Stock Market Crash Stages (3)

On Thursday, October 24, 1929, an unprecedented wave of sell orders shook the New York Stock Exchange. The stock market crash of 1929, a major trauma that still haunts the national memory, has received surprisingly little attention from scholars in seventy years and has produced even less agreement as to its causes and consequences. However, the benefits of using an indicator like this is that you miss out on the worst of the stock market’s declines. The Securities and Exchange Commission was set up to regulate the functioning of the stock market and other bonds and commissions. This quick and precipitous decline in stocks’ value in October 1929 became known as the Stock Market Crash of 1929. Naturally, the working class saw the stock market as the fastest and best way to grow their money.Stock Market CrashStock Market Crash

But using a model based on those assumptions, you can develop a method for stock market prediction that is better than flipping a coin. A stock split is required if the market value of a share has grown too large, rendering the marketability insufficient. One of the consequences of the 1987 Crash was the introduction of the circuit breaker or trading curb on the NYSE. Shorting the stock means that you are selling a stock in the hopes that that stock will go down, and when it does go down you can buy that stock and pocket the difference. All market economies oscillate, with 4-7 year business cycles, with longer cycles of construction and commodity production, and with fifty-or-so-year long waves that bring, among other things, major financial panics.

There is no numerically specific definition of a crash but the term commonly applies to steep double-digit percentage losses in a stock market index over a period of several days. October 24 (known as Black Thursday) was the first in a number of increasingly shocking market drops. We are told, over and over, that the free market is a sort of natural wonder that guides the economy without need for government interference. Generally, the economy was booming and it’s reflected in massive new investments in the share market.Stock Market Crash

To take closer look at the current sentiment on the stock market as well as to define the general market tendency I decided to take closer look at higher-time frame chart in particular on 2-year DJI chart. The history of the stock market did not see such extremely huge panic selling ever before. Altogether, between September 1929 and June 1932, the nation’s stock exchanges lost $179 billion in value. For example, following this strategy and exiting once the VIX crosses 25, you would have moved to cash on September 12, 2008 – just ahead of a 45% stock market plunge.

This panic led to the frantic selling of shares, snowballing into the biggest market crash in all time. By the late 1970s the world’s linked market economies had built themselves up to a point of tremendous surplus. The days and months that followed had brief periods where the market rose during trading. They use tools like technical analysis based on the past price movements and trading volume to determine the probability of the market moving in one direction. Scores of people started gathering around the stock exchange to watch the change in prices to keep track of the situation.