It takes a long time for a market recovery

This from our media partner Associated Press.
Monday, October 13, 2008

NEW YORK: It has taken Wall Street considerable time to recover from crashes and for investors to regain their confidence and decide it was safe to put their money into stocks again. A look at how the market recovered from its two best-known crashes, and how much it needs to recover from its latest plunge.

When the market crashed Oct. 19, 1987, sending the Dow Jones industrial average down 508 points to 1,738.34, the blue chips had lost 938 points, or 36.1 percent, since reaching a then-record close of 2,722.42 on Aug. 25, 1987. It took just over 15 months for the Dow to get back to its pre-crash level, and almost two years to the day — Aug. 24, 1989 — to reach a new closing high, 2,734.64.

_The recovery from the 1929 crash was more difficult — and spanned a quarter century. The Dow had reached a high of 381.17 on Sept. 1 and then began drifting downward. Although the date of Oct. 29, 1929, Black Tuesday, is probably best-known by the public, many market historians say the crash began on Thursday, Oct. 24, and accelerated the following Monday and Tuesday.

From its close of 305.85 on Oct. 23, the Dow tumbled 75.78, or 24.8 percent, by the time it ended at 230.07 on Black Tuesday. It continued its decline to a low of 198.69 on Nov. 13, giving it a drop of 107.16, or 35 percent.

That also made for a drop of 182.48, or 47.9 percent from the September high. But stocks kept on falling as the Great Depression wore on, and the Dow fell to 41.22 on July 8, 1932, giving it a loss of 339.95, or 89.2 percent from the September 1929 high.

The Dow did not close above 305.85 again until April 1, 1954, more than 24 years after the crash, and it didn't return to 381.17 until Nov. 23, 1954, a quarter century after Black Monday and Tuesday.

The Dow has a large percentage drop to regain this time. By Friday's close, the average had fallen 5,713 points, or 40.3 percent, from its record finish of 14,165.43 a year earlier, on Oct. 9, 2007. More recently, it fell 2,970, or 26 percent, from its close before the Sept. 15 collapse of Lehman Brothers Holdings Inc., the event that triggered the freeze-up in the credit markets and that sent stocks plunging.

With Monday's advance of 936.42, the Dow is still nearly 4,778, or 33.7 percent, below its record close.

6 Tips to Having a Productive Financial Morning Routine

Good Morning! I hope everyone actually got some sleep lastnight, as many people I talked to were very worried about 401k's, Money Markets, and the like. If you're trading with the trend, utilizing GOOD information, and following a plan then you should be ok! If you're still having issues, please take a look at the article below by Blain Reinkensmeyer from I asked him to talk about how he gets his morning routine put together for the day. Enjoy the post and trade well!


Every trader has a morning routing when it comes to preparing for the market day. Some traders are more intense than others because they have more at stake. Regardless of the size of your portfolio, here are some tips that can help get your morning started right.

1. Wake up before the market opens: The stock market opens every day at 9:30 AM EST and by waking up before you have time to prepare for any potential market surprises or simply set a strategy up for the day. Some traders wake up three hours before the opening bell, some three minutes; it is all based on your routine you develop.

2. Give the financial news a quick check: For me I simply head over to the INO News page or Yahoo finance and read the headlines. More often than not it gives me a quick glimpse of what the market itself is up to and any stocks that have big news. If you don’t like reading, than simply flip on CNBC and watch a few minutes.

3. Check the pre-markets: This is almost a must if you are a day trader because plays can come about pretty quickly. Personally I use the NASDAQ pre market indicator for attaining pre-market quotes. Pre-market trading occurs from 8:00 AM - 9:30 AM EST every day. For the simple trader, the whole purpose of this is to get an idea of what stocks if any are on the move early.

4. Give your portfolio a quick overview: Sign into your online stock broker account and just give your portfolio a look. This is a good opportunity to see if your positions moved the previous night alongside update any stop orders you may have.

5. Active Traders, setup your trading station before the market opens: This is really a “duh” for those that trade out of their homes, but I can honestly say I struggled at this when I used to day trade. I would try to wake up 5 minutes before the opening bell, gather news and get myself setup, and more often than not it doesn’t work. Get your computer running early so you are ready if need be.

6. Read the Paper: Papers such as the Investors Business Daily (IBD) and the Wall Street Journal are an outstanding way to get updated on what the market is up to.

Blain Reinkensmeyer