* Three Simple Charts That Tell Us... Everything

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There a lot of charts out there. I've posted dozens... But sometimes, it doesn't take a great scientific discovery or data mining to understand that what and why.

Here are the three simplest charts possible, and they really do tell us... everything (note that 2014 Q1 GDP was apparently a blip).

UPDATE
You can read this post (the bearish version) too: Three (More) Simple Charts That Tell Us... Something Else

Chart #1: S&P 500 vs. GDP, both indexed to Dec. 1 2007.

Provided by The Federal Reserve

I'm not claiming causality, but:

1. GDP goes up, the market goes up.
2. GDP goes down, the market goes down.

Chart #2: S&P 500 vs. Unemployment Rate

Provided by The Federal Reserve

I'm not claiming causality, but:

1. Unemployment rate goes up, the market goes down.
2. Unemployment rate goes down, the market goes up.

Chart #3: GDP vs. Unemployment Rate

Provided by The Federal Reserve

I'm not claiming causality, but:

1. Unemployment rate goes up, GDP goes down.
2. Unemployment rate goes down, GDP goes up. 

Why Do I Mention Causality?
Just because two things move in a pattern together does not mean one causes the other. If there is no causality, then there is a "lurking variable." One such lurking variable could be QE (as an example).

And the counterarguments to "everything is OK":

* Americans are Not Participating in the Economic Recovery or the Bull Market

* 10 Facts that May Rock Your World: Has the Last Year Been an Artificially Driven Stock Rally?


This is trade analysis, not a recommendation.

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