Market Analyst: ‘We’ve Made Some Adjustments’ that Make Another Black Monday Unlikely

EXCERPT:

EISEN: “Welcome back to 'Worldwide Exchange'. Checking on futures, a little under pressure this morning pulling back from another record high we saw yesterday on Wall Street. Dow futures down 61 following some weakness in early market action in Europe. S&P futures are down 9 and NASDAQ down 30. Today is the 30th anniversary of Black Monday when global markets crashed. Over a very short period of time, the Dow fell 508 points, about 23 percent, which is still the biggest one-day percentage declined for the index ever. Joining us now with some perspective on the markets then and now, Jeff Hirsch, editor-in-chief of the 'Stock Trader’s Almanac'. Jeff, thank you for joining us. You're perfect guest."
HIRSCH: "My pleasure."
EISEN: "You've got all the stats here. So tell us how much of an anomaly that day was and whether it could happen again.”
HIRSCH: “It’s a pretty big anomaly, the biggest at the top there, but I’m not convinced that something of that nature can happen again. You know, back in ‘87 we were up so much more, 43 percent at the top for the Dow, in August, 39 percent for the S&P and about 30 percent for the NASDAQ. NASDAQ is a bit closer. But at a time in October, on the Friday before Black Monday, we were down 17.5 percent on the Dow. And what happened after that was all these circuit breakers, the plunge protection team became pretty robust we’ve seen other declines like that, we had a nasty bear market there in ‘07 and ‘09, but that was orderly. So I don’t think these one-day things are going to happen again, the flash crash taught us a few things. So we've made some adjustments, we've gotten smarter, everyone is more aware and I think that will prevent some kind of big one-day drop in the 20 percent range."