Caterpillar Inc. (CAT) posted fourth-quarter earnings, and boy were they negative. Earnings came in at $1.08 per share compared with expectations of $1.31 per share. CAT also said it will be cutting 20,000 jobs (~11% of their workforce).

Sometimes equity investors have a habit of overlooking the bond/credit markets. But in times like these, when credit markets are tight, the states of corporate balance sheets become more important than ever and it becomes imperative for all equity investors to watch and understand the credit markets.

Take Suncor Energy (TSE: SU) for example. SU was Canada’s favourite oil and gas stock from 2004 – 2007. It is one of Canada’s largest oil and gas stock (by market cap), it produces almost 300,000 Boe/d, earns over $2 billion per year, and has probably the most ambitious plans for the Albert Oil Sands – plans that were originally estimated to cost ~$6 billion.

All three types of Triangle Chart Patterns are used all the time in technical analysis, this is because they are very common occurrences in charts. When a current trend hits a bit of resistance, there is a good chance a triangle pattern will emerge before it continues on its way. This is because triangles show a tightening of support and resistance, until finally one breaks through. Symmetrical triangles are called that, because they form the shape of a symmetrical triangle. (Did I just point out the obvious?). The ascending and descending triangles will have one straight line and one angled line, to create the triangle shape. The straight line is on the top for ascending triangles, and on the bottom for descending triangles.

The Rectangle Chart Pattern is a continuation pattern, which means once the pattern has appeared and the chart has broken out of it, the price will continue to travel in the same direction it was going before it hit the resistance. The Rectangle chart pattern can form in either a bullish direction or a bearish direction. Unlike most of the other chart patterns, the Rectangle doesn't always see a drop off in trading volume during the support and resistance phase, although, it does generally see a major increase in volume once the price breaks out from within the rectangle pattern. The rectangle pattern consists of Support and Resistance lines running parallel to each other with at least 4 points touching (or coming very close to) either the support line or the resistance line. As you can see in both Figure 1 and Figure 2, the price will be traveling in either a bull or bear direction, and then it will hit some resistance.

Flags and Pennants are considered to be Continuation patterns because after a relatively short period of time where the pattern shows up, the chart will continue to follow in the same direction it was going before it hit resistance. Flags and Pennants are generally grouped together because they both will usually appear after a rapid increase (or decrease) in price. this is movement is referred to as the flag pole. What happens next determines if we have a Flag, Pennant, or neither.

Welcome to the wonderful world of chart patterns! I have a strong belief that any investor that plans on looking at a stocks price chart should have at least a brief understanding of some of the more commonly used chart patterns. It doesn't matter if you are a short term investor or a long term one, chart patterns show up in just about every time frame you can think of. Why is this?