On October 19, 1987, the Dow Jones Industrial Average fell 22.6%, a record based on a percentage sell-off in the market’s history. It plunged 508 points to 1,738. A similar drop today would shave 8,000 points off the DJIA.
The early market carnage in 1987 looked something like this last Thursday and Friday. The Dow sold off 2.4% on the Thursday before Black Monday and 4.6% on Friday. (The drop began Wednesday, as the Dow fell 3.8% that day.)
The effort to sell stocks on Monday, October 19, was so extreme that 11 stocks in the DJIA opened late, and 95 stocks in the S&P 500 did the same.
It can’t happen in a single day thanks to circuit breakers put in place (in 1988 because of that crash) to stop trading briefly or for the rest of the day depending on the percentage drop. It can come close though (20% stops all trading), and I don’t doubt we’ll see the first two levels hit (7% and 13%). Plus there’s five days in a week, and this isn’t going away.
Last week one of the indexes dropped 6%. 1% more would have it a breaker.
Jim Cramer observed
Title had me worried for a sec, as soon as I saw this I knew we’ll be alright.
Until you said this and now he’ll have his broken clock moment
