Most people think the stock market is just numbers on a screen.
Things go up, things go down but they eventually balance out.
Sometimes the market doesn’t correct; it collapses and when it does it’s fast, it’s brutal and it’s permanent for those that aren’t ready.
Let’s review 7 modern crashes starting with the single worst day in Wall Street history. October 19, 1987, Black Monday.
The DJIA dove 508 points in a single session a loss of 22.6%.
In today’s market that would be like the DJIA dropping 10,,000 points!
The stock market had soared 40% in the first 8 months of 1987.
A new financial innovation called Portfolio Insurance was being used by major institutions.
They were pure algorithms used to sell futures when stocks dropped—supposedly to protect against losses.
As so happens in the market the safety net became a trap entangling market participants.
The “insurance” burnt the house down. it became a vicious feedback loop, a self-fulfilling crash.
Is it possible some players intentionally manipulated the market triggering the Algomatics?
The goal—to force the Fed to intervene. It worked.
Or was it man or cycles?
Whatever the case, big players who shorted before the crash and bought after made a killing.
The next crash had geopolitical roots,
It was July 1990.
The market started to fall slowly then abruptly. By October it was down 20%.
It was roughly 60 years from the 1929 crash.
The “cause”, war and oil or cycles?
Be that as it may the market sniffed out the downturn topping two weeks before on July 13, 1990.
The next crash is the Dot.Com Bubble.
Millionaires were made overnight especially heads internet companies that IPO’d…and lost their fortunes just as fast.
Between 1995 and 2000 the NAZ grew over 400%.
By March 10, 2000 it hit 5048.
Interestingly 9 years later on March 6, 2009 a market crash bottomed.
The Fed concerned about inflation had raised interest rates 6 times in 18 months.
And the question investors should have asked years earlier “was any of this profitable” was too late to ask.
As reality set in the NAZ collapsed by over 78% by 2002.
Over $8 trillion in paper wealth vanished.
It wasn’t just a bubble it was a Pump and Dump of worthless companies executed by Wall St.
It aligned with cycles.
From 1930 (using late 1929 as the top) adding a Gann 69 years gives 1999.
The first quarter of 2000 was the graceful exit. The DJIA topped in January, 2000.
It seems eerily similar to what’s going on right now with Cyrpto and AI startups.
Then there is 2008.
2008 wasn’t just a crash. It was a near death experience for the global financial system.
This is the reason “they” kept interest rates so low, for so low.
But it has perpetuated another bubble.
We are up 16 years from 2009 versus the 8 years of the Roaring Twenties Bull Run.
It didn’t just “happen”.
For years banks had been handing out mortgages to anyone who could fog a mirror: no income, no assets, no documentation—so-called Ninja Loans.
Why? Because they didn’t care if the borrower defaulted.
These risky loans were bundled into “mortgage backed securities” and sold as triple A rated investments.
Insurance companies, major brokerage firms. Global pension funds, sovereign
n wealth funds,—everyone wanted them…until the defaults started.
In sum the entire financial system was leveraged to the teeth.
The SPX fell 57% from its 2007 peak.
Wall Street Insiders knew the loans were garbage and bet against them at the same time they were selling them to clients.
The more-than-theory is that the Housing Bubble was a financial weapon intentionally created to
1) Inflate asset prices
2) Trigger a controlled crash
3) Justify central bank intervention
4) Consolidate economic power
February 2020, markets were at all-time highs
The economy looked unstoppable.
Then along came a virus from China.
In March the market plummets.
This was the fastest crash in history.
The SPX 500 dropped 34% in 33 days.
Oil prices went negative for the first time in history.
The Fed and Treasury responded by injection $7 Trillion in liquidity.
Direct checks to citizens.
While the public panicked, insiders were buying.
Some believe Covid was the perfect crisis for Central Planners.
There was a Repo Crisis in late 2019 that some believe got solved by Covid Crash Liquidity.
A targeted liquidity reset.
The market hit new highs months later.
Once the retail crowd got too powerful, meme stocks, NFT’s…the plug was pulled.
FOMO in MOFO out.
Then we have February to April 2025 Tariff Tantrum.
The SPX loses 30% in 7 weeks.
Crypto implodes.
Fear of inflation …but wait, I thought Crypto was supposed to protect against inflation?
Yesterday we got a bad inflation report and Crypto nose-dived.
Bitcoin left a large Range Key Reversal Day from an all time high of 125,200
Closing at 118,415.
It will leave a WEEKLY Soup Nazi sell today.
360 degrees down from yesterday’s high is 84,000 which ties to its April monthly closing low.
So Bitcoin reverse 360 degrees from the April MONTHLY closing high.
Amazing
Market crashes are cyclical but they are also the perfect excuse to control..
One undeniable truth between all crashes. Markets are not random. They are not chaotic if you familiarize yourself with how they are ‘ordered’.
The powers that be know cycles and can engineer fear, leverage and liquidity moves the world.
Every crash is a moment of transfer from the emotional to the prepared, from the many to the few.
You have to ask yourself, who’s buying while most are in panicking?
When the market is euphoric there the stage is being set.
When people see no end in sight, cycles have a way of being able to capitalize on everything.
Before a crash the same patterns show up.
The same Time/Price synergies show up before the fall.
To understand what’s coming next we have to look back.
While every crash looks different on the surface the psychology behind then hasn’t changed.
I recall in September 1987 a month before the crash, the vast majority of the leaders that year were skidding.
In recent days many momentum monsters have imploded.
Names include FN, COHR, DASH and SNOW.
After the bell SNDK, LRCX, AMAT and KLAC all got hit.
These names exemplify the underlying weakness as the major indexes finished little changed on the day.
Beneath the surface, breadth was abysmal with 127 net declines on the NYSE and 1646 net declines on the NAZ.
This extreme breadth deterioration drove the shapes single-day drop in the McClellan Oscillator in more than a month, plunging 30.86 points to close at just 2.
The reading in the McClellan Oscillator underscores a significant contraction in participation and momentum…despite the flat headline numbers.
The weakness followed a hotter than expected PPI report showing a 0.9% rise for July…reinforcing concerns that tariffs rapidly drive up the costs at the wholesale level.
The disconnect between the narrow resilience of the large cap indexes and the widespread selling across the market a rising risk of a more pronounced downside break.