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