Black Monday 35th Anniversary: Could the Market Crash Be Repeated?

Black Monday 35th Anniversary: Could the Market Crash Be Repeated? The memorable date of the most terrible day in the history of the stock market, many of us did not notice, and in vain. The stock market crash test remains a relevant example of the consequences of extreme volatility.On October 19, 1987, the Dow Jones Industrial Average (DJIA) fell 508 points (-23%) - a wave of insane selling swept through all the stock exchanges. The S&P 500 SPX lost over 20%. The global financial system barely survived such a catastrophe.Can this happen again? We hope not. There are two major differences between the situations of 1987 and 2022.Firstly, exchange trading is now automatically shut down in the event of a sharp loss of liquidity: the last time this happened was in March 2020, when stocks fell sharply at the beginning of the COVID-19 pandemic. The level of critical StopLoss is set by each exchange independently.Secondly, Black Monday did not appear by chance: after a rush of unjustified purchases, all stock indices began to decline synchronously three days before the critical moment.After the S&P 500 hit an all-time high at the opening of trading in 2022 on January 3, the index then steadily declined by an average of 3% per month. Modern speculators prefer to sell more evenly and there is no dangerous accumulation of volumes yet.However, the aggressive tightening of the Fed's policy in an attempt to curb high inflation has provoked a sharp increase in Treasury yields, which is very unnerving for the stock market. Panic-minded investors fear that the formation of the speculative PUT-option required for a similar stock market crash has already begun and the market should be ready to respond adequately.Are you ready?Profits to yall!