1987 crash - what happened

On August 26th the stock market started to drop. It didn't seem too significant at first, and not many were concerned. But the selling continued and the pace picked up:

Stock Prices Fall for Second Day as Feeble Recovery Effort Fails - Wall Street Journal, 8/28/87

Stocks Ease as Jittery Investors Worry Over Dollar, Bond Prices - Wall Street Journal, 9/3/87

Stocks Tumble After Early Gains; Interest Rate Fears Are Blamed - Wall Street Journal, 9/22/87

By 9/21/87, the DJIA had dropped 8.4%. But this was a historic bull market, and the bulls were not about to give up without a fight. Investors and speculators had learned to "buy the dips". On 9/22/87, the stock market rebounded powerfully.

There were plenty of bulls in the paper that day. One analyst was quoted as saying "The bears finally climbed to the top of the ladder and fell off". Another analyst said "yesterday's reversal marked the end of the correction". Noticeably absent in the Journal that day were any bears - no one was quoted as being worried that the market had further to fall.

And they were right, for a while. Over the next two weeks, the market worked its way higher. At the close on October 2nd the DJIA stood at 2641, 5.9% higher than on September 21st. But the market took a sharp turn south on October 6th...

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How can the market change so dramatically in eight weeks? How can a seemingly invincible market unravel into panic in such a short time? It has been 10 years since the the 1987 Crash, and the story is just as dramatic as it was 10 years ago...