The Eight Scariest Charts For Equity Bulls

Tyler Durden's picture

It would appear Mark Twain's infamous quote that "history does not repeat, but it does rhyme" has never been so apt. The following eight charts suggest the rhythm is getting louder and louder. How is it possible? It's nonsense? Well at the heart of the markets, it is still us humans and our endearing greed, fear, and heuristic biases that drive the flows... trade accordingly.


The current price action in the S&P 500 is eerily similar to the movement leading up to the collapse in 1987... (via Bloomberg)


The Dow is also tracking this move almost perfectly over the last two years...(via Citi)


The next three charts are particularly concerning...

Here is the Dow leading up to the 1987 drop - showing its distance from the 55-week average and the collapse once it crossed... (via Citi)


here is an unnamed stock's price action (percentage change) over the past three years...(via Citi)


and AAPL's price appreciation from the lows in 2009 and its 55-week average...(via Bloomberg)


It's not just 1987... Here is the Dow analog again the 1977-78 period and 1905-1910 period... (via Citi)


and the Dow Transports are playing out a very similar pattern to the 1960s-70s... (via Citi)


And a Bonus Chart - for those who prefer to look at Bond Analogs... Here is the current move in 10Y US Treasury yields overlaid on 1992's movement... spooky no? and somewhat fits with a view of weakness into year-end, downgrade on debt-ceiling and collapse... (via Citi)


Machiavelli accounts for this 'repetitive' oscillation by arguing that virtù (valor and political effectiveness) produces peace, peace brings idleness (ozio), idleness disorder, and disorder rovina (ruin). In turn, from rovina springs order, from order virtù, and from this, glory and good fortune.

Machiavelli, as had the ancient Greek historian Thucydides, saw human nature as remarkably stable - steady enough for the formulation of rules of political behavior. Machiavelli wrote in his Discorsi:

Whoever considers the past and the present will readily observe that all cities and all peoples... ever have been animated by the same desires and the same passions; so that it is easy, by diligent study of the past, to foresee what is likely to happen in the future in any republic, and to apply those remedies that were used by the ancients, or not finding any that were employed by them, to devise new ones from the similarity of events.


“Everything that needs to be said has already been said. But since no one was listening, everything must be said again.” — André Gide

Charts: Citi and Bloomberg (as marked above for clarification - not all charts are sourced from Tom Fitzpatrick of Citi)

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Spastica Rex's picture

OK, that just went WAY over my head, Falak.

falak pema's picture

if there is a Kayser Sozee here at ZH who is also TD and is the deus ex machina of all the kinky news we get printed here under his avatar as TD; all the while he is Clark Kent with his pipe and droll as hell, then you know who is superman of ZH, when he isn't the guy with the pipe...Capito...double identity like double indemnity...Now that was a great film with Barbara Stanwyck...just like Usual Suspects...

I'm just a story writer...

Spastica Rex's picture

OMG. I'm glad I didn't have you as a student when I was an English teacher. It would have been like having James Joyce.

Conman's picture

Which is why there is a special place in hell for Bernanke for making grandpa herb and granma betsy move their retirement money into this bullshit.

johnjkiii's picture

It would never get to zero though...

pyrat's picture

Bankruptcy is not zero? Buy some SPX!

jcmjr's picture

But you could, if you held said stock.

jcmjr's picture

But you could, if you held said stock.

falak pema's picture

I think TD is Kayser Sozee, the ZH thread gets more and more like usual suspects; we are in a thriller going deeper into the MAze.

Watch out for a guy with a limp! 

RSloane's picture

Hah! Good stuff, Falak, +1s

AmCockerSpaniel's picture

Do they not delist them at some point?

laspeyres's picture

That's the most bullish thing I've seen all week. That idiot from Citi wheels out these sort of charts every time that market has a two day crap-out. They are totally meaningless.

Spastica Rex's picture

I think we might be able to find a chicken entrails analysis for you, if you prefer.

I can also call my astrologer.


Flakmeister's picture

Augery is preferred terminology....

Be careful, it can be tough to look up Uranus....

falak pema's picture

I'll drink to that, toast and all! 

Uranus and can chose deep down or on the beach, like Capt Nemo. 

surf0766's picture

Perfect. 1987  all over again. My 60 year old baby bommer greedy golfing ass tard neighbor will be pissing in his diaper. Get the popcorn and beer !

falak pema's picture

the 1987 analogy says S&P dips to 970.

surf0766's picture

Really? Nice. Maybe he will dump in his diaper too as he is telling me he voted for O.

earleflorida's picture

'the entire world is throwing-up america's 'exported inflation'-- and, it seems the regurgitated remnants of fiat fodder are that of a deflationary lodestone makeup...lost in a 'polarity paradox'-- god help us all, as a ghostly machiavellian cries out in despair to a agnostic audience of deaf-mutes shouting out shards of spit!' 

chump666's picture

and the old school VXO chart from pre 1987 overlapped with the VIX now.



q99x2's picture

I voted against Feinstein. I lost. She won. Turn in your guns.

Hey you could have made a lot of money buying into the bottom in 1987. This time you won't.

surf0766's picture

Anyone placing bets on the date for the reset?

Awakened Sheeple's picture

No, but $SHTF is up sharply.

Die Weiße Rose's picture

Karl Rove just lost 6 billion on his failed "American Crossroad' SuperPAC election buy-out.

but still poses as "a political consultant and analyst" on FOX - News (that should explain some to some)

FAUX - News run by Rupert Murdoch, the MSM zionist "Neo-Con", telling the british colonial Empire

(and 50% of all Americans) exactly how, when, where and what to think, by hacking into their twitter accounts.

but where was Dick Cheney in the 2012 elections ?

Shooting Ducks with George Bush and Rupert Murdoch no doubt.

Karl Rove looked like a wounded Duck, crying on FAUX TV -

just when all the zionist Neo-Con Punks where feeling so lucky !

Reality showed up and ruined their day.



Atomizer's picture

That is a lame post Die Weiße Rose. Did someone deliver a black rose today or steal the cherry out of your dessert.? You should definitely chase the fucker who stole your grub. alt= go to google.


Die Weiße Rose's picture

I tell you what's lame:

the lame Duck "US House of Representatives"

US Republicans are a bunch of lame Duck Turkeys

who have taken congress hostage and fucked up

not only the US economy, but the whole World economy.

And it all started with that super Idiot George W.Bush and his inbred Neo-Con zionist fuckers

who are a total disgrace and painful embarrassment to any civilized human being.

inbred Neo-Con Zionist rightwing fascist that want to fuck up the World.

that's what I think Republicans really are.

Start building some Dams in New Amsterdam,

because the old british empire is sinking fast!

all that is left now is a big red Elephant

and a whole lot of bullshit.

Karl Rove, Dick Cheney, George Bush and all the rest of those right-wing neo-con fascists

these are the criminals that stole your basic human rights -

and you sit there on your China manufactured Apple and blame Obama !

time to wake up you stupid fucks!



Atomizer's picture

You missed the message, but others understood.

FerretBrain's picture

Way to go, DWR...this is one of the worst attempts I've ever seen at hijacking a thread.  Here's your reminder -- the article is about charts and markets and has NOTHING to do with politics.

Pull your head out of the nether regions where you have it planted.  Contribute to the thread or GTFO!

Die Weiße Rose's picture


EVERYTHING has to do with Politics

obviously this fact is completely lost on momos like you.

never mind - I have no desire to hijack your mutual admiration circle jerk club.

just read through the thread and pretent it's about charts and markets...

nothing to do with politics, just FerretBrains.

magpie's picture

Interesting that campaign costs are brought up; since those correctly tallied should contain the Greek bailout and some QE 3 for obvious reasons.

Atomizer's picture



"October: This is one of the particularly dangerous months to invest in stocks. Other dangerous months are July, January, September, April, November, May, March, June, December, August and February."

 - Mark Twain

Here, Kitty, Kitty, Kitty. Ding ding ding. Your QE crack to infinity milk bowl happens to be topped off again. Meow!

IMA5U's picture

The world will implode and all that will be left is gold

The.Oracle's picture

Considering these charts and Marc Faber saying a 20% decline in the S&P500 is a must, I'm very content to sit short and wait for 1987 :)

laserjock's picture

Stop playing with curve-fitted analogs. Paul Tudor Jones just turned over in his grave.

Diesel Seven's picture

Nice charts-looking at similar today on the Bloomy. After reading hundreds of "Tyler's" posts, I had an epiphany. I now have a very good idea who (at least in part ) Tyler Durden is. I won't say my guess, but when I construct a mosaic of Tyler and compare to the person I am thinking off, I think I got it right. Either way, keep up the good work "Tyler".

steveo77's picture

Uh, now for a practical matter...
Sign up on link on right side "Engelhard" and win free 10 ounce bar of silver.
Not a joke

BeansBulletsBandaids's picture

kinda OT, but i'm new to a lot of this financial stuff:

why use a 55 week average and not a 52(year)?

ReactionToClosedMinds's picture

Intrigued by the Bonus Chart ... thanks as always Tyler.  Maybe finally Gross, Faber, Zulauf. Rogers, etc will be proven correct.

As much as I wonder about NBC & Brian Williams et al, this is too much pain for everyman for them to be shown to be the fools they are (excepting Santelli)


Jam Akin's picture

Reaction to the Bonus Chart:  "Derivatives killed the sale of bonds" - sing to the tune of "Video Killed the Radio Star"

ReactionToClosedMinds's picture

yes, derivatives, the leveraged way to skin the regulatory cat does distort the direct Bonus Chart 10 yr bond comparison.  Wonder what the 'updated' view (derivatives as well) suggests?