Posted by: eminitrader March 2, 2007
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Before the market crashed in October 87, there was a 4-5% drop in the 3rd week of August and about 8-10% in the fourth week of August. The market rebounded in September and rallied for a month, it was never able to go past the previous high and finally it crashed in late October. Before the actual crash occured, there were few sell-off of 4-5% on a weekly basis.
Crashes do not come out of nowhere, there will be medium size sell-off where new buyers will come to the market. When they cannot take it any higher and market goes down, they will start looking for exits and the crash occurs.