Is A 1987-Like Crash Imminent?

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October 23, 2018 7:06am NYSE:IVV

From Chris Ciovacco: The 1987 stock market crash occurred on Monday, October 19. The week before was marked by high fear and heavy selling, with the S&P 500 shedding 9.12% between Monday, October 12, and Friday, October 16, 1987.


short-takes-ciovacco-1987-crash.png

2018: LAST WEEK

Over the past five sessions in 2018 the S&P 500 gained 0.02%.

1987: KEY SUPPORT

On Friday, October 16, 1987, the S&P 500 was putting pressure on a key support level that was formed during a recent multi-month consolidation period.

short-takes-ciovacco-1987-crashbc.png

2018: KEY SUPPORT

Unlike the pre-Black-Monday close, the close on Friday, October 19, 2018 was well above a key area of possible support.

short-takes-ciovacco-1987-crashbd.png

Why is the chart above relevant? Because in 1987, the market was in somewhat of a “make or break” posture before the 1987 crash. The present day market has numerous forms of possible support below price as outlined in detail on October 15. Therefore, the 2018 market has secondary forms of possible support above and below the key area of possible support (see chart below).

short-takes-ciovacco-1987-crashbe.png

MORE DETAILS: 1987 VS. 2018

The opening segment of this week’s CCM stock market video takes the 1987 vs. 2018 comparison to another level of factual detail. The video also covers a key signal that has only occurred three times since 1934, comparisons to the 2000/2007 peaks, and reasons to keep an open mind about the stock market forming a bottom in the next 1-2 weeks.


The iShares S&P 500 Index ETF (IVV) fell $4.36 (-1.57%) in premarket trading Tuesday. Year-to-date, IVV has gained 3.58%.

IVV currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #2 of 152 ETFs in the Large Cap Blend ETFs category.


This article is brought to you courtesy of Ciovacco Capital.


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