This is what a stock market crash looks like
REUTERS/Kham
Stock prices have been zig-zagging over the last few weeks with the Dow plummeting 1,089 points last Monday, opening sharply higher and then closing red on the next day, and somehow still ending that week up from the previous one.
More recently, Tuesday was yet another brutal day as all of the major US indices dropped nearly 3% on the first day of September, coinciding with an 8% oil plunge.
Although we can't say we're doomed to crash in the near-term, it would be a mistake to get complacent given all of this aforementioned volatility.
Generally, when people think about the tech and credit bubbles in the stock market, they tend to visualize a single crazy stock plunge that just keeps going and going in one direction: down.
When stock market bubbles come to a head, however, they tend make wild swings. In other words, they don't just suddenly burst - it's more of a wild up-and-down process.
In a January note to clients, UBS strategist Julian Emanuel zoomed into the stock market action during the previous two major market peaks to illustrate this important observation. UBS
Andy Kiersz, Business Insider
After all, it's extremely difficult for investors and economists to tell whether the market is in a bubble, and, furthermore, whether that bubble is bursting.
But given the recent volatility, one can't help but wonder whether the stock market is crashing. Unfortunately, it'll be a while before we confirm whether that is actually happening or not.
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