The global markets are a never ending puzzle that we're all trying to solve. There is never a straight answer because everything is always changing. At different points throughout the never ending evolution of markets, I have what think at the time to be the most important chart in the world, or at least one of them.

Today I believe that we really need to be watching the spread between the U.S. 10-year Treasury note yield and the U.S. Treasury 2-year yield. With 10s currently at 2.18% and 2s at 0.99%, the spread is now at 1.19. This is has been cut in half, and then some, from last year's highs of 2.61. Us market nerds call this a flattening of the yield curve.

Here is the chart of the 10-Year U.S. Treasury Yield minus the 2-Year U.S. Treasury Yield:

Ratio analysis is one of the most valuable tools that we have as market participants. It's important to recognize where money is flowing out of, and where it is going into. This is the case when it comes to stocks, bonds, commodities and currency markets. A lot of these ratios tell us what the institutional money is doing, which is what drives markets. Think about the long-only mutual fund managers as a giant cruise ship. It takes a long time for a cruise ship to turn completely around and go in a different direction. With the amount of money being controlled by mutual fund managers, it's a similar situation. We can spot a cruise ship turning around very easily, because it takes so long. It's not much different in the stock market.

Today we are looking at a ratio of the Consumer Discretionary Sector vs Consumer Staples. The reason this is important is because of the high correlation between

Most of us in the trading and investing universe have the freedom to buy or sell anything we want, whenever we want. Sure, there are some exceptions out there like long-only mutual fund managers that have to pretty much be fully allocated at all times or certain funds out there that have to follow a specific mandate. The majority of us, however, can do anything we want, even if it's nothing at all.

How often do you hear someone on the TV or read in an article that the guru opining on the topic is suggesting that "doing nothing", is the best course of action. It's either a buy or a sell

When calculating risk in a given trade or investment, I find that opportunity cost is often overlooked. Remember, it's not just how much money you can potentially lose on a given position, it's the opportunity to make money elsewhere that you are missing out on while that position remains in your portfolio. This "Opportunity Cost", is the type of risk that we like to refer to as, "A waste of money".  Today I want to point out what waste of both time and money it has been to be in Bank Of America over the past 2 years. But things could be about to change...

There is a lot of noise surrounding the period between Christmas and the start of the new year. Santa Claus rally this, end of 2016 predictions that, what worked this year, what didn't..... The truth is, most of that doesn't matter and is just a lot of air-time filling, click baiting noise. Sure, if Santa Claus doesn't show up and the U.S. Stock Market doesn't rally during the last 5 trading days of the year and first 2 of January, bad things tend to happen. Fine. But end of year predictions are always wrong and they're just a sell side marketing gimmick that the financial media eats up and loves to promote. It's just noise. As far as what worked this year and what didn't - it's too late now anyway, so who cares. We want to look forward don't we? Aren't we here to make money?

What we really want to focus on during this period of the year is

As we close out 2015, one of the biggest stories of the year has to be the crash in Energy prices. The CRB Commodities Index is heavily weighted in Energy and, as an Index, has fallen over 20% this year now down almost 65% from its peak in 2008. Here is how I think we can profit from this in 2016:

This week I sat down with Frances Horodelski over at Business News Network to discuss the disastrous implications of a breakdown in the Dow Jones Industrial Average below last week's lows. Apple continues to be a 'sell on any strength' stock and an inversion of the yield curve is likely to come next year.

Here is the video in full:

This week I had the opportunity to join Joe Weisenthal and Alix Steel on Bloomberg's What’d You Miss? On this appearance I wanted to follow up on our Apple discussion over the Summer when I warned that a break of key support would lead to a much bigger problem. This is precisely what occurred in August and since then this stock has continued to be a sell on any strength. Looking bigger picture, Bonds keep outperforming stocks as they have for the last 2 years and still think this trade keeps working. We also touch on the yield curve where if 10s minus 2s break 1.20, then I think the next stop is an inversion of the yield curve.

Here is the video in full:

Technical Analysis of Stock Trends by Robert D. Edwards and John Magee is widely considered to be the Bible of Technical Analysis. Today I thought it would be a good idea to share with you guys Page 1 of Chapter 1, so you can see exactly what these guys were thinking when they first wrote the book in 1948.

Enjoy!

Since October 23rd, the Dow Jones Industrial Average has been a place where we've wanted to stay away. This was the day that it first crossed above what was then, and still is, a flat 200 day simple moving average. When prices are anywhere near a flat 200 day, we want nothing to do with it. For almost 2 months now, this index has been stuck in a tight, yet volatile range, frustrating both the bulls and the bears along the way. But after the dust has settled, prices are exactly where they started on October 23rd. To me, it's the perfect example of why we avoid these sort of situations. Who needs that headache?

The problem that I see moving forward