Definition of a Spike in the Stock Market

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The stock market and economy are constantly moving and fluctuating. Every now and then, a spike occurs. A spike is a significant change in the market that can occur within a brief period.

Identification

A spike is a drastic upward or downward movement of value or price level within a short period, according to "Stock Market Cycles: A Practical Explanation."

History

According to the book, "High-Powered Investing All-In-One For Dummies," an example of a negative spike in the stock market was the stock market crash of October 19, 1987, also known as Black Monday. During Black Monday, the S&P 500 fell more than 20 percent.

 

Considerations

The market will occasionally behave in a wild and random manner, according to "High-Powered Investing All-In-One for Dummies." Though market observers and experts can detect the various conditions that can cause a spike, these technical warnings may not always lead to an actual spike. This is what makes a spike unpredictable.