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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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.

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.

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.

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 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?


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.

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.

Dre4dwolf's picture

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

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.

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.