In every "crash" I can think of the trend was already negative, e.g. 87, 97 even 9-11 (who knew?? ) The killer will be the unexpected event ala dirty bomb, etc that hits when markets are on the upswing and there is no forewarning. Except, of course, for Cheney & Co. The only way to avoid this is to be hedged at all times.
Crashes tend to come after parabolic rises. It is almost as if the overconfidence and euphoria from the bulls serves as fuel for the decline. The more they go up, the harder they fall. The market has gone up solidly since last summer, but I would hardly call it euphoria. I can see a garden variety 10-20% bear market caused by a weaker economy, but not an '87 crash.
What caused the "87 crash??? What steps have now been installed to address that type of trading??? It will be interesting to see if anyone really knows about the actual inter-workings of the exchanges.... SteveD
Uh, circuit breakers. Read all about it. I asked the question at the beginning of the year if we would trigger breakers this year. Now that N. Korea is scared shitless and contained I think any confrontation with Iran will result in breakers being hit. They have the assets in place to shut down the straights in a minute and they will. Grinding halt to the global econemy. I presently put the probabilities at 75% by the end of the year. Hope I am wrong.
Take a look at longterm interest rates the few months before the 87 crash. The answer is somewhat clear