The 1987 Crash

Hi everyone,

Exactly 30 years ago, 19–10–1987, WallStreet experienced its worse day since the previous Black Tuesday in 29–10–1927.

The Stock Market Crash of 1987 or “Black Monday” was the largest one-day market crash in history. The Dow lost 22.6% of its value or $500 billion dollars on October 19th 1987.

Extreme optimistic and risk ON with high greed of overflowing liquidity after Ronald Reagan’s tax reform in 1982 drove the markets to extreme levels until a chain reaction triggered by sell orders from computer programs to hedge from all the high long positions. At some point the market kept falling and falling and HedgeFunds started to dump their stocks resulting in this massive reaction of the markets.

The relative strength index of the DowJones reached the 86 level that was only hit twice, once in 1997 and once in the nineteen fifties where it reached a bit higher.
Sentiment is extremely bullish with a very high fear & greed index, similar to the ones just before the crash of 1987.
Nowadays computers have an even bigger share of the markets with the decentralization of trades by Dark Pools!

Remember the sayings of Warren Buffet.

Wish you all the best

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