The Green Candle of Hope

Last month, we wrote about the recent "Death Candle" for the S&P 500. Equity investors everywhere should be sure to note with extreme caution that history is once again repeating itself.

Before we begin, please take a few moments to review this post from last month:

Again, the previous two bull markets in equities ended with massive down months, shown as huge, red "death candles" on the monthly charts:

December 2000 saw a range of 9.72% and a final loss of 4.97%. Death Candle #1.

January 2008 saw a range of 13.72% and a final loss of 6.38%. Death Candle #2

And now August 2015 saw a range of 11.64% and a final loss of 6.67%. Death Candle #3.

But in the previous two occurrences, the painting of the death candles DID NOT send the stock market immediately lower. The bear markets of 2001 and 2008 both began with "dead cat" bounces, instead. A "Green Candle of Hope", if you will...

January 2001 saw an upside move of 4.77% and a final gain of 3.28%.

April 2008 saw an upside move of 5.88% and a final gain of 4.45%.

If October or November of 2015 follow the pattern, we'll see an upside range of about 5.5% and a final gain of approximately 4%. For October, with a starting point of 1919 on the S&P, this implies an intra-month move to between 2020 and 2040 with a close back down near 2000. Another Green Candle of Hope.

Additionally, the bounces of both January 2001 and April 2008 failed at resistance near what had been support. An October or November bounce in the S&P to 2020-2040 would again follow this exact same pattern. See below:

Let's wait to see if October and/or November play out as expected before making any further predictions and forecasts. However, as a preview, here's a reprint of the chart that accompanied the original post last month. Note that the previous bear markets each saw drops in the S&P of greater than 50%. If history does, in fact, repeat itself in late 2015 and early 2016, we'll be looking at a drop in the S&P 500 back toward 1,100 or even 1,000. Do you see now why we caution equity investors everywhere to proceed with extreme caution?

Prepare accordingly.



boomer sooner's picture



G-Rod's picture

For the ASX 200 in Australia

You can try ASX:BBOZ, ref!/BBO

Leveraged reverse ETF. I have some right now as insurance for precisely this scenario.

Turd Ferguson's picture

For Vault subscribers


Please remember that there will not be a podcast today.

4 oz's picture

Have heard it said~~~

Have heard it said---

That in the New Testament the word -Hope- appears 365 times; Meaning ---there is -Hope- for every day.

philly's picture

Top 5 ...that is all!

Top 5

...that is all!

hammerman's picture


no turdcast today....

simjojim's picture

Value everything in

silver ounces.  Trust me, you will quickly realise how cheap silver is compared to everything.  For instance, what would you prefer, a nice silver ounce coin or a large pizza?  Rent a shit movie or two or buy a shiny ounce of silver?  

AIJ's picture

Value in Everything...

...or buy one ounce of gold or buy 75 ounces of silver...

LostMind's picture

Cray Cray weekend of nutso evernts

Thanks for bringing back the calm Craig!

Orange's picture

Orange back home

What a long weekend wedding. Rain, rain, rain, and more rain. Left yesterday and its still raining in Charleston.

Couldn't go south on the 17 as we had to turn back as a result of flooding. Headed down the rain funnel towards Columbia and about a 60 mile detour. Finally headed south on the 95 and the rain either stopped or was a drizzle after 30 miles. Lucky, as my brother headed north on the 95 and was forced off due to 30 miles of the 95 being flooded. He took small roads and carefully navigated those flooded roads and successfully got out.

Both my children live in Columbia and were told there homes were not flooded but they would not be able to reach them. My son is off on his honeymoon today, hopefully his flight is not canceled and my daughter will stay in Charleston until she can return.

Back here if Florida I wake up to blue skies and sun, wow, what a beautiful sight.

Happy to be back and looking at silver exiting its' own storm, let's make it a 1 in 1000 year event. 

bookers126's picture


Wow, GSR at 73.2.  Some algo progammer is gonna get its butt kicked today!!  

4 oz's picture

RE: Value everything in

Am seriously underwater on Silver. Began stacking in Feb 2011 and have coughed up as much as $52 for Silver Eagles back in April of that year. (Of that $52, $7.50 was premium, spent without hesitation.)

Have stated many times that I know people will pay that–because I did it!

Also have expressed many times over the last year or so that -Availability- was my greatest concern moving forward as a regular/faithful stacker. Was plain as day that the time would come when it would be tough to get Eagles or Maples; Having decided they were the two Silver items to stack back in my embryonic days.

I haven’t seen a Maple in a display case in 1/2 a year and last picked up ASE from a LCS at least two months ago. Have added using online dealers since and have no problem  paying today's premium….sheesh, still under $7.50!

So as I do the math, both spot and premium are still very much in the “reasonable” range.  Silver is still very much on sale. Long ago began counting ounces as my, ‘way of measurement’ I can still add under my overall DCA and will continue to do so.  My point is–just as  you can see the leaves change, you know winter will in fact come. Could easily foresee that  availability   would become the issue one day; And I submit that day isn’t here….. yet. 

Chiron's picture

Gold this AM!

Drive-by shooting antics last night (usual Sunday night raid) push gold down to back-test the breakout on last Friday.  

I have drawn a line connecting the recent tops of 5/18, 6/18, 8/21, and 9/18.  The breakout, on 9/24 to the upside, broke this line.  The antics of the peri-BLSBS week (smashing gold up to the announcement because the number was known to be very bad) drove gold back down.  Then Friday it broke out to the upside again.  

So, green this AM!  That is pretty rare to actually start out the week in the green.  That means the usual Sunday night mood setter is having less and less of an effect.  

Wearing rose colored glasses while high on hopium, but I like it!  

Close today above $1142 would be nice.

ratioarbitrage's picture

Backwardation as an immediate price signal

I have noticed (and mentioned on here) 3 occasions in the last couple of weeks when the level of backwardation has risen by about 1.5 cents *without a significant price rise*. All of these have been followed by a "pop" in price of various sizes - 50c to a dollar. Dates were Sept 16, October 2 and today - those are just the ones that jumped out at me without looking too hard. Because I watch them for a few hours before posting about them, it has felt as if my "backwardation is up" comments are followed almost immediately by the price rise.

If YOU were an institution aware of tightness or demand and looking to ride a pop, but also with HFT capability to keep price down a bit for 12 hours or so while you load up, would you do it? Of course you wouldn't, but one or two of those guys may not have the moral fibre of Turdville. So the price is held back for long enough to buy the contracts (or close the shorts) - this suppresses the price of the futures contract but does not affect the price of cash silver -> backwardation. They load up, then stop the algo and bingo.

This is speculation, not trading advice!

LostMind's picture

Maybe I'm missing something?

Glencore is going down the crapper and the TBTF banksters are about to lose their free lunch; would you not push up the price of commodities to stop the bloodletting?

Maybe that's to simple, but a $1-2 an ounce bounce on silver would not necessarily hurt the FED, but would assuage the pain of those their in cohorts with?

Any sense to the great minds of Turdville?

Libero's picture


Who really knows what drives the price of silver/gold. Many believe it's just High frequency computer algo trading tied to the Us-Yen exchange rate. Many believe it's the "bullion" banks who manipulate the price. What I know and to agree with you. It is not good for the world's economy to see a Glencore bite the dust because it would mean many dollar losses for everyone. If gold/silver/oil continue to get beaten down below the cost of production then many companies will close shop (albeit temporarily). All those development and exploration loans made by the banks will be in danger of default, so yes... it would be in the bankster's interest to drive the price higher. Hooray, we turdites will be on the same side as the banksters!

Pretty nice that silver is above 15.60. smiley

ratioarbitrage's picture

The GSR trend channel

... is a thing of beauty and grace, straight as a die, up from 30 to 80 over 4 and a half years. And it appears to be breaching.

Any people with a name similar to mine who were intending to exchange yellow for white at 75, may have missed their very ample opportunity. Or - in the way of things - I imagine they may get just one more chance, if they are quick and as long as they do not want coins.

Chiron's picture

Outside reversal candle

Looks like the bastards are trying to paint an outside reversal candle on the daily gold chart today.  Amazing how something that looks so positive can be "managed" to slightly bearish with just a few ticks.  I will keep throwing the dice on the miners and betting on honest weights and measurements eventually winning over, but this is driving me mad!  

At least the miners are still slightly green today (for now).  Just as an observation, did you see how the wedge of GDXJ this morning was broken to the downside this AM?  GDXJ is still being held to roughly half the gains of GDX, based on percentages.  But this is just "normal trading" though.

ancientone's picture

Silver shortage from EU perspective


From a European commentor on SGT Report:

Greetings from Europe
I spoke with my local bullion dealer who provided me with some colour on the Silver market situation as it impacts him. He’s what he had to say:
• There is a major backlog of the ability to produce “blanks” as pretty much all available inventory of Silver for this purpose (prior to minting the coins) was depleted several months ago.
• As times for delivery of products have increased, the feeding frenzy (driven by spot price going lower) has continued.
• Although he won’t get any ASEs until December (and has sold them all anyway) he’s selling ASEs for $10 over spot all-in!
• Here in EU the Germans and Austrians are big buys of Silver. Most of the demand for his ASEs has come from a significant up-tick in orders from Germany. The Austrian mint is now trying to address its production issues too, hence the ASE demand from EU:
• The current situation will not improve anytime soon as there is a medium to long term manufacturing output issue building up. ASEs and Maples cannot be made quick enough to meet demand and this is made worse with the “blank” production issue.
• Without immediate investment in production equipment, there is a danger that the physical market has now “properly” disconnected from the paper price. You cannot make 20 million coins a month on a 5 million infrastructure. This is likely also one of the reasons recent stories have surfaced to suggest the US mint is looking to outsource production to Sunshine.
Assuming this information is accurate, any “removal” in size of 1000oz bars from such stores as the COMEX will make this production “Bullwhip” effect far, far worse. Also, in relation to your interview with Doc and Dubin, it seems to me that due to the factors suggested above, it makes perfect sense that the Perth min run out of Kangaroos so quickly. Perhaps it won’t be long before we’re not able to get our hands on our favour coins!

indiana rod's picture

What's wrong with the economy

Bernanke said 'there's been too much reliance on the Fed.'

Now you tell us.

Orange's picture

Death Candle

Gold and silver both went down after the 2008 death candle. They have both been battered this year. So do I take a short term gain in uslv, getting close to 20% or wait. Not sure, they could sky rocket this time as all confidence in the system may have been lost.

Anybody think a terrible Tue. will happen over night and we get back to the $14's

AGAU's picture

missing something

or maybe get  their foot off the necks of the miners  that would deflect some of the money going into physical?

realitybiter's picture

Coupla things

1)  The last thread became a cancer discussion if anyone is interested....

2)  The economist cover.

​pretty wild.  There is a lot of speculation about meaning...who knows.  I enlarged it and found a couple of interesting tidbits:  In the very back their is a muslim terrorist with an AK, and the strap crosses the magazine, exactly, like a mason thinks this is just a statement that the masons, the neocons, are running the terrorists....we have been busted funding them, us being US...over and over and over....

what is with the piggy bank taking off, out of Camerons chest?  savings flying away????

what about the flat tire, which can no longer function, on the land speed jetpowered device?   Clearly, the sponsors are NGO research organizations.....end of big gov?

Alice in Wonderland - what is the pile of dirt?  yellowcake?  Their is clearly a mushroom cloud in the background....does she somehow stand in front of the arrows, lobbed on 11/3 and 11/5....or is it 11.3 and 11.5, meaning 11/9 and 11/15?  She is looking right at the PTB, protecting the ball with the stripe...

also, the ghost behind Obama, with the holiday brochure....on vacation over halloween?  what??

realitybiter's picture

Should be shown in today's Civics Class

Man/boy love Thursdays!!  Heroin for all!!  The war on terror will go on forever!!  (unless the Russians carry it out and it will take 72 hours) 

Who are the good guys?  The bad guys?

Ours is not to wonder why?  Better start wondering.

IBB going negative now.  barometric.  Storm coming.  

Ozymandias's picture


I'm a slow learner but if I understand about the dollar yen ratio that our leader has been talking about then it looks like today is another day when the ratio seems to be explaining the market moves. Am I seeing this correctly? At least Turd has me checking the ratio. 

LostMind's picture

Interesting 25 minute interview

Very interesting thoughts...

Gramp's picture

orange. ..

Ring the register brother! That is my first thought! Your move may vary... I know nothing lol

braincramps's picture

sad but true

LostMind's picture

SD NOW has Maples for sale

Would the fact that these are now worth an extra dollar an ounce have anything to do with the new ANY QUANTITY $3.49 an oz over spot....

Just thinking out loud. Everywhere, NO SILVER to be had. Silver runs up a $1.00 an ounce and low and behold, there is NOW silver AVAILABLE in ANY QUANTITY!!!!!!!!!!!!

Also, please feel free to buy as much as you can afford because there is limited supply! ANY QUANTITY

Not trying to be a jerk, but this type of stuff just makes me feel like I've been lied toooooo.

Joseph Warren's picture

@ realitybiter - Re: Should be shown in today's Civics Class

thanks for posting that. Excellent video

Tyranny won't be enacted by the psychopaths at the top. (Look at them. Most of them are little, fat, old, and wimpish toads.) They aren't physically capable of making that happen. -  Tyranny would only be created by the blind order followers, using the 'I was only doing my job' excuse. 

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