Stock market crash is the term used to explain
sudden drop or decline of the index in the market. Stock market crashes
are not that common and world recorded only two or three major crashes.
World has seen some worst crashes before. Stock market crash is
followed by panic selling . World
had seen some worst stock market crashes. The trend of crashes shows
that the crashes do follow certain pattern. When the bulls dominate the
market following positive feed backs for a prolonged period, stock
prices does not reflect the right pricing, motivated people pushing the
market up for their short term gains like the Harshad mehta scam of
India. When the market goes beyond a limit the markets start falling to
maintain a standard. When the market starts falling bears start
dominating and the price keeps on falling. Bears keeps on selling and
short selling to send the market down and make money. The continuing
trend is called stock market crash.
The
most famous of the stock market crashes is 1929 stock market crash.
This particular crash was the result of continuing domination of the
market by bulls sky rocketing the index over the roof because of
positive factors like invention of radio, automobiles, telephone etc.
This positive feeling send the market over the roof. From 63.9 at
August 24, 1921 the Dow Jones industrial average sky rocketed to
381.3 at September3,1929. By the summer the industry and market started
falling. The anxiety of falling market made people selling and thus
happened the greatest crash in the history of stock market.
