October 19th, 1987 The Stock Market dropped a staggering 22% in one day. This occurred on a Monday and is also referred to as the Black Swan. The movements in the market that day were equivalent to how trading would have looked over the course of a whole year. I interviewed a trader that was on the floor this day. He said that people passed out on the floor during trading.

Fast forward to today after the massive credit crisis followed by an enormous run up in stocks. There has been an influx of positive news reports the last 3 months with hardly any negative ones. Today was one of the few negative reports to hit the wire with consumer confidence faltering. The market just took a drop of 250 points following the day GDP increased 3.5%. The potential for a shocking drop should not be taken for granted. The market is frothy at these levels, and if the negative reports come rolling back in the markets have much further to fall now than they did back in March. Couple this with Gas prices currently at all time highs I would caution anyone thinking of getting long at this point.