This Monday October 29,2018 is the 89th Anniversary of the stock market crash of 1929, when investors in the stock lost market lost BILLIONS of Dollars in one single trading day.
What happened to cause the crash that day? Sheer panic,as prices never stopped plummeting all day. Those that were somehow in the know, had sold out earlier liquidating their stock positions in the weeks proceeding the crash.
What followed after the crash was the Great Depression, lasting years,and nearly bankrupting the economy of the United States.
Folklore is always fascinating to me, because if there's one thing you can count on time and time again, thru various boom or bust economic and social cycles, is that history does find a way of repeating itself.
In 2018, the economy in the US is strong, big business is reporting record earnings,interest rates are at historically low levels just as the stock market was recently at historic highs, making all those investors feel that much better.
So a nirvana moment in history again, just like the roaring 1920's, when everything seemed to be coming up golden.
However, just in the last month, perception has changed,... and changed markedly. Stocks have been marked down into a sharp correction mode, just after making all time highs, and after big money once again, as they do time after time uncannily exited the market, before the chaos was about to hit.
What did they know..and when did they know it ? What has changed so much in the last month ?
The answer is simple, in my beliefs. The stock market was,and still is grossly overvalued by historic measures. When greed is satisfied, the normal and logical thing to do,is to take the party elsewhere.
Which now leaves the rest of the common shareholders, and the interested public at large with a big question this weekend .
Has the stock market fallen enough, to begin to re-enter the market ?
Ask yourself the same question this weekend, by looking deep into the human persona, and look at your technically damaged stock charts as well
Monday Oct.29, 2018 will be upon us in a fortnight. The only question remaining is... Are you prepared...?
That's great !
I will make a point of looking a the evidence daily.
Thanks again.
DaddySawbucks
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Great post Unwind! I didn't hold any shorts over the weekend, there could be a relief rally Monday, however brief. Fascinating history;
The real loss came over three years from '29 - '32, when Dow lost 90%; from 391 -> 41. Returned it to 19th century values!
Fun from wiki:
"Despite all these economic trouble signs and the market breaks in March and May 1929, stocks resumed their advance in June and the gains continued almost unabated until early September 1929 (the Dow Jones average gained more than 20% between June and September). The market had been on a nine-year run that saw the Dow Jones Industrial Average increase in value tenfold, peaking at 381.17 on September 3, 1929"
"Selling intensified in mid-October. On October 24 ("Black Thursday"), the market lost 11 percent of its value at the opening bell on very heavy trading. The huge volume meant that the report of prices on the ticker tape in brokerage offices around the nation was hours late, so investors had no idea what most stocks were actually trading for at that moment, increasing panic. Several leading Wall Street bankers met to find a solution to the panic and chaos on the trading floor. They chose Richard Whitney, vice president of the Exchange, to act on their behalf.
With the bankers' financial resources behind him, Whitney placed a bid to purchase a large block of shares in U.S. Steel at a price well above the current market. As traders watched, Whitney then placed similar bids on other "blue chip" stocks. This tactic was similar to one that had ended the Panic of 1907. It succeeded in halting the slide. The Dow Jones Industrial Average recovered, closing with it down only 6.38 points for the day. The rally continued on Friday, October 25, and the half day session on Saturday the 26th but, unlike 1907, the respite was only temporary.
Over the weekend, the events were covered by the newspapers across the United States. On October 28, "Black Monday", more investors facing margin calls decided to get out of the market, and the slide continued with a record loss in the Dow for the day of 38.33 points, or 13%.
The next day, "Black Tuesday", October 29, 1929, about 16 million shares traded as the panic selling reached its peak. Some stocks actually had no buyers at any price that day ("air pockets"). The Dow lost an additional 30 points, or 12 percent. The volume of stocks traded on October 29, 1929, was a record that was not broken for nearly 40 years."
Great stuff, interesting thing I noticed today on the close, check the SPY volume on the last 5 minute candle, in that 5 minute candle alone, unless there was a glitch (I think is accurate the moves and algo type behavior the last v30 minutes wasn't normal)... Anyway the last 5 minute candle has a volume of 12.47 million shares, and the price dropped from 166.09 to a low of 164.47 I believe... We've seen distribution and high volume before in the last half hour at the close, but I haven't seen one like that on a 5 minute candle
The_Real_AMF
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@Jay6336, I noticed this as well and thought it was peculiar. Wonder what this means for monday.
The_Unwind
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@Jay6336,
Hi Jay.
Valuable information ! Distribution works exactly like that. Thank you for the observations.
Also I saw that SQQQ, Pro Shares 3 X SHORT NDX ETF, did a staggering 68 Million Shares traded on 10/26/18
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I put together a Fear and Greed index to rival the CNN one, here, you be interested to get your and @DaddySawbucks feedback
liberatedstocktrader.com/fear-and-greed-index/