Today is the anniversary of Black Monday, 1987. However, despite countless traders getting spooked over the weekend by suggestions of a repeat performance, today is completely different.
For example, index futures pricing late yesterday evening indicated mildly higher prices for Dow contracts up 0.1% — a far cry from the Dow’s 22.6% plunge on October 19, 1987.
Despite little to no pricing evidence of an impending market crash, traders seemed to latch onto the idea of a bear market in AI stocks, enamored with a viral essay about a “stealth” bear market supposedly festering within otherwise bullish indices like the S&P 500.
Market commentators posted calls for a Black Monday, racking up millions of combined views.
WARNING: TOMORROW WILL BE THE WORST BLACK MONDAY IN HISTORY!!
98% of people will lose everything.
Markets have officially entered panic mode.
For the first time EVER, something just broke in the economy.
If you hold any assets today, you MUST read this before October 19:… pic.twitter.com/NiF94whKJP
In contrast to 1987, today’s market isn’t already in freefall. In August 1987, the Dow peaked at 2,722 and had lost about 17.5% by the Friday close before the crash.
Today’s Dow, however, is within 4.5% of its all-time high. The S&P 500 is similarly within 2% of a record high today.
The pace of declines prior to today is also bad news for doomsayers who think today will end in catastrophe.
In 1987, the Dow had already crashed more than 10% during the three sessions prior to Black Monday, whereas today’s S&P 500 hasn’t been crashing at all prior to two trading days ago.
Source link
