Wall Street Panic Attacks - A Historical Perspective & What To Expect

1. Panic attacks similar to last week's have occurred, for whatever reason, a number of times in the past.

2. Here are some of the historical panic attack dates that are similar to the meltdown the occurred on Black Thursday, May 6, 2010:

May 29, 1962, January 8, 1986, September 11, 1986, October 19, 1987, October 13, 1989, March 8, 1996, October 27, 1997, August 31, 1998, February 27, 2007, etc.

3. After the shock day, typically there were 1 to 3 days of additional selling pressure.

4. After an intitial low is put in, there was usually a vicious 2 to 5 day rally.

5. Everytime, after that initial rally failed, the market retested the panic low.

6. The intraday range of the intial shock day usually contained the price action for the next 1 to 3 months. Any probe above or below the shock-day range was beaten back quickly.

7. All of these panic attacks marked fairly major intermediate-term market bottoms.

8. So if history is any guide, expect the market to move sideways for a few months and ultimately break out of the trading range to the upside.