🌀 Does history repeat itself?
The conditions today resemble what happened before the great crash on 'Black Monday' in 1987, prompting some to ask: Are we on the brink of another violent correction?
In 1987, the picture was as follows:
U.S. President Ronald Reagan pressured the central bank to lower interest rates.
The dollar began to lose its purchasing power.
Stock prices were at severely inflated levels.
🔻 Then came October 19, when the Dow Jones lost more than 22% in just one day.
And today in 2025, we see similar signals, albeit under slightly different conditions:
The U.S. dollar index records its worst performance in 3 years.
Trump, returning to the political scene, calls for a rapid rate cut.
Stocks are still at very high peaks.
And there’s a new player on the field: daily options (0DTE), which now represent more than a fifth of the options market!
⚠️ These short positions make the market very sensitive to any news or sudden movement. A simple statement from the Fed or a slight change in the dollar could spark a massive sell-off, due to the need for immediate actions from institutions to cover risks.
But let’s clarify an important point:
🔎 In the long term, there is no direct and consistent relationship between the movement of the dollar and the profits of major companies.
In other words, the dollar is not an accurate mirror of stock performance.
However… markets don’t just move on numbers, but on the narratives that people believe.
And today, the prevailing narrative says that the market is fragile, and that high-frequency trading and short positions could turn any tremor into an earthquake.
📌 We’re not saying we’ll witness a collapse like in 1987, but… as they say:
History doesn’t repeat itself, but it often rhymes.
In the markets, this resemblance alone may be enough to ignite the storm.