This is a picture of the incredibly tight correlation between the price of wholesale gasoline and the yields on 10-year U.S. Treasury Bonds. I've suggested before that this may be due to the fact that unleaded gasoline is a perishable commodity and thus its supply is most tightly coupled to the short-term economic outlook, but I don't know. It's interesting though, no?
This is a picture of KOL, an ETF comprised of coal related companies. Though most markets are exhibiting classic technical analysis resistance patterns, this chart wins the award for pristine textbook example. (If your new to T.A. here's a hint... ignore the bullshit. All you need to know are 'Resistance can become Support', the Head and Shoulders formation (on long-term charts only) and 50 & 200 day moving averages. Everything else is worthless.)
By the way, maps show you where to go. Charts show you where not to go. This is important.
Anyway... the consumption of coal has sky-rocketed this year relative to oil because it is a much cheaper alternative. There are some posts on my favorite economics blog, gregor.com, related to this subject which are excellent for both the quality and inventiveness of Mr. Macdonalds' writing and the accompanying charts. In addition to his theories on our current inflationary depression ("compartflation,") today he made the bold and sensible prediction that, "It was only 55 years ago that the world crossed over to use more oil than coal. In another five years, we will be going back to coal." Here is a link to a post of his with jaw dropping charts of recent trends in world coal consumption.
[btw/fyi... Gregor Macdonald, George Cooper, Satyajit Das, Bill Gross, and Mr. Soros (back in his prime)... the smartest guys in the proverbial room]
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