I am going to attempt to write an article on the stock market crash of 1929. However, not all was lost: a rally that started when Richard Whitey, then head of the New York Stock Exchange, calmly began buying shares of U.S. Steel and other companies. To sum up, if you want to be profitable in the market, you must adapt fast to changes because the market is so dynamic. To put it simply, the Stock Market is really people, humans who are either a buyer or seller and controlled by emotions. The conventional assumption that stock markets behave according to a random Gaussian or normal distribution is incorrect.
Humanity is being confronted with the same problems as those at the end of the second industrial revolution such as decreasing stock exchange rates, highly increasing unemployment, towering debts of companies and governments and bad financial positions of banks.
When we see the big number of shares (big volume) is changing hands during the crash it tell us that the number of panic sellers is dramatically reduced (their demands are satisfied – they sold) which may lead to the shift in the supply/demands balance.
The extreme rise in the Dow Jones in the period 1920 – 1929 and especially between 1927 – 1929, was primarily caused because the expected value of the shares of companies that are in the acceleration phase of their existence, was increasing enormously.
In 2008, the failure of some financial institutions in the United States lead to a global crisis that resulted in the failures of some European banks and sharp declines in the global stock market. That’s because when the stock market started falling, brokers suddenly called in their loans.