Dow Jones Industrial Average 1987 and 2007

[Cruzan]

[OlderButWiser]

1. Wow...

...just wow.

[whistle]

2. Wow, almost like an EKG for heart patients with advanced cardiomyopathy

....except the next attack could result in flat lining :yoiks:

[DemocratSinceBirth]

4. I Don't Get It

The Dow was at 2,700 or so and now it's 13,000 or so...

There have been gyrations due to economic and political events...

[whistle]

12. Look at the trend line and patterns in the lines for each period, they match

...now look at the 1980's secular trend line approaches the period during which it crashed in Oct'87. What the Fed has been doing during the past three weeks was what they avoided until the crash went into a full panic.

The current Fed Chairman Ben Bernanke has pumped over $130 billion in new money into the big financial institutions plus dropped the discount rate by a half point and the trend did not even tick up in the market. So the question remains now what will happen in the market during the coming months? Panic? Crash? Meltdown?

[Warpy]

5. Looks more like "tombstones,"

and that means if you're not wheeling the patient into the cath lab as soon as you see it, he's dead meat.

[Subdivisions]

3. If I'm reading this right, that is waaayyyy eerie. And it

confirms rumors of late, base on huge put options in the SPY market over the past couple weeks, that a major crash will happen in under 3 weeks and, by now, acutally just over 2 weeks.

Anyone that's knowledgeable in this have a comment?

[Selatius]

6. The pattern seems to suggest people buy stocks more often in the summer.

Maybe because most new products are introduced only after August, so people have more money to spend on stocks. Beyond that, I'm not willing to assume much, except to say something scared the crap out of people in 1987. A massive terrorist attack on US soil would do the same thing.

[alfredo]

8. There was a lot of hostile takeovers, and a lot of debt associated

with those buyouts. There was little or no regulation, and people were getting really greedy. There was a lot of dirty dealing, a lot of irrational optimism that quickly turned to panic when the bottom started falling out.

[A HERETIC I AM]

10. The options on the "SPY" ETF that were talked about were Calls, not Puts

There have been several threads on various forums talking about that activity of late.

Much of it misses one major aspect - that it is a normal, predictable "Spread" put in place by one or more money managers using market volatility to their advantage.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x27652

[Cruzan]

7. Also on my reading list

[SidDithers]

9. There are trading limits in place now...

that weren't there in '87, that would prevent a drop like the one seen then.
(I think, I'm sure there are economists or traders here that would know better than I)

Sid

[Cruzan]

11. Circuit breakers

http://www.nyse.com/press/circuit_breakers.html

[Duer 157099]

13. What do 1986 vs 2006 look like?

Just out of curiosity -- is there a 20-year repeat pattern? Or are these two years (1987, 2007) a uniquely matched pair?

[gulliver]

14. Interesting, but meaningless, IMO

The hypothesis seems to be that the match in the two data series above (not really that great a match actually) implies Black Monday II is coming. But to prove that or even infer that as a reasonable possibility, you would have to show that other data series similarly scaled match as well or better and also lead to a Black Monday-like drop-off. The overlap of the 7's in 07 and 87 is only numerologically spooky.

Also, you left off last week, so the pink graph would actually be spiking up at the end while the black graph spikes down.

[hfojvt]

18. they don't match that well

and I wonder about the scales too. They are not on the same scale. Is it proportional scale, or was it rigged to make the two years look similar?

[BlooInBloo]

15. It could be something, or it could be seasonality.

[Gman]

16. It's like we're looking off the edge of a cliff

that's about to crumble beneath us.

[Warren DeMontague]

17. And if you bought immediately after the crash in 87 & held it for 20 years

You're making out like a fucking bandit right now.

Just sayin'.

[tom_paine]

19. No question that is the truth

However, Amerika 2007 is a considerably less free and more bankrupt nation, in so many ways, than America 1987.

Just sayin'.

:hi:

[Warren DeMontague]

20. No doubt. But this thread is about the Dow Jones.

I think we have enough very real things to worry about without some of the continual sky-is-falling threads we get around here sometimes.