> Investigations after the October 19, 1987 crash revealed that what would have > been a normal down day in a correction that had begun in August was turned > into the heart-stopping, portfolio destroying 1987 crash by uncontrolled > automated waves of sell-programs that flooded in from program-trading firms > and overwhelmed the market. As their ‘portfolio insurance’ protective stops > were successively hit the automated sell orders came so fast on top of each > other at ever lower prices that market-makers could not match them up with > buyers. Very quickly there were no buyers anyway, and the decline just > plunged into a dark bottomless hole.
This was the beginning of programmed trading. At the insurance company where I worked the investment department was not even affected but I heard Morgan Stanley was taken on a ride by their new program trading software. Natural disasters like what happened with the earthquake in Japan you mention are not predicted but even a tweet from Trump can perturb the market or as what happened in 1981: > The selling spree was set off by Joe Granville's January 1981 newsletter, > which advised investors to "sell everything". It was later described by > Business Week magazine as "a mindless wave of selling that destroyed billions > of dollars in stock value from a forecaster who drops his pants in public to > get attention." Donna Y [email protected] > On Aug 9, 2019, at 7:09 PM, Jose Mario Quintana > <[email protected]> wrote: > > Regarding Black Monday, apparently, the ones who knew better did not have > enough conviction to short the S&P500 in any considerable amount before the > event occurred. ---------------------------------------------------------------------- For information about J forums see http://www.jsoftware.com/forums.htm
