‘The 55 Day Rule’ Expires Tomorrow

OptionStrategist.com’s Lawrence G. McMillan makes an interesting observation…

Most people don’t realize that the Crash of 1929 and the Crash of 1987 both occurred exactly 55 calendar days after the stock market had topped.

All prices in this article are closing prices on the day being referenced.

1929: the peak in the Dow was reached on September 3rd, when it closed at 381.17.

55 calendar days after September 3rd was (Monday) October 28th. That was the exact date of the Crash of 1929, with the Dow down 40.58 points, or 13.5%.

1987: the Dow topped out at 2722.42 on August 25th.

55 calendar days later was (Monday) October 19th when the Dow collapsed 507.99 points, or 22.6% in one day!

This year, the Dow topped out on January 4th, and…

55 days later is Monday (!) February 28th.

In both 1929 and 1987, there was a sharp market decline in the week preceding the Crash, so that is something else to watch for.

These Crashes just didn’t appear out of thin air.