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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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Thu, 11/08/2012 - 17:28 | 2962173 Spastica Rex
Spastica Rex's picture

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

Thu, 11/08/2012 - 17:36 | 2962202 falak pema
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...

Thu, 11/08/2012 - 17:39 | 2962223 Spastica Rex
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.

Thu, 11/08/2012 - 17:39 | 2962224 Flakmeister
Flakmeister's picture

It's Ward Cleaver....

Thu, 11/08/2012 - 17:10 | 2962081 Conman
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.

Thu, 11/08/2012 - 18:39 | 2962439 johnjkiii
johnjkiii's picture

It would never get to zero though...

Thu, 11/08/2012 - 22:23 | 2963058 pyrat
pyrat's picture

Bankruptcy is not zero? Buy some SPX!

Thu, 11/08/2012 - 22:39 | 2963106 jcmjr
jcmjr's picture

But you could, if you held said stock.

Thu, 11/08/2012 - 22:39 | 2963107 jcmjr
jcmjr's picture

But you could, if you held said stock.

Fri, 11/09/2012 - 03:44 | 2963625 are we there yet
are we there yet's picture

Enron is zero

Thu, 11/08/2012 - 17:08 | 2962066 falak pema
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! 

Thu, 11/08/2012 - 17:50 | 2962272 RSloane
RSloane's picture

Hah! Good stuff, Falak, +1s

Fri, 11/09/2012 - 03:25 | 2963616 AmCockerSpaniel
AmCockerSpaniel's picture

Do they not delist them at some point?

Thu, 11/08/2012 - 17:16 | 2962110 laspeyres
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.

Thu, 11/08/2012 - 17:28 | 2962167 Spastica Rex
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.

SIGNS AND PORTENTS

Thu, 11/08/2012 - 17:41 | 2962234 Flakmeister
Flakmeister's picture

Augery is preferred terminology....

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

Thu, 11/08/2012 - 17:42 | 2962238 Spastica Rex
Spastica Rex's picture

I just choked on my toast.

Thu, 11/08/2012 - 18:07 | 2962336 falak pema
falak pema's picture

I'll drink to that, toast and all! 

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

Thu, 11/08/2012 - 17:21 | 2962130 resurger
resurger's picture

Let it burn

Thu, 11/08/2012 - 18:08 | 2962337 surf0766
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 !

Thu, 11/08/2012 - 18:20 | 2962374 falak pema
falak pema's picture

the 1987 analogy says S&P dips to 970.

Thu, 11/08/2012 - 19:22 | 2962564 surf0766
surf0766's picture

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

Thu, 11/08/2012 - 18:13 | 2962349 dexter_morgan
dexter_morgan's picture

BOHCFMDJA!

Thu, 11/08/2012 - 18:31 | 2962399 earleflorida
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!' 

Thu, 11/08/2012 - 18:27 | 2962403 MeelionDollerBogus
Thu, 11/08/2012 - 18:54 | 2962482 chump666
chump666's picture

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

frightening...

 

Thu, 11/08/2012 - 19:06 | 2962521 q99x2
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.

Thu, 11/08/2012 - 19:26 | 2962572 surf0766
surf0766's picture

Anyone placing bets on the date for the reset?

Thu, 11/08/2012 - 20:13 | 2962655 Awakened Sheeple
Awakened Sheeple's picture

No, but $SHTF is up sharply.

Thu, 11/08/2012 - 20:31 | 2962677 Die Weiße Rose
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.

LMFAO

wr;)

Thu, 11/08/2012 - 20:50 | 2962752 Atomizer
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.

 

Thu, 11/08/2012 - 22:02 | 2962984 Die Weiße Rose
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!

wr;)

 

Thu, 11/08/2012 - 22:48 | 2963130 Atomizer
Atomizer's picture

You missed the message, but others understood.

Thu, 11/08/2012 - 23:52 | 2963293 FerretBrain
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!

Fri, 11/09/2012 - 00:36 | 2963376 Die Weiße Rose
Die Weiße Rose's picture

FerretBrain

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.

Fri, 11/09/2012 - 00:05 | 2963327 surf0766
surf0766's picture

Your forgot False Flag,

Thu, 11/08/2012 - 22:28 | 2963073 magpie
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.

Thu, 11/08/2012 - 20:31 | 2962692 Atomizer
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!

Thu, 11/08/2012 - 20:33 | 2962698 IMA5U
IMA5U's picture

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

Thu, 11/08/2012 - 20:58 | 2962774 The.Oracle
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 :)

Thu, 11/08/2012 - 21:27 | 2962877 laserjock
laserjock's picture

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

Thu, 11/08/2012 - 22:46 | 2963124 Bernankenstein
Bernankenstein's picture

Paul is not dead.  ???

Thu, 11/08/2012 - 22:40 | 2963112 Diesel Seven
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".

Thu, 11/08/2012 - 22:51 | 2963137 steveo77
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
http://oahutrading.blogspot.com/

Thu, 11/08/2012 - 23:34 | 2963253 BeansBulletsBandaids
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)?

Thu, 11/08/2012 - 23:34 | 2963254 ReactionToClose...
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)

 

Thu, 11/08/2012 - 23:51 | 2963284 Jam Akin
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"

Fri, 11/09/2012 - 00:05 | 2963324 ReactionToClose...
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?

Fri, 11/09/2012 - 01:19 | 2963450 fijisailor
Fri, 11/09/2012 - 01:40 | 2963485 ekm
ekm's picture

Anybody remembers the Whale of JPM?

He owned 70% of that market. Hence there was nobody to sell to...and still there isn't.

 

Once very soon there will be a meeting. When Hank Paulson revealed to his buddies in a closed door meeting that Lehman would not be saved, it was after a meeting. A decision was made in that meeting.

 

Very soon there will be a meeting. Remember MFG was NOT saved? It was a primary dealer.

Very soon, very soon. Another meeting where a decision will be made that another primary dealer would not be saved in order to crash the market. Ahhh, it so badly needs a crash.

Fri, 11/09/2012 - 02:02 | 2963528 Milton Waddams
Milton Waddams's picture

These 'fractals' rarely ever work.  With that said, NDXppl looks like a sell into strength from now on... while the other indices are quite literally on the precipice of joining it.

Fri, 11/09/2012 - 02:11 | 2963540 Gamma735
Gamma735's picture

People, you are looking at this all wrong.  It will be lots of fun as we see society dissolve before our very eyes.

 

The will come a time when the wheat will be separated from the chaff.

Fri, 11/09/2012 - 02:52 | 2963584 Flatchestynerdette
Flatchestynerdette's picture

All of this would be very concerning and very true but we are living in different times.

The Fed - through one of its bank puppets- will merely go in and buy S&P futures at the end of each day and prop up a stock market that is floating on air.

 

Its meaningless but then again.......so is everything else these days.

The rules have been rewritten by the 47%'ers.

I've been asking for 2 years when will the day of reckoning come? And it hasn't.

I've been asking when Greece will FINALLY see the light and vote to get out of the Euro - it hasn't.

When will the strings unravel?

By any normal timeframe - it should've been by now.

So the true question is: what's keeping the strings from unraveling? Greece daily goes to protest, they vote in new members to the parliament who promise not to sell out the people yet - something? happens and the vote keeps Greece in the eurozone.

 

Same with Spain. Where are they now? Trying to keep Catalonia in its grip? Why hasn't C broken away yet? And France - 75% taxes yet those making money are only "thinking" about moving?

Complacent.

We'll take anything they give us and bend over to ask for more.

Gosh - I wish these charts would actually happen. But they won't.

Fri, 11/09/2012 - 04:30 | 2963673 steveo77
steveo77's picture

Well now, if you are up early, pondering the market,
considering clicking and entering a number, like say 35.21 and being sent a 10 oz bar of silver.    Not a scam, the real deal.

Go to the right side, click on the "Engelhard" and enter the contest.   This is for futures spot price on Nov 30.   Real deal, enjoy it.

http://oahutrading.blogspot.com/

Fri, 11/09/2012 - 05:54 | 2963733 Dre4dwolf
Dre4dwolf's picture

I think everyone is tired of charts by now, we want candy, give us some candy I like Milk Duds.

Fri, 11/09/2012 - 07:53 | 2963811 Inthemix96
Inthemix96's picture

Since no-one here has had the decency to say it,

The good old "Thrush" man, (irritating cunt) bernank,

Fuck you, you poisoned little bastard.  A veritable shit in a suit.  A plague of filthyness on the face of humanity.  And a stain of wank on his mothers dress.  Its a shame you're mother never swallowed bernank.

Then none of us could have hated you with a fucking vengence.

Fri, 11/09/2012 - 07:56 | 2963813 Grand Supercycle
Grand Supercycle's picture

Wile E. Coyote Crash Update:

SP500 Head & Shoulders formation on daily chart continues.

Weekly chart also shows likely Head & Shoulders.

Look Out Below.

http://trader618.com
http://tinyurl.com/ZH-Forum

Do NOT follow this link or you will be banned from the site!