The Most Dangerous Stock Market Day of my Lifetime!!

marycoupland5
May 12
3 min read

By Mike Adams, April 12th, 2025

The potential for the DOW to drop 10,000 points or even at much as 20,000 points more – that was Monday April 7!I lived through the October 19, 1987 crash that took the in the market down 22.6%: the biggest one day percentage loss in one day. Monday April 7, 2025 could very well have dropped even more.

In the first hour of Black Monday 1987 the DOW dropped 9.3%, The Dow then rallied up 3.5% and then fell another 8.6% before a 1.6% rally. In the last hour the DOW plunged another 9.3% to finish the day down 22.6%.

On Monday April 7 that would have meant an equivalent point drop of almost 10,000 points.But April 7 could have been worse.

On Black Monday computer programs were set up to sell baskets of stocks. Each basket was $25 million, but it was a human that had to press the “enter” button on the keyboard to dump the basket.

That day in 1987 the volume was overwhelming. Trade confirmations were slow in being reported. The humans with the buttons worried as the market fell their basket had not been sold, so they pressed the button again and again.The SEC responded a few months later by setting “circuit breakers” so that if the S&P 500 declined by 7%, the market would shut down and all trading stop for 15 minutes. Then resume.

The logic was 15 minutes was plenty of time for the exchanges to report confirmations and the humans with the buttons would not panic to hit the button an extra number of times.That was technology in 1987. Most of the trades that year were made by humans.

Today 95% or more of trades are made by computer algorithms, bots, with no human involvement.‘“Liquidity is terrible, so anyone with just a decent-sized order is going to move the market”, Brent Kochuba, founder of the options data provider Spot Gamma wrote in a research note to clients on Monday’1.‘”An investor wanting to put through a trade of $100 million is going to chew through many, many levels of the orders stack, and they are going to move the market quite a lot with that trade”. said Benn Eifert1 [of QVR Advisors].

QVR Advisors is one of the billion dollar algorithm firms.Everything seemed in place for a dramatic down day on Monday April 7.On Sunday night April 6, the stock market futures for the S&P 500 were showing the market would open down 6.5%. It was very close to the circuit breaker which would have shut down all trading for 15 minutes.Had the circuit breaker been triggered there is a significant probability that 15 minutes later when trading began again the bots would have dumped again and within seconds they would have triggered a second circuit breaker and then a third and a fourth and ….None of these trades have anything to do with the real value of the stocks.

We believe the fundamentals of the stocks in the Adams Financial Concepts portfolios minimized the impact of tariffs levied on the other countries of the world. The trades were simply driven by the bots. The bots read the news. They can turn in milli-seconds and in fact, did. At one point the bots read that Trump was going to delay the tariffs for 90 days and in milliseconds the market from down 5% to up 3.4%. That happened in milliseconds. When the White House denied the reports the bots reversed and sent the market back down.

For Adams Financial Concepts we made some defensive sales at the opening of the market. In my 39 years of being a financial advisor I have never sold; we are always fully invested. Being fully invested has meant that we have outperformed the S&P 500 TR since the Adams Financial Concepts inception in 2005.

This time was different.Had the circuit breakers been triggered once it is very probable they would have been triggered multiple times. There is no human to reason through what is happening. There are only the bots who are programmed to trade first and check later.

The possibility the DOW could have been sent to 20,000 was a very real possibility. Is there still a risk of a collapsing stock market? Yes, but in our opinion the probability has shrunk considerably. It will take a week or two for the stock market to settle and once again be driven by the stock valuations rather than the bots.

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