History Of The Roaring Twenties

While the risk of a crash is not zero, you’re almost certainly more worried about a crash than is justified. During the last 16 trading days, the market traded in a narrow range with a downward bias: (1) The daily volumes (second panel) approximated their daily norms while (2) the daily price changes (top panel) usually showed gains or losses that were about half of their norms.Stock Market Crash

Globally, the 2014 slower economic growth in Europe and China took capacity planners and market makers by surprise; the developed world’s drive to decrease carbon emissions is finally having an impact on the oil market through greater energy efficiency.

Expect a temporary bubble in 2012 driving prices higher than the most recent 12,800 market high, possibly setting a new all time high in what will be an obviously unhealthy, somewhat uneasy irrational 1929-like blowoff, followed by an equally unnatural 2013+ relentless collapse to at or about Dow 1,500 (probably a 5 year+ outlook).

One of the worst effects of the 1929 stock market crash prior to the Great Depression was the failure of multiple banks that had loaned money to speculators but could not collect when the stocks they invested in became worthless. And in stock investing, earnings growth does matter, especially during recession.Stock Market Crash

Of course, I am not saying we CAN’T crash…and I can be wrong, I am just using charts I have always used, that have proven to be very accurate over and over again. Billions of dollars were lost, wiping out thousands of investors, and stock tickers ran hours behind because the machinery could not handle the tremendous volume of trading. This was the worst stock market crash that affected global economics because this crash lasted longer than the short plummeting that had occurred in 1987. No one will be able to time the market perfectly (buy at the low and sell at the peak), not even Warren Buffet does that. After the crash the New York Stock Exchange then implemented rules to limit the amount that a broker can lend to an investor on margin. The panic began again on Black Monday (October 28), with the market closing down 12.8 percent.Stock Market Crash