Here are some of the most noteworthy new highs and lows across the markets for Friday, December 6, 2019.

Consumer Staples SPDR $XLP Hitting New All-Time High

Brazilian Bovespa Index Hitting All-Time Highs

Denmark’s $OMX-C20 Index Hitting All-Time Highs

Coal ETF $KOL Hitting 3-Year Lows

Nat Gas Fund $UNG Plumbing All-Time Lows

If you’d like to see these charts as they come out in real-time, follow us on Twitter and StockTwits. And if you’re interested in the daily “all-access” version of all our charts and research, please check out our site, The Lyons Share. You can follow our investment process and posture every day — including insights into what we’re looking to buy and sell and when. Thanks for reading!

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An index of coal-related stocks is hitting key long-term resistance.

Aside from banks and other stocks related to the housing market, another poster child of the last cyclical peak in stocks a decade ago was the resource space. And perhaps most notorious among that group was coal stocks.

From 2002 to 2008, coal stocks, as measured by the Dow Jones U.S. Coal Index, enjoyed an epic rise, increasing roughly 20-fold. However, the old saying rang true, at least in this case, about the bigger are, the harder the fall. And from its peak near 750 in June 2008, the DJ Coal Index would proceed to lose some 85% of its value in the next 5 months alone.

After bottoming in the fall of 2008, coal stocks would rebound over the next couple of years. By April 2011, the Coal Index had recovered 61.8% (for you Fibonacci fans) of its 2008 decline. Then it was back down the shaft, so to speak. By mid-2013, coal stocks were back at their 2008 lows, and by early 2015, they were breaking down to new lows.

In January 2016, coal stocks finally found a bottom. At a low of around 11, when all was said and done, the Dow Jones U.S. Coal Index had lost a total of more than 98% from its 2008 high. Ouch. The index would recover throughout 2016, though, quintupling to 55 by December (a move that trimmed the total post-2008 loss to just 93%). It’s been back on the decline since, however.

This past June, the Coal Index had dropped to 33 before rebounding back up towards 42 this month. This 42 level may precipitate another drop down the shaft for coal stocks, though. That’s because it represents the current vicinity of a Down trendline (on a log scale) stemming from the index peak in 2011 and connecting the top in 2014.

The Coal Index has already dropped a bit from the trendline touch earlier this month. The fear is that, should the index fail to break above the trendline, another trip down the shaft may be in store for coal stocks. Of course, should the index succeed in breaking above the trendline, it would open up considerable upside for coal stocks. Who knows, it may eventually even bring that drawdown back under 90%. Either way, this trendline should be key.

If you’re interested in the “all-access” version of our charts and research, please check out our new site, The Lyons Share. Considering what we believe will be a very difficult investment climate for perhaps years to come, there has never been a better time to reap the benefits of our risk-managed approach. Thanks for reading!

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It does not take a degree in engineering to understand that Crude oil can provide energy.  The diagram above shows pretty simply how it can work.  There is a clearly defined relationship.  But the relationship between Crude oil and the Energy Sector ETF is a bit more complicated.  The chart below shows the recent history.  

The price of the Energy ETF ($XLE) against the price of Crude Oil went through an interesting transition.  As Oil prices cratered in late 2014 the ratio rose quickly.  It retrenched over the first half of 2015 and then rose again to complete an AB=CD pattern at the beginning of 2016.  This pattern looks for a reversal to follow and the ratio obliged.  It retraced almost 61.8% of the pattern into mid-2016.

The following chart will have you thinking.

Did someone know Trump was going to win? Or was it a calculated risk-reward investment? Or just pure coincidence?

Hillary Clinton once made waves, during her campaign, with the following sentence:

“We’re going to put a lot of coal miners and coal companies out of business.”

You might think quotes like this would have hurt coal stocks and the entire coal sector. But let’s take a look at what the market did despite this quote. What you’re about to see is the largest coal ETF in the stock market and how it performed over the last year, heading right into the election:

A brief sampling of the best, worst and toughest financial markets of 2015.

Like any year, 2015 had its share of good markets (mainly stocks in or related to F.A.N.G.), bad markets (essentially all commodities, currencies, most bonds and the majority of stocks) and the ugly (most actively managed funds). Among the market segments and indices that we track, today’s Chart Of The Day presents the winners of each of the three categories this year (through 12/30/2015).

The Good: On the heels of a 40% jump in 2014, Venezuela’s main IBC Stock Index was up a cool 280% this year. Although, due to currency devaluation, you’d be lucky if you kept any of those 28,000 basis points.

The Bad: Coal stocks were an example of another trend that persisted this year. After closing 2014 some 87% off of its 2008 high, the Dow Jones U.S. Coal Index lost another 80% in 2015. That’s why we don’t go bottom-feeding when selecting investments.

The Ugly: There were much worse markets in 2015, but the S&P 500 was just plain ugly for anyone trying to figure it out. For one, as of the 2nd to last day of the year, the index was exactly 0.2% away from its 2014 closing price. Furthermore, along the way, it suffered stints of maddening behavior.

From February 3 to August 19, the S&P 500 never closed more than 2.2% away from the 2085 level, up or down. That’s over half the year, or 138 days! Then it dropped 11% in a week! Then, in one month (October), it gained back the entire decline!

On top of that, imagine you were using the 50-day moving average to stay on the correct side of the trend, as many traders do. Well, the index crossed up or down through the 50-day no less than 40 times -- on a closing basis! Good luck with that strategy.

In the end, we should not be surprised by the challenges presented by the S&P 500 in 2015. It is another example -- actually, the best example -- of a lesson we have written about several times. That is, the more popular an index or security is among traders, the less apt it will be to conform to traditional technical analysis -- and the more difficult it will be to trade. Just think of the other market participants in the index as competition. And what index has more competition in the entire world than the S&P 500? Everyone thinks they have to have an opinion on the S&P 500. A bit of advice, if we may: if you are just starting out in this trading thing, try trading something besides the S&P 500...anything else.

Anyway, here’s to another interesting year in 2016. You can bet there will be plenty more good, bad and ugly.

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Photo is a poster of the 1967 Sergio Leone film starring Clint Eastwood.

More from Dana Lyons, JLFMI and My401kPro.

In life, you never know who is going to get along with who.  You see a group of people and try to determine which ones pair up into couples.  Inevitably you end up getting some of them right but some are so far from what you think that it shocks you.  This can happen in the markets as well.  You hear about the inverse relationship between Stocks and Treasuries, and take it as a given until they start to move together.  

One of those weird relationships has been going on between Crude oil and the Shanghai Composite over the last 3 years.   Why would these two markets have any correlation?  China uses mostly coal for power, not Oil.  Yet there is a correlation.

The chart above shows the the Shanghai Composite, inverted, as the red line, and West Texas Intermediate Crude Oil as the area behind it.   There has been an extremely tight negative correlation between the price of Crude Oil and the Shanghai Composite.  They seem to move perfectly opposite.  if you had to pick which one is leading then I would put my bet on the Shanghai Composite with the drop in mid 2013 leading, and the current leg lower accelerating earlier.  

Whether China moving higher is leading Oil lower or it is coincident there is one thing to take away from this pair.  As China is breaking out to the upside again the move lower in Crude Oil is likely to continue lower, a long as this pair relationship holds.

Coal - Can the Republicans bring it back from the dead?

Most coal related stocks have not had the best of times the past few years! ACI,BTU, CLF (just to mention a few) are down over 85% from their highs.

The mid-term elections last week have stirred up some thoughts that the Republican party can bring coal back to life. 

The above 2-pack reflects the price of Coal (left chart) and the Coal ETF (KOL). I believe the price point for KOL is very important, as it is testing the underside of channel support as resistance, for the first time. 

Some of the coal names above have had some very volatile days over the past few weeks, as it appears this sector might have a few traders interested in nibbling at depressed levels. 

Knowing what the Republicans can or will do with this industry is well above my pay grade! Humbly, I do feel what KOL does at this resistance point could give us some sense of where the Coal industry is going in the near future!

Monday night I was invited to come on the technical analysis radio show Winning On Wall Street. We went over the Coal trade and followed up on some of the topics we’ve discussed on previous appearances.