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Deja Vu 2011...Or 1997

Submitted by Tyler Durden on 02/22/2012 17:21 -0400

The S&P 500 has had the best start to the year since 1997, and Gas Prices are accelerating rapidly. Two interesting analogs may be useful to think about the next moves in these markets and whether we see divergence.

S&P 500 2012 performance (green) compared to 2011 (orange) and 1997 (blue) signals perhaps a roll-over is due?

and while gas prices have risen rapidly, they are on the same pace (in percentage terms) as they were last year (incredibly). The difference obviously is the much higher base price.

What triggered last year's rollover? High energy prices acting as a drag? European dysphoria re-emerging? US growth hope fading?

Charts: Bloomberg

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Wed, 02/22/2012 - 16:41 | 2186208 Manthong

Dear Lord,

If you let the market exhibit some connection to reality, I promise I will never dip that strippers hair in the inkwell again.

signed, me.

Wed, 02/22/2012 - 16:42 | 2186219 Mr Lennon Hendrix

What if she asks you to?

Wed, 02/22/2012 - 16:46 | 2186235 trav7777

Everyone around here says "the Fed is going to have to devalue the dollar" and yet we are surprised when the stock market goes up?

I mean, jfc, look around you. I got banned from TF for expressing with 100% certainty that the Fed would print.

Yet there are STILL people around expecting the "rules" to be applied and everything collapses? The nominal prices will rise, real value won't. Simple as that.

Wed, 02/22/2012 - 16:52 | 2186254 Mark Carney

just got a sweet Bday present from my pops. silver FTW.

Its so old he doesnrt even have the certificate for it.

Wed, 02/22/2012 - 17:28 | 2186419 ilion

I like the old school guys. Even today they have a sense of reality.

Wed, 02/22/2012 - 17:31 | 2186434 El Viejo

Speaking of Old School,

Had an old friend that quit drinking then tried to quit smoking. Finally, in desperation he prayed God, please help me quit smoking. Well, he died, but he was in a hospital and they revived him. He didn't have any trouble quitting smoking after that. True Story. Coming to a reality show near you.

Wed, 02/22/2012 - 16:53 | 2186256 Zenseless

From your lips to God's ear trav. Couldn't agree more.

Wed, 02/22/2012 - 16:56 | 2186260 Dr. Engali

That's true if there isn't a scramble for liquidity. They can keep this market artificially high until the margin calls start coming in. Once that starts happening the market will get a reality check.

Wed, 02/22/2012 - 16:55 | 2186265 Flakmeister

Which is why being short is a day trade....

Wed, 02/22/2012 - 17:32 | 2186437 Random_Robert

Exactly...

Short AAPL looks like a 6 month plan that can't miss, until you factor in the margins.

Frankly, this market is geared more easily to make you 10% on the long side than 5% on the short side (even when the technicals and the fundos are screaming in collaboration)

Wed, 02/22/2012 - 16:59 | 2186274 Manthong

You have a valid point.

To my mind, it infers that there is no break at all before the hyperinflation.

Wed, 02/22/2012 - 17:08 | 2186315 Milton William ...

Stocks are not commodities. They don't just go up because CB's print....they have recently, but more paper dollars doesn't mean more wealth.

Wed, 02/22/2012 - 17:33 | 2186442 Random_Robert

"more paper dollars doesn't mean more wealth"

-No Way... Really?

Wed, 02/22/2012 - 17:29 | 2186425 J 457

Doubtful FED will openly print with SPX at 1,357. Maybe 1,100-1,150 range, but not here. Add in price of gasoline = no QE until markets and commodities both cool off.

Wed, 02/22/2012 - 21:06 | 2187282 Flakmeister

Yep... the Europeans printed this go round (along with JCB)... It'll be Ben's turn by Election Day...and he'll start on Nov 10th or so...

Thu, 02/23/2012 - 00:31 | 2187844 Douglasnew

That analysis is soooo David Tepper Appalossa-like and soooo since the '08-'09 bottom until now rearview mirror.....look out the windshield. Problem is, that the rubber meets the road when the poor slobs we used to call the middle class can't buy gas or food anymore and the whole consumption driven experiment ceases to function any longer. That is what is coming so you best be getting into real assets (or railroads like that smart Bumfart from Omaha did) and diversify into all things that you need, not want. I do agree blue chip and staples will survive, not thrive, and are better than cash, bonds or any government securities.....in other words kiss the paper good bye and then wipe with it after you witness the shitstorm ahead.

Thu, 02/23/2012 - 00:31 | 2187845 Douglasnew

Wed, 02/22/2012 - 17:21 | 2186392 Shizzmoney

Dear Lord,

If you let the market exhibit some connection to reality, I promise I will never dip that strippers hair in the inkwell again.

Fantastic, sir! I echo the same sentiments; see you at Scores when the DOW goes back down to 6000.

Wed, 02/22/2012 - 20:15 | 2187122 samcontrol

dow 6000 in 2012 or 2020 ?

Wed, 02/22/2012 - 17:21 | 2186393 FlyoverCountryS...

Remember how, back in 2008, the Big Media was reporting nightly from TV Stations with outrageous prices on them in the background, and the left was demanding that the "EVIL OILCo WHORE IN THE WHITE HOUSE!" be impeached??

Now it's like NBC said today, "High gas prices, beyond a President's control...". Doncha just love "CHANGE!"

Ahhh... the good olde days.....

Wed, 02/22/2012 - 18:41 | 2186721 Nigh Eve

From Bloomberg...

Print Version:

http://www.bloomberg.com/news/2012-02-07/americans-gaining-energy-independence-with-u-s-as-top-producer.html

Video version:

http://www.bloomberg.com/video/85892802/

American energy independence is improving. The low point in our self-sufficiency was in 2005.

Wed, 02/22/2012 - 21:08 | 2187301 Flakmeister

I suppose when things collapse such that the US burns ~6 mmbpd we will be energy independent.. Yeah, I can't argue with that.....

Wed, 02/22/2012 - 22:37 | 2187565 pashley1411

Reminding this audience of the shameless Obamaboosteriism of the MSM is a waste of good electrons.

Wed, 02/22/2012 - 16:41 | 2186210 TradingJoe

"This time it's DEFINITELY different"!!!

Wed, 02/22/2012 - 16:41 | 2186214 battle axe

Also a possible war and food prices going thru the fucking roof...

Wed, 02/22/2012 - 16:42 | 2186221 Eclipse89

European spring in the making?

Better to buy some ammos

Wed, 02/22/2012 - 16:41 | 2186215 Dixie Rect

Time to visit the DOG.

Wed, 02/22/2012 - 16:42 | 2186217 ietalon

Deja Vu 2011...Or 1997

or 1776

Wed, 02/22/2012 - 16:42 | 2186220 ghostfaceinvestah

You can't even remotely compare today's economic climate with 1997. What was the federal deficit as a pct of GDP in 1997? What was total debt as a pct of GDP? What about for other countries?

What was the size of the Fed's balance sheet? What about other central banks?

No, we are much, much closer to the event horizon now.

Wed, 02/22/2012 - 17:25 | 2186407 css1971

Which means they are much much more likely to print.

Wed, 02/22/2012 - 17:38 | 2186462 ghostfaceinvestah

Absolutely, to me, the event horizon is a total collapse of the fiat currency system. What stocks do in that environment, I can't tell you in nominal terms, but in real terms, they go down.

Thu, 02/23/2012 - 15:10 | 2189936 EINSILVERGUY

We are in the early stages of the inflationary cycle. Monies being pushed into risk assets (equities and commodities). Just a matter of time before the dollar dives and markets crash

Wed, 02/22/2012 - 16:43 | 2186222 Cognitive Dissonance

"S&P 500 2012 performance (green) compared to 2011 (orange) and 1997 (blue) signals perhaps a roll-over is due?"

Rut Roh!

Wed, 02/22/2012 - 16:43 | 2186223 falak pema

roller coaster is roller coaster, only now, the ups and the downs will be bigger. QE oblige, the hi-los will be huge. Qe to continue...swing low swing hi...sweet chariot of fire.

Dante painted the bottom place and Michael Angelo the higher place. Place your bets...

Wed, 02/22/2012 - 16:48 | 2186245 saints51

I will place my money on the Inferno. Too much crap going on for this to end well.

Wed, 02/22/2012 - 17:32 | 2186440 J 457

TVIX at $17 seems exceptionally low considering all the global risk. From EU to Iran and high oil prices. One would think it would be in the $30's.

Wed, 02/22/2012 - 19:12 | 2186879 Don Birnam

There is only one Inferno. Get down on it.

http://youtu.be/A_sY2rjxq6M

Wed, 02/22/2012 - 16:45 | 2186227 DutchR

Please don't give crayons to this Bloomberg..........

Wed, 02/22/2012 - 16:45 | 2186231 ietalon

Deja Vu 2011...Or 1997

or 1776 or

Révolution française; 1789–1799

Wed, 02/22/2012 - 16:46 | 2186233 Ted Baker

THE EUR.CHF PEG OF 1.20 TO LOOSE MOMENTUM PRETTY SOON...SNB TO SUFFER MAJOR LOSSES AND LOOSE CONTROL OVER THE PEG AS A RUSH INTO SWISS FRANCS BECOMES FIERCE...

Wed, 02/22/2012 - 16:47 | 2186241 trav7777

In other news, Ted Baker to POST IN ALL CAPS and misspell "lose" like a fkin idiot

Wed, 02/22/2012 - 16:56 | 2186270 Flakmeister

No he meant loose.... as in "I loose all my lose change when I dabble in FOREX"

Wed, 02/22/2012 - 17:02 | 2186289 Manthong

Loosie, you have some 'splaining to do.

Wed, 02/22/2012 - 19:21 | 2186912 falak pema

When I whin I whine but when i win I wine n dine. Now, the loose change comes in handy, as whining and losing amounts to the same thingie, so no loose changie. Thats all the 'splaining you'll get, so git.

Wed, 02/22/2012 - 22:42 | 2187581 old naughty

Best loose explanation ever!!!

Wed, 02/22/2012 - 17:36 | 2186427 Zero Govt

CALLING ALL SPELL-CHECKERS

Take a Long Walk off a Short Pear/Pair/Pier

..that'll confuse them for days

Wed, 02/22/2012 - 17:51 | 2186510 tekhneek

Grammar: The difference between knowing your shit and knowing you're shit.

Wed, 02/22/2012 - 20:18 | 2186940 Don Birnam

"Ted" is the code name for a proprietary bot running a rudimentary, first-gen narrative science program.

Wed, 02/22/2012 - 17:23 | 2186402 css1971

English may not be Ted Baker's first language. It may be his second, third, or indeed, fifth language.

Wed, 02/22/2012 - 17:34 | 2186451 Zero Govt

it is a sign of our times, when the world is over-flowing with shit that some people (i suspect English teachers who even off-duty can't resist patronising people) still have the time to nit-pick at microscopic level others spelling

If you can read it then job (communication) done

Wed, 02/22/2012 - 23:17 | 2187666 StychoKiller

Read this...

Thu, 02/23/2012 - 09:36 | 2188600 pan-the-ist

You sir, are a troll.

Thu, 02/23/2012 - 11:49 | 2189135 Flakmeister

No he is an Anarchist who believes that there should be no rules, even for spelling....

Wed, 02/22/2012 - 18:42 | 2186737 JTBfromtheWL

Pretty good bet. I don't see any downside risks @1.20. Im surest there is accumulation at that rate. Lol.

Wed, 02/22/2012 - 16:47 | 2186239 snowball777

It's like an all-consuming flame of clensing; it eats economic growth.

Long golden parachute silk.

Wed, 02/22/2012 - 17:51 | 2186513 Awakened Sheeple

WRONG. The broken english theory applies here. More teachers will be hired with government spending to teach basic language skills therefore boosting economic growth.

Don't you read Krugman?

Wed, 02/22/2012 - 16:49 | 2186249 Dr. Engali

From the way they were beating the war drums on CNBC this morning my guess is that will be their excuse for the market roll over. The Friday close with spy closing at an anemic 136.4 was my cue to go short.

Wed, 02/22/2012 - 16:54 | 2186263 gmak

The market is fractal. You can find repeats of any pattern. It doesn't mean that the continuation will be the same.

Wed, 02/22/2012 - 16:56 | 2186271 non_anon

same as it always was

Wed, 02/22/2012 - 17:01 | 2186276 honestann

The crash is coming. How do we know? By fundamental analysis, not chart analysis.

Sure, chart analysis kinda sorta works over short time periods, but that's true only because lots of people trade based upon chart patterns (creating self-fulfilling prophesy), and short term chart analysis vaguely mirrors short term psychological aberration.

So, if you're not a churn-and-burn trader, stick with fundamentals, which assure us all the value of the dollar and the viability of the world economy are headed for collapse.

Wed, 02/22/2012 - 17:04 | 2186296 distopiandreamboy

Ben better push print soon before these gas prices get out of hand

/sarc

Wed, 02/22/2012 - 17:08 | 2186318 the grateful un...

put that chart up against the gold stocks. you'll see that although the xau broke down the general market powered on for a couple years. the primary issue then was proforma earnings, and the gloom and doomers saw twenty years of accounting tricks and were sure that was why the markets would crash. now earnings are mostly the result of macro policy aided financial engineering. very few companies are growing their business, unless you count blackwater and the drone makers. earnings don't matter as much as "guidance". if you lie and say the future is looking great you can return shareholder value. pretty easy way to make a living i would say.

Wed, 02/22/2012 - 17:08 | 2186319 Jason T

OT: Todays volume?? Lowest yet?

Wed, 02/22/2012 - 17:12 | 2186345 taniquetil

Everything's ok. The S&P may be in distress due to...everything going wrong, but CNBC just reported that the Dow hit 13,000 yesterday. 13,000 GUYS! Bullish! Experts (who in no way are getting any benefits from pushing their market views on national TV) are saying it's going to be at 15,000 by the end of the year. Lol you Gold Bugs are going to get screwed. I have taken out a loan just to invest more in Groupon and Zynga.

Wed, 02/22/2012 - 17:20 | 2186382 css1971

I hear on good authority leotards are the thing to be in.

Wed, 02/22/2012 - 17:13 | 2186347 YesWeKahn

Ben will print any how, he said already that he doesn't care about food and gas.

Wed, 02/22/2012 - 17:13 | 2186349 Motorhead

Charts, bitchez!

Wed, 02/22/2012 - 17:19 | 2186378 rosiescenario

With HFT's accounting for the majority of all volume, this market today is different.

If the press ever gets around to printing some negative headlines, the bulls will be toast.

Wed, 02/22/2012 - 17:24 | 2186404 Bear

You mean printing some truth?

Wed, 02/22/2012 - 17:22 | 2186398 Bear

Federal Reserve Sky Hooks are keeping the market aloft ... How long can they stay in place? It seems like the fierce dedication to keeping this market up tells the story that they are afraid that the next leg down could be a dozy. I am the Bear, so my perspective isn't always objective and indeed, I've been wrong since March of 2009; however, obfuscation, propaganda, and consensus pandering has been so pronounced that I sense that their fear and paranoia is climaxing.

Wed, 02/22/2012 - 17:28 | 2186422 djudy003

Damn, Robots

Wed, 02/22/2012 - 18:15 | 2186603 arcos

Saudi Arabia Cuts Oil Output, Export: Industry Report

Crude exports from Saudi Arabia were declining by 440,000 bpd, or 5.6 percent in December.

http://www.cnbc.com/id/46445698

Wed, 02/22/2012 - 19:00 | 2186828 shushup

Wow - look at the difference QE made to stocks in 2011 VS. 1997.

Wed, 02/22/2012 - 19:38 | 2186986 ebworthen

Just as they are starting to sucker retail investors back into the toppy markets, eh?

Wed, 02/22/2012 - 21:37 | 2187418 dolph9

Why does zerohedge continue to post this nonsense?

We have never before in human history faced what we are facing now: the bursting of a worldwide population, liquid energy, and credit bubble all at the same time.

We are in uncharted waters. Now, granted human behavior rarely changes, and the past does serve as a reminder of what's possible. But anybody comparing the present situation to any time in the past hasn't done their homework.

Wed, 02/22/2012 - 22:17 | 2187518 I should be working