It has been ugly in the markets this year.
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In fact, through 10 days of trading, the markets saw the worst start to a year ever. And the pain keeps on coming. In early trading Wednesday, the Dow was down another points. But the recent drama in the stock market has not been the most unnerving thing here.
That would instead be the fact that January's stock volatility has come after stocks zigzagged dramatically in August , September , and October. People who are invested in the stock market might not want to hear this , but this crazy, multimonth-long volatility is pretty similar to what we see in the middle of a stock market crash.
The fact it has only a small chance of happening does not mean that it's not worth acknowledging. But, actually, when stock bubbles come to a head, they tend to make wild swings in both directions.
In other words, they don't just suddenly burst — it's more of a drawn-out, up-and-down process. In a note to clients , UBS strategist Julian Emanuel zoomed in on the stock market action during the previous two major market peaks to illustrate this important observation.
We should point out that Emanuel's charts are over a slightly longer time frame: It is perhaps most important to emphasize that these three charts do not predict a crash. Rather, it's merely a reminder that the volatility in the markets over the past half-year is not without precedent.
After all, it is extremely difficult for investors and economists to tell whether the market is in a bubble and, if it is, whether that bubble is bursting. But given the recent volatility, one can't help wondering whether the stock market is crashing.
It will be a while, however, before we can confirm whether that's actually happening. Here Are The 3 Conditions You Should Set Before Taking Any Advice. More From Business Insider. So be it, senor. The US should withdraw from the corrupt, criminal UN altogether and stop funding it.
Markets close in 3 hrs 38 mins. Stocks to Watch Target hit with a downgrade, Sears sinks, FedEx up on beat. This is what a stock market crash looks like. Business Insider January 20, Screen Shot 01 20 at 7.
How market crashes happen
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