OptionStrategist.com's Lawrence G. McMillan made an interesting observation. Most people don’t realize that the Crash of 1929 and the Crash of 1987 both occurred exactly 55 calendar days after the stock market had topped. All prices in this article are closing prices on the day being referenced.
1929: the peak in the Dow was reached on Sept. 3, when it closed at 381.17. 55 calendar days after Sept. 3 was Monday, Oct. 28. That was the exact date of the Crash of 1929, with the Dow down 40.58 points, or 13.5%.
1987: the Dow topped out at 2722.42 on Aug. 25. 55 calendar days later was Monday, Oct. 19, when the Dow collapsed 507.99 points, or 22.6% in one day.
This year, the Dow topped out on Jan. 4, and 55 days later is Monday, Feb. 28.
In both 1929 and 1987, there was a sharp market decline in the week preceding the Crash, so that is something else to watch for. These crashes just didn’t appear out of thin air.
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