This content is available through Read Online (Free) program, which relies on page scans. Historians often cite the stock market crash of 1929 as the beginning of the Great Depression because it marked not only the end of one of the nation’s greatest bull markets but also the end of widespread optimism and confidence in the U.S. economy. Knowing what their stock market prediction is based on can help you understand if it is going to be useful for you. The great stock market crash of October 1929 brought the economic prosperity of the 1920s to a symbolic end. Likewise, the Japanese Nikkei bear market of the 1990s occurred over several years without any notable crashes.

This high volume tell us that the extremely huge number of investors left the market, yet we have some group of other investors who was buying in that period at small bargain price – some traders decided to satisfy demands of those who were leaving the stock market in panic.

The extreme rise in the Dow Jones in the period 1920 – 1929 and especially between 1927 – 1929, was primarily caused because the expected value of the shares of companies that are in the acceleration phase of their existence, was increasing enormously.

The usual economic factors which result in crashes include a long-standing time period of rising stock prices, a market with a higher-than-average price-to-earnings ratio and the wide use of margin debt and leverage. The Great Crash and the Great Depression clearly exhibited the frailties and dangers of a totally laissez faire economy. After this dismal week, prices continued to fall, wiping out an estimated $30 billion in stock values by mid-November 1929.

This mass hysteria and negative sentiment on the stock market fuels a craze of selling which keeps on driving stock prices down, thus causing the stock index to suffer. He stock-market crash of 1929 is perhaps the most memorable crash in the history of the stock market. However, a stock market crash is often sudden and dramatic occurring over several days.