Candlestick Friday

Lots of textbook bearish reversal candlestick patterns to put on display today. They rang the bell this week, or lit the candle - whatever metaphor works best for you.
Candlestick Pattern Dictionary courtesy of StockCharts.com

APPLE - GRAVESTONE DOJI

BAIDU - GRAVESTONE DOJI

CHIPOTLE MEXICAN GRILL - GRAVESTONE DOJI

PRICELINE - DOJI

GOOGLE - SHOOTING STARS

BANK OF AMERICA - BEARISH ENGULFING

CITIBANK - BEARISH ENGULFING

MORGAN STANLEY - DARK CLOUD COVER

BERKSHIRE HATHAWAY - DARK CLOUD COVER

Been Down So Long

The way so many key charts line up with the S&P 500 / Gold ratio continues to amaze me. Banks, interest rates, shipping and international indexes - the correlations keep piling up.

S&P 500 / GOLD RATIO

SPAIN ETF

ITALY ETF

GOLDMAN SACHS GROUP

MORGAN STANLEY

DEUTSCHE BANK AG

RESEARCH IN MOTION LTD.

STAPLES INCORPORATED

10 YEAR TREASURY NOTE YIELD

BALTIC DRY INDEX

The Doors  - Been Down So Long

Max's Kansas City Fed

Calculated Risk makes incredible economic charts. Here's my take on the latest manufacturing report:

Kansas City Fed's Monthly Survey of Tenth District Manufacturers

New York Composite State Of Mind

No index screams "TOP!" more than the NYSE Composite. The DJIA has 30 stocks, the NDX has 100, and the SPX has 500, but the NYSE represents the collective price action of nearly 2000 corporations. "Painting the tape" is impossible with this one.


From the NYSE website:
"The NYSE Composite Index is the Exchange’s comprehensive barometer of it’s marketplace. It consists of all common stocks listed on the NYSE. This  broad-based benchmark represents 78% of the U.S. total market capitalization and 66% of the world’s. The index provides an exceptional breadth of diversification, as it includes U.S. as well as non-U.S. companies from a wide range of economic sectors. The NYSE Composite is also the least volatile of all major broad-based U.S. indexes, resulting in the highest risk adjusted return on a three, five and ten year basis. It has 90% correlation to the overall U.S. equity market"

NYSE MONTHLY

NYSE WEEKLY

NYSE DAILY

SPDR S&P BRIC 40 ETF
Brazil, Russia, India & China:

COPPER FUTURES
Note the similarity to the BRIC chart above:

INVERSE VOLATILITY

iSHARES iBOXX$ HIGH YIELD CORPORATE BOND FUND

Billy Joel - New York State Of Mind

Getting Nasty

Ike Turner & The Kings of Rhythm - Getting Nasty

One of the best piano songs ever:

THE VIX

Get ready for wave D:

The Dollar And The VIX

UUP US DOLLAR ETF - VIX VOLATILITY INDEX
There's a correlation here:

NYSE COMPOSITE - INVERSE VIX

GOLDMAN SACHS / VIX

VALUE LINE INDEX LONG TERM

The Carrot And The Tech

"Carrot and Stick is an idiom that refers to a policy of offering a combination of rewards and punishment to induce behavior. It is named in reference to a cart driver dangling a carrot in front of a mule and holding a stick behind it. The mule would move towards the carrot because it wants the reward of food, while also moving away from the stick behind it, since it does not want the punishment of pain, thus drawing the cart."
"Cheering the comeback of the stock market, Greenspan tells NBC's 'Meet the Press' that a rising stock market will do more to stimulate the economy than any of the remedies now being discussed."

NASDAQ 100

"Most of us believe that the best way to motivate ourselves and others is with external rewards like money—the carrot-and-stick approach. That’s a mistake, Daniel H. Pink says in, Drive: The Surprising Truth About What Motivates Us, his provocative and persuasive new book. The secret to high performance and satisfaction—at work, at school, and at home—is the deeply human need to direct our own lives, to learn and create new things, and to do better by ourselves and our world. "

Dan Pink on Limits of Management by Carrot & Stick

VOLATILITY INDEX LONG TERM

I guess there's nothing to worry about. Be happy.

VALUE LINE INDEX

Nicole Is Cool

I'm quickly becoming a huge fan of Nicole Foss and her awesome website The Automatic Earth. Somehow hearing the deflationary debt bubble collapse scenario being explained by a woman makes its arguments even more compelling. She had me at "on May 2nd of last year the trend has changed [reversed lower] again".


Here's a great interview with Nicole where she succinctly spells out what's happening:

Part 1

Part 2 

Part 3

Apparently Bob Prechter has come out of hiding. Many thanks to Jim Puplava of Financial Sense for that. Here he is:

Robert Prechter: Signs of an Impending Credit Implosion

And Paul Farrell is always fun to read:

10 reasons Wall Street will hit bottom, crash

This Market Is Going Down - Down, Down, Down...

NYSE COMPOSITE

DOW JONES TRANSPORTATION

GENERAL ELECTRIC CORPORATION

ORACLE CORPORATION

FEDEX CORPORATION

FORD MOTOR CORPORATION

GERMANY ISHARES ETF

JAPAN ISHARES ETF

INDIA BOMBAY STOCK EXCHANGE 3O SENSEX INDEX

3 MONTH T-BILL DISCOUNT RATE

Fun With FRED

Thanks to Business Insider the team that runs the awesome FRED charting website finally got the recognition that they deserve today. The St. Louis Fed web geniuses have helped a lot of us take our technical and economic analysis to a much higher level. Great job, guys. Love the site!

Here's the story: THE MOST AMAZING ECONOMICS WEBSITE IN THE WORLD


Clearly their Create Your Own Data Transformation feature ranks as my favorite thing about the site. They took a page out of StockCharts' playbook (ratio analysis) and made it possible for chartists to easily deconstruct headline-nominal economic data.
Like this:

GROSS DOMESTIC PRODUCT / GROSS FEDERAL DEBT - EFFECTIVE FED FUNDS RATE

Rack up tons of debt & have your borrowing costs plummet - the perfect crime:

Real Bear Market

If you enjoyed my chart of the S&P 500 priced in Consumer Credit (Debt), then you'll love this one. Priced in Public Debt the stock market is basically crashing.

S&P 500 / TOTAL PUBLIC DEBT

And what's up with this - the SPX / Gold ratio is almost a mirror image of the Morgan Stanley chart. The SPX won't buy you an ounce of gold, and a share of Morgan Stanley won't buy you an ounce of silver.

S&P 500 / GOLD FUTURES

MORGAN STANLEY

SILVER FUTURES

COPPER FUTURES