r/stocks • u/Chrissylumpy21 • 2d ago

Crystal Ball Post Is Black Monday Incoming?

So much fear in the markets and this time really feels different. All the Mag7 stocks are so hit by the tariffs our iPhones will probably cost $5,000 soon and as the world slows, people will use Amazon less, advertise less on FB/IG. No one is buying Tesla anymore. Who needs anymore AI chips, yet AI is decreasing Google searches.

I fear the world is realizing it all this weekend. Or is it just me that sky appears to be falling?

2.0k Upvotes

87% Upvoted

1.1k comments sorted by

View all comments

Show parent comments

24

u/futurespacecadet 2d ago

it felt like today was the blow off top tbh, -6% move?? after another -5% day?

60

u/skimcpip 2d ago

Said on Black Friday before black Monday, 1987.

100

u/futurespacecadet 2d ago

looked into the possibility of Orange Monday, and according to Claude AI:

The week before Black Monday showed significant weakness:

  • Wednesday, October 14: Market fell 3.8%
  • Thursday, October 15: Another drop of 2.4%
  • Friday, October 16: Down another 4.6%

This meant the market had already declined nearly 11% in just the three trading days before Black Monday's catastrophic 22.6% single-day crash.

Several market conditions resembled what you're describing now:

  • Rising interest rates and inflation concerns
  • International tensions (particularly with trading partners)
  • A sharp spike in the VIX (though it wasn't called that then) in the days before the crash
  • Computerized trading programs (portfolio insurance) accelerating selling

One notable difference: The 1987 crash occurred during a fundamentally strong economy, similar to today's situation where economic data remains mixed rather than universally negative despite market fears.

The pattern of accelerating declines leading to a climactic selling day has repeated in many major market corrections, though rarely with the single-day severity of 1987. This historical perspective reinforces the value of patience and avoiding reactive decisions during periods of extreme volatility.

20

u/BowlAcademic9278 2d ago

How do we get the mods to pin the above comment?

14

u/craaazygraaace 2d ago

I don't know anything about stocks and never come to this sub, but I'm updooting for "Orange Monday"