Shades of 1987

Wasn’t it August of 1987 when the markets were stretched to extremes?

Then bonds headed lower … with rates going higher?

We know what happened after that.

Back then, the market peaked, retraced and then tried to make a new high which failed.

It was the failed move that set things into motion.

Then it was fast and volatile in the days leading up to Monday, October 19th. Markets do not repeat exactly but they do alternate.

So maybe it’s not August now, but February, March or April?

Getting back to October 1987. The late Dr. Martin Zweig discussed the possibility of a Monday crash during Louis Rukeyser’s Wall Street Week: Time Stamp 6:50 – 9:00.

While his assessment was important, perhaps more important was the rosy market forecast by the sell-side (retail) analyst (time stamp 8:37, link above).

That response to Zweig didn’t age well did it?

Three days later at the open, the market vaporized

Is truth more important than fairy tales? This site is about presenting objective analysis along with potential outcomes.

It’s likely we’re an order of magnitude greater than ’87. There’s no argument markets are stretched to obscene levels.

Now, we have interest rates rising sharply.

Will the result be the same? In the markets, anything can happen. However, if enough time has passed to forget (or be ignorant) about the past, it’s possible that it’s time to repeat.

Stay Tuned

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

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