87 headlines

Discussion in 'Trading' started by dtrader98, Jul 31, 2007.

  1. Interesting quote I pulled off the internet.

    "In a market like this, every story is a positive one. Any news is good news. It's pretty much taken for granted now that the market is going to go up." - Wall Street Journal, 8/26/87, the day after the 1987 market peak

    This is VERY different from today's environment. Headlines today would read more like, "In a market like this, every negative story is spun as a positive one. No one can believe that the market is going up."

    The fact that joe investor sentiment is so different is what is causing shorts to pile on like there's no tomorrow. A few wise observers have noted that the market will try to screw the most participants most of the time. In this case the majority are bearish right now.
  2. Fair enough, but how do you know that the majority are bearish right now?
  3. The situation is very different to 87 as the market was rallying the same time interest rates were on the risewhich is simply not the case here
  4. Yea it it time to go long
  5. a guy i used to know in the options market at one of the floors in chicago on the day of the crash cleaned up.

    made a fortune.

    he said a few days later he drove a porsche 911 with a number plate that had the date of the crash on.

    as he drove into the exchange car park there were guys walking in with very miserable faces to pay the margin money and square up their accounts that were down a fortune.

    none of them believed it was going to happen.

    and more importantly no one had every heard of a flight to quality before.
  6. Quiet1


    I've said before elsewhere I went back to read magazines from 1987 to see what the actual sentiment looked like. I read the Investors Chronicle (which is the nearest thing the UK has to Barrons).

    All during the summer/autumn of that year sentiment in the tone and subject matter of many if not most of the opinion articles was BEARISH and included talk of an outright crash.

    Bearish talk these days is a bit different, especially in the US, it being linked to "end of empire" angst.
  7. Nice thread. I've been short for a few weeks and the proliferation of negative sentiment has been of great concern to me.

    My take: Both in '87 and in 2000 there were a decent number of bears walking around. As long as you have a few hard rallies here and there you'll keep those guy's (myself included) from letting the market get over sold. Short covering rallies are to be sold.