For the investor crowd, it really would be better to have a massive volume, blazing one day crash, than have to endure this Chinese water torture that does nothing to improve forward clarity. A 1987 style crash would shave off 2464 points from the Dow, 400 points from the Nasdaq and roughly 268 points from the S&P. If that happened, tell me there wouldn't be massive buying the 'day after?'
I'd rather look at 1974 as a possible scenario (a long steep waterfall sell-off) rather than 1987. Most people forget that 1987 happened after an insane +30% rally from January to ~August of 1987 took place.
agree, I think thats what this market needs, these slow 100-200 point drops are just pathetic on news that should be swinging this market 4-10% a day. I think the dow could easily drop back below 10k which would create a buying opportunity for many NEW investors.
If that happened, markets would still be liquidating afterwards, as there would be massive failures right and left, with all the leverage and leveraged participants, which would take time to sort-out, and effectively 'take-out' those that would be technically insolvent, even if it is only for a brief moment in time, as FCM's and prime brokers would be unwilling and or unable to carry their clients accounts while they're below margin requireemnts. That's the problem...the system can't handle it
I agree, times are completely different and one thing that is totally different is the leverage and derivates market. Tremendous growth in the derivatives market since the late 1990's will cause a freefall.
The derivatives market needs to be regulated this very second before there is another major financial crisis out on our hands, no one understands how big the derivative market is, they need to implement steps now, not when the system starts to unwind, RIGHT FU$KING NOW.
Overdue correction, yes. Crash, no. But it depends what you are waiting for, a correction or a crash. Still overvalued almost 40% right now.