NO REASON

I remember reading an idea a few weeks ago describing the stock market crash in 1987, there was no real substantial reason at the time to explain the massive selloff, and the more people phoned around to try and establish what was causing it the more panicked people became when they couldn’t find a feasible reason.

 

The 2007 selloff came at the back end of a hugely inflated market based on valuation and sentiment (read: bullishness and lack of fear, via low premiums); but the market always placed the reason of the selloff on the subprime market, in fact almost everyone called it the subprime crisis, and only later did it become known as the GFC (global financial crisis).

 

Although there are many valid economic and technical market explanations for this selloff, the most recent 10 day selloff is essentially coming off the back of positive economic news, and therefore I suspect continued selling off the back of these headline numbers may be the source of a panic selloff in the weeks to come.