Dear Money & Crisis Reader, Yesterday I outlined THE single most important development you need to see, in order for the market to crash. Think of them as BIG warnings, or the FOUR Horsemen that precede a stock market apocalypse. What are they? When most heavily weighted companies began to break down badly. Technically, the S&P 500 is made up of 500 companies. However, each of those 500 stocks don’t receive the same weight from the index. Rather, certain stocks receive a disproportionate weighting giving them a much larger impact on the market’s price action. Because of this, in order to get a crash, you need the heaviest weighted stocks to break down badly. Put another way, even if most of the 500 companies in the overall market are in a downtrend, if the heaviest weighted stocks DON’T break down, it’s pretty much impossible for the overall market to crash. So today, let’s review the 1987-Crash: arguably the worst single-day collapse in stock market history. In 1987, the 10 largest companies by market weight were: EXXON | XOM | GE | GE | Royal Dutch Petrol (Shell) | RDS/A | AT&T | T | Merck | MRK | duPont | DD | Phillip Morris | PM | Ford Motor | F | General Motors | GM | Of these, IBM, XOM, GE and T have charts that are easy to find. So, let’s review them. |
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