987, the index would have to lose 3,045 points in one day. Youch!
Another point of difference from 1987 not mentioned yesterday is the new circuit breaker policy imposed on all the exchanges since the ‘87 crash. At one point yesterday, I noticed CNBC indicating that trading curbs had been triggered at the New York Stock Exchange. If sellers want to sell, trading curbs probably only delay the process. Maybe instead of one 3,000 point drop, we have two weeks of 300 point declines.
And for further reading on this cheery subject, may I suggest:
Bargain hunting? Stocks above 50-day moving averages
And finally, trader/blogger/wise young man Charles Kirk’s recommended reading list for the day (shameless self-promotional plug, since we’re at the top of it).