IPO Market Slowdowns Preceded All 4 Major Crashes Over Past 15 Years

A stock marketing crash is a sudden sharp drop in stock prices across a majority of the stock market. I keep hearing all these wolf calls, about a horrific crash coming, in the next month or so. So basically one of my business partners got on the phone with me and I showed him a chart, and a very interesting one, to prove that there is little chance the stock market is going to crash in the next month or so. YES!Stock Market Crash

As of today, August 2016, I feel there is something wrong with most of the stocks traded in the US. It is possible that many popular stocks are overpriced, and when they will crash, this may lead to a general panic that may put in danger the stock indexes.Stock Market Crash

However, the one-day crash of Black Monday , October 19, 1987, when the Dow Jones Industrial Average fell 22.6%, was worse in percentage terms than any single day of the 1929 crash (although the combined 25% decline of October 28-29, 1929 was larger than October 19, 1987, and remains the worst two-day decline ever).

Now, I want to call your attention to the performance of the ^SP600 small-cap stocks: (1) This index was a strong relative performer since the bottom of the market was made in February-March because it was probably manipulated higher by the high frequency traders such as Goldman Sacks and other major traders, with Citadel being the biggest of them all.Stock Market Crash

Xavier Gabaix, a finance professor at New York University, has derived a crash-frequency formula that he believes captures a universal trait of all markets, not just equity markets or those in the U.S. According to that formula, the odds of a 12.8% crash in any given six-month period are 0.92%, almost as low as the actual frequency in the U.S. stock market over the last century.