It's Different This Time: The Scariest Equity Market Chart Around

Tyler Durden's picture


While analogs for periods past have been shown time and time again, the striking similarity of the last four months of this year and the same period last year is becoming extremely worrisome. The rips and dips are of almost perfectly equal size and duration and retail and professional participation is also very similar. July 21st marked the top last year after failing to break the highs of a July 4th week peak (which occurred on low average trade size). It would appear the bulls are hoping that it's different this time - or else it is very scary with S&P 500 set for the magic 1200 Bernanke Put strike very soon.

Each green and red arrow is identical from the current period to last year's. Notice the dark red arrow indicating the yellow bar (h/t @eminiwatch) indicating amateur or retail investors getting wrong-footed and then a subsequent failed rally with a lower high... which lead to the plunge - that would take us below 1200 in the S&P 500 currently...


The plunge in stocks - in case you were wondering - would imply a 10Y TSY rate around the magic 1% mark. While we do not use longer-term CONTEXTual models for trading, it is perhaps interesting to note how the highly correlated markets' behavior of May would have played out to now - implying an S&P 500 of 1200 (based on those risk-asset relationships from May)...


which just happens to be the same as the implied Bernanke Put Strike we worked through recently...


and just in case you were wondering about short-interest, Commitment of Traders looks very similar too...


Charts: Bloomberg, Capital Context, and Tradestation

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Mon, 07/16/2012 - 19:31 | 2622207 FieldingMellish
FieldingMellish's picture

Fed continues playing "keepy uppy".

Mon, 07/16/2012 - 19:32 | 2622214 Debtonation
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Mon, 07/16/2012 - 19:43 | 2622236 Michael
Michael's picture
OT Countdown to war with Iran is on but who really wants it? 'No War On Iran' Billboards up in Oklahoma City

Mon, 07/16/2012 - 19:53 | 2622272 cbxer55
cbxer55's picture

Interesting find! I've not seen them as of yet. You in Oklahoma, or just found that somewhere?

To be fair, I treat billboards like I do any commercial advertisement. I ignore them totally. So I gues it is no surprise I have not seen them. Don't watch the idiot box much. The few times I do, I change channels during the blah-blahs. When I get disgusted, I turn it off. Same with radio.


Mon, 07/16/2012 - 20:11 | 2622311 The Monkey
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Maybe Uncle Ben will hit the printers in time to spike crude so that the ensuing recession can be made worse. Then when it all falls apart, we'll get the 2008ish benefit of another glut.

Drive your Prius for the next few months, then be prepped to break out the Hum-Vee.

Mon, 07/16/2012 - 21:07 | 2622512 JohnG
JohnG's picture



IF Ben prints (that's a big if) it will be September.  That leaves enough lag time to make it look like "not a political move by O'shitforbrainsCriminal."  Oil won't spike hard before the elections, after that, it's QE to the moon.

Arable land is what you want, and read about (or even take some classes) on farming.  People MUST eat.  From my perspective, farm land is more valuable than gold, which I also own.

I feel lucky to be a farm boy at this point.  Thought it had little future until about 2004. 

It damn sure does now.

Mon, 07/16/2012 - 22:54 | 2622915 The Monkey
The Monkey's picture

NYSE shorts top 2011 peak just as cyclicals hit their trough, CPI hits zero, Bernanke hits the stage and Google / Apple are nearing earnings announcements.

Can you say SHORT SQUEEZE?!?

Tue, 07/17/2012 - 00:04 | 2623125 Spirit Of Truth
Spirit Of Truth's picture

Elliott Wave count agrees with this article's assessment....we should be on the edge of the cliff in terms of mass mood.  A potential question is, what will be the source of historical upset?  Certainly war is a possibility:

Let's hope and pray this is not the case, but the prophet's writing does seem to be on the subway wall for us to read...

Tue, 07/17/2012 - 02:35 | 2623310 SilverRhino
SilverRhino's picture

Farmers work for the ones with the most guns.   Sucks but it's true.  

Mon, 07/16/2012 - 20:27 | 2622357 Michael
Michael's picture

It's amazing the information you can find on Daily Paul that's not found anywhere else.

I also find it interesting Fox News has shut up Michael Scheuer's view on non-interventionist foreign policy in preparation for the Iran War.

Michael Scheuer: Ron Paul, Judge Nap, Israel and Fox News (video)

Mon, 07/16/2012 - 21:10 | 2622521 DanDaley
DanDaley's picture

Michael Scheuer is one of the true patriots.

Mon, 07/16/2012 - 21:57 | 2622726 Shizzmoney
Shizzmoney's picture

I also find it interesting Fox News has shut up Michael Scheuer's view on non-interventionist foreign policy in preparation for the Iran War.

"Interesting", eh?  More like "obvious".  First they can the Judge (like him or not, he was also against the iran War).  Then they trash Ron Paul throughout the whole Republican Primary process (and Romney, too....until Fox conceeded the fact that they are in bed with this guy).

Pretty obvious a) where Fox wants to go and b) where we are headed with Iran by the end of the century.



Mon, 07/16/2012 - 23:16 | 2622986 yrad
yrad's picture

Daily Paul is my homepage. Then ZH. Best site on the web. Ron Paul will be missed...

Tue, 07/17/2012 - 08:41 | 2623711 StychoKiller
StychoKiller's picture

Do some internet streaming: (Jazz - "The Oasis in the City")

Mon, 07/16/2012 - 20:52 | 2622458 ParaZite
ParaZite's picture

> Implying that our corrupt, criminal, politicians actually listen to "we the people". 


They have billion dollar campaigns to fund, and that requires a lot of oil, and a lot of blood.

Tue, 07/17/2012 - 03:21 | 2623351 bankruptcylawyer
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boy oh boy do i remember 2003 when people were biking around with signs 'bikes against oil wars' . 

i'm an avid cyclist and was very angry about the march towards war in 03. but my anger was mixed with the hopeless passiveness of impotence. and seeing those signs, made me feel even more so, knowing those hippy bitch bikers were the last people to be taken seriously by anyone on the street or in power. 

it was sad. the same will happen, the signs are all the same. 


i'm convinced the u.s. will only stop warring if it loses the ability to make war aggresively, which means when we have a massive domestic financial collapse , and the international markets stop accepting dollars at anywhere near current currency/price levels. when we can no longer purchase the loyalty of marginally allied countries like pakistan, the slow decling of american aggresion will begin. only then will we start to see if american military is willing to go full as nuts into provoking a full scale war of destruction against russia and china. somehow, i think not. i think the gameplan is set. But how much longer will the chinese provide us slave labor. 

perhaps the next big leg 2o or 30 years from now, is the industrialization of africa, and turning african nations into slave laborers for the developed world AND for Russia and China, while maintaining an uneasy peace between all major superpowers. 

sort of hard to believe. seems too complicated. but if we are to reduce the possibilities to the simple ones, than some sort of small war between major powers somewhere is bound to flare up into a bigger war in the next decade or so. and this beckons the question of who will lose the game of chicken, or will superpowers all go off the cliff together?

Mon, 07/16/2012 - 19:54 | 2622275 vast-dom
vast-dom's picture


Tue, 07/17/2012 - 00:40 | 2623190 BeatTheMarket
BeatTheMarket's picture


        Ponzi Ponzi

             Ponzi Ponzi Ponzi

        Ponzi Ponzi Ponzi Ponzi


Tue, 07/17/2012 - 04:10 | 2623378 Satan
Satan's picture

Indeed! Who would have thought that Charles Ponzi would become one of the most influential economists of our time?!

Tue, 07/17/2012 - 05:13 | 2623406 AvoidingTaxation
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Genio Italico

Mon, 07/16/2012 - 21:20 | 2622569 billwilson
billwilson's picture

Of course it looks the same. They are running the same algorithms as last year. There are not any real people left trading, just algorithms ... running the same programs over and over and over.

Mon, 07/16/2012 - 21:48 | 2622700 PC Load Letter
PC Load Letter's picture

So does my girlfriend

Mon, 07/16/2012 - 19:31 | 2622210 Diet Coke and F...
Diet Coke and Floozies's picture

Gentlemen and ladies, I have discovered the PERFECT solution for everything: Everybody on earth stops having kids. In 120 years, no more problems!


It has been noted that the chief cause of problems are solutions...

Mon, 07/16/2012 - 19:43 | 2622240 Bobportlandor
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Actually no more problems occure when last fertile women is 60 years old.

Mon, 07/16/2012 - 19:54 | 2622277 Dr. No
Dr. No's picture

If you use the FED models, it never actually gets to zero, it only "approaches".

Mon, 07/16/2012 - 21:17 | 2622554 JohnG
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Do economics majors even require calculus?

Mon, 07/16/2012 - 21:30 | 2622625 The Monkey
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Business calculus, a weak cousin to it's counterpart.

Mon, 07/16/2012 - 19:56 | 2622281 babylon15
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This already happened in Europe and East Asia (Japan, Hong Kong, Macau, Singapore).  Now it is happening in the United States, as we will record our first year in United States history with a fertility rate below replacement rate of 2.1 (it is 1.89 this year).

Tue, 07/17/2012 - 08:17 | 2623628 madcows
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I have 4 kids, a wife and a house.  I tell everyone I meet "Don't get married.  Don't have kids.  Don't buy a house.  Work 2 jobs and you might stand a chance."  It seems they are at least listening to the no kids and no house part.

Mon, 07/16/2012 - 19:38 | 2622226 ATM
ATM's picture

When the Algos run the market this is what you get - repeating patterns. And we know the Algos run the market.

Mon, 07/16/2012 - 19:47 | 2622253 Everybodys All ...
Everybodys All American's picture

I'm waiting for the eventual exposure of the Algos/HFT/Fed/PPT in the same form as the LIBOR manipulation at some point.

Mon, 07/16/2012 - 19:42 | 2622238 Kiss My Iceland...
Kiss My Icelandic Ass's picture

Past performance is No Guarantee of Future Results

Mon, 07/16/2012 - 19:59 | 2622284 putbuyer
putbuyer's picture

QE threats are there for sure, but TA is the best we have right now. This analysis and guys like Shanky call them very close.  IMHO, I think Technical Analysis is our best friend right now. Peace

Mon, 07/16/2012 - 20:55 | 2622467 CrashisOptimistic
CrashisOptimistic's picture

TA was based on a principle.  It attemped to characterize repeatable human emotion response to stimuli.

Given 75% of volume is no longer humans, TA has no further basis.

Tue, 07/17/2012 - 07:32 | 2623524 Withdrawn Sanction
Withdrawn Sanction's picture

And machines are programmed by....?  (esp the dump "switches")

Mon, 07/16/2012 - 19:48 | 2622255 Meesohaawnee
Meesohaawnee's picture

whats so scary about the "market" trading and behaving like a "market"???

Mon, 07/16/2012 - 21:20 | 2622574 JohnG
JohnG's picture

Because it's not a market anymore.  It's a casino, and it's rigged.  At least in Vegas you know the house has the advantage.  That's the "scary" thing.

Mon, 07/16/2012 - 19:49 | 2622260 max2205
max2205's picture

Cookie cutter market. Like groundhog year, not day

Mon, 07/16/2012 - 19:50 | 2622261 TraderTimm
TraderTimm's picture

Who trades equities anymore, not the little guy.

Doesn't bother me, I'm up 30%+ on my last BTC trade. At least it acts like markets used to act, with actual consolidation periods, rallies and breaks.

Makes me miss the S&P when it wasn't swamped with 'effing HFT robots.

Mon, 07/16/2012 - 19:51 | 2622264 Everyman
Everyman's picture

Each green and red arrow is identical from the current period to last year's.


Why would you expect a different chart pattern?  The only thing that HAS been consistent is the market manipulation and the FED RES POMO, QE and twists.  NOTHING has changed, and FOR THAT REASON ALONE this chart should scare everybody in the financial sector.  WHY???  Because it indicates that all we have done with the interventions and fiscal policy is paint over the dirt.  The economy not only sucks since 2008, but in 2012 it is worse, unstable and repetitive.

The can kicking will continue, but the effectiveness of the kick, or this distance the can travels is rapidly decreasing into non effect.


We are done, and THAT is what this chart shows.

Mon, 07/16/2012 - 20:06 | 2622300 Goldilocks
Goldilocks's picture

Live Free or Die Hard (2007)


Matt Farrell: Seriously, you probably shouldn’t antagonize them since they have all the loaded guns and whatnot.

Lucy McClane: Listen, will you just take a minute and dig deep for a bigger set of balls, ‘cause you’re gonna need them before we’re through.

Matt Farrell: Wow, I know that tone. It’s just weird hearing it come from someone… with hair.   ;)

Mon, 07/16/2012 - 19:51 | 2622267 nmewn
nmewn's picture

Oh Billy billy billy billy...just sink this putt.

Mon, 07/16/2012 - 19:52 | 2622270 Need More Cowbell
Need More Cowbell's picture

Big red line = one loud NIEN!  Grab those balls that we all know you have Merkel.

Mon, 07/16/2012 - 19:53 | 2622273 cougar_w
cougar_w's picture

It might seem similar, but this is the year running into US elections. Starting in about a month, I can't see how TPTB (in the Obama camp at least) will leave anything to chance or technicals.

Their illusions will be our reality. Nothing else will survive.

Mon, 07/16/2012 - 19:59 | 2622282 buzzsaw99
buzzsaw99's picture

Where is the twelve month gold chart? lulz

How about a 12 month chart comparing TLT to GLD? BWA AH AH!

Mon, 07/16/2012 - 19:58 | 2622285 LeisureSmith
LeisureSmith's picture

Like a rock skipping across the surface of a lake.

Mon, 07/16/2012 - 19:58 | 2622286 lemosbrasil
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thamks a lot zero hedge...ive put at my blog this same algorithm......ive put too in last post the link......congratulations cause your work is simply amazing  and spetacular

Mon, 07/16/2012 - 20:03 | 2622297 q99x2
q99x2's picture

Ya didn't think the FED was going to pay to upgrade its software did you?

Mon, 07/16/2012 - 20:05 | 2622299 mayhem
mayhem's picture

a crash now would be great for Obama. QE to the rescue would start a rally into election day and he can take credit for it. Voters wouldnt even remember the summer crash. i think this might be the secret plan. maybe last year was a practice run to see what a fall run did to consumer confidence... um votes. maybe we should look at obamas approval rating last election day  

Mon, 07/16/2012 - 20:08 | 2622303 bnbdnb
bnbdnb's picture

The pattern is the same because the same computers keep playing the same game.

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