The IPO Buzz: Bears Gone Wild

So far, Friday, Oct. 10 is the significant date.
In the wild storms roiling the stock market in October, no companies have gone public. Nor have there been any filings. IPOs and their bankers know it’s not smart to play chicken with the bears.
The Dow’s Swings
Friday, Oct. 10, was the day the DJIA sold off to the year’s intraday low of 7,773.71, according to Yahoo Finance (see: Data). The DJIA was DOWN 1,749.06 points or 18.4 percent from 9,522.77, the previous day’s intraday high and DOWN 3,070.98 points, or 28.3 percent, from 10,844.69, the intraday high set on the previous Friday, Oct. 3.
Remember, the bear walks into the stock market when it’s down 20 percent retreat from its previous high.
The Volume
On Friday, Oct. 10, the New York Stock Exchange soared to a record high volume of 11.5 billion shares. That was almost double the volume on Friday, Oct. 24, of 6.55 billion shares.
Let’s look back at the last stock market crash in October 1987.
Revisiting Black Monday in 1987
On Monday, Oct. 19, 1987, the DJIA closed at 1,738.41, its closing low for the year, and DOWN 508.32 points or 22.6 percent, from 2,246.73, its previous close on Friday, Oct. 16.
The NYSE volume of Oct. 19, 1987, was a then-record 604.3 million shares. The previous record volume was 302.4 million shares on Jan. 23, 1987.
From that low point, the DJIA traded in a 300-point intraday range until Friday, Dec. 3, when it hit an intraday low of 1,772.10, and then never looked back.
The stock market had been in a steep sell-off since Tuesday, Oct. 13, 1987, when the DJIA closed at 2,508.16. Looking back, Oct. 19 could be called a “selling climax” – a steep decline accompanied with a record volume.
Fast forward 21 years to Oct. 24, 2008:
When the bears went wild on Friday, the NYSE lacked record volume and the DJIA failed to hi a new intraday low.
Maybe the bears have already given us the “selling climax” on Oct. 10? We’ll find out soon enough.