Stock Market Crashes for Bearish Traders?

[frcrilly]

Hi All,

Throughout history, you often hear of stock market crashes for bullish traders (eg Wall Street Crash of 1929), characterised by having a major impact on the world’s economy & history and also characterised in severe cases by former speculators committing suicide.

My question is, has there ever been an equivalent shock stock market rally that suddenly wiped out a significant number of bearish traders??? (eg is there a “Great Wall Street Rally of 19XX”)

I have been thought that the stock market can typically crash 3 times faster than it can rise, as a general rule of thumb. What are experienced traders opinions on this???

Any information on the above, no matter how small, would be greatly appreciated. Thanks In Advance for all Responses.

 

[failed_trad3r]

2009 and 2010

 

[TheGoonior]

Quote from frcrilly:

Hi All,

Throughout history, you often hear of stock market crashes for bullish traders (eg Wall Street Crash of 1929), characterised by having a major impact on the world’s economy & history and also characterised in severe cases by former speculators committing suicide.

My question is, has there ever been an equivalent shock stock market rally that suddenly wiped out a significant number of bearish traders??? (eg is there a “Great Wall Street Rally of 19XX”)

I have been thought that the stock market can typically crash 3 times faster than it can rise, as a general rule of thumb. What are experienced traders opinions on this???

Any information on the above, no matter how small, would be greatly appreciated. Thanks In Advance for all Responses.

I'm sure the tech boom of the late 90's capped a few wallets before it popped, but I'm guessing that you are talking about more unexpected events over a short time period.
Here's a list of all large up/down days...not too many in recent years outside of one in 1987.

http://en.wikipedia.org/wiki/List_of_largest_daily_changes_in_the_Dow_Jones_Industrial_Average

I think the 1987 one was a surprise rate cut...could have had a bigger impact back then since we didn't have the internet, etc.

 

[logic_man]

Quote from frcrilly:

Hi All,

Throughout history, you often hear of stock market crashes for bullish traders (eg Wall Street Crash of 1929), characterised by having a major impact on the world’s economy & history and also characterised in severe cases by former speculators committing suicide.

My question is, has there ever been an equivalent shock stock market rally that suddenly wiped out a significant number of bearish traders??? (eg is there a “Great Wall Street Rally of 19XX”)

I have been thought that the stock market can typically crash 3 times faster than it can rise, as a general rule of thumb. What are experienced traders opinions on this???

Any information on the above, no matter how small, would be greatly appreciated. Thanks In Advance for all Responses.

I think that most of the largest one-day (or very short-term) rallies have actually been within bear markets, so unless the bears in question tried to press their bets too hard on those specific days, they shouldn't have been wiped out, since the market soon reversed and went back down.

 

[FrankSlaughtery]

julian robertson closed his hedge fund in in 99 or 2000 (you can look up the exact date) after famously losing a huge amount betting against the tech bubble. ironically enough the market burst less than a few months after he closed up. something about the market being irrational longer than you can stay solvent comes to mind.