The Door Slams Shut?

Since August of 2015, we've been following the decline in U.S. equities and marking the similarities to the previous market collapses of 2001 and 2008. We'd suggested last autumn that there was one, final indicator that we needed to see before issuing a final warning. Well, here you go.

Before proceeding, I urge you to review the link below. For proper context, it is extremely important that you do so:

And, again, this update comes with the same caveat/disclaimer that we've included in each of these posts since August:

<All of this comes with an important caveat. Though there was certainly some Central Bank market manipulation in 2001 and 2008, it was NOTHING compared to what we see today. Will cycles and history be too much for the CBs to overcome? Instead, will their almost daily interventions be able to stem the tide? We're about to find out.>

Next, a copy-and-paste recap of the S&P action since August and the eerie similarities to 2001 and 2008:

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December 2000: Range was 9.72%. Final loss was 4.97%

January 2008: Range was 13.72%. Final loss was 6.38%

August 2015: Range was 11.64%. Final loss was 6.67%

Pretty startling similarities, wouldn't you say?

We then projected an October-November rally based upon the Green Candles of Hope in 2001 and 2008. These previous Green Candle bounces produced the following gains:

Late December 2000 - January 2001: S&P rally from 1254 low to 1383 high. Total gain of 10.3%

March 2008 - May 2008: S&P rally from 1257 low to 1440 high. Total gain of 14.6%

Late September 2015 - November 2015: S&P rally from 1872 low to 2099 high. Total gain of 12.1%.

As you can see, the market action in late 2015 was eerily similar to what foreshadowed the massive bear markets of 2001 and 2008. So, do the similarities continue? See for yourself.

After the Green Candle of Hope is early 2001, the market's bubble finally burst as the month of February 2001 saw a total S&P range of 11.7% with a final monthly loss of 9.2%.

After the Green Candle of Hope in the spring of 2008, the market's bubble finally burst as the month of June 2008 saw a total S&P range of 9.4% with a final monthly loss of 8.6%.

After the Green Candles of Hope in late 2015, did the market's bubble finally burst? The total S&P range in January was 11.1% and the total monthly loss was 4.8%. However, without the startling announcement of negative interest rates by the BoJ on Friday...spiking the USDJPY and taking the S&P futures with it...the total loss for January would have been 7.1%.

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We first published the chart below on 12/1/15. Please take a good look:

The following text accompanied the chart that day:

"In both 2001 and 2008, the door was slammed shut and the S&P collapse began in earnest when the 6-month moving average bearishly broke through and moved below the 24-month moving average. On the chart below, you can see that this occurred immediately following the previous "green candle" periods. And, once this happened, all heck broke loose."

So, has the door slammed shut? Is all heck about to break loose? Well, according to the criteria laid out above...yes.

Below is your latest, updated S&P monthly chart. If you look closely, the 6-month and 24-month moving averages have, indeed, bearishly crossed:

So, where does "the market" head from here and what should we expect next? Well, if history is any guide AND, given all of the similarities to 2001 and 2008, perhaps you should consider the following:

  • The 6-mo crossed the 24-mo in early February of 2001. The S&P 500 began that month at 1365.67. March of 2001 saw an intra-month low of 1081.19. That's a drop of 21%. With the bear market now well underway, the decline continued into October of 2002, ultimately reaching a low of 768.63. This marked a total drop from the MA cross point of 43.7%.
  • The 6-mo again crossed the 24-mo in May of 2008. The S&P 500 began that month at 1385.97. July of 2008 saw an intra-month low of 1200.44. That's a drop of 13.4%. With the bear market now well underway, the decline continued into March of 2009, ultimately reaching a low of 666.79. This marked a total drop from the MA cross point of 51.9%.

If history repeats itself yet again...as it has with the recent action of last August, last October-November and again this past January...then we should now expect:

  • A decline in the S&P over the next 60 days. This decline will very likely be in the 15-20% range, projecting a low near 1650 or so. From there, if the pattern continues, the S&P will continue lower, eventually falling to near 1100. Which, you'll notice, was our original forecast back in August of last year.

Again, though, all of this comes with the caveat/disclaimer listed at the top of this post. Perhaps you should re-read it now. However, past history sometimes IS an indicator of future results. Therefore, we'll conclude today's update with the same warning we issued a month ago:

At the end of the day, what you do with this information is entirely up to you. If you own stocks, ETFs and/or mutual funds in your regular accounts, IRAs and 401(k)s, it certainly appears that NOW is the time to be VERY cautious as history suggests that a major bear market in stocks is on our doorstep. Perhaps it would be prudent to take some time to review your current asset allocation and measure it against your risk tolerance and investment/retirement timeline. If another 50% drop in the "stock market" would decimate your accounts and ruin your retirement plans, it might be wise to consider taking some action before it's too late. Hope in central planning and central banks cannot keep global equity markets afloat indefinitely. Our study of chart candles and market history suggests that the next central bank "policy failure" may be right around the corner.

TF

71 Comments

gazzmann's picture

Is this a 1st?

1st

boomstick's picture

we're doomed

first?

Edit: GAZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ!

joeblack's picture

If you follow the metals

a subscription to Craig's website is the best $10 a month you can spend.

cashonly's picture

fourth!

Yes! a the coveted fourth position! 

I'm climbing up in that ol' silver recliner right now!! (before Marchas swats me right off of it and takes his rightful spot!)

LostMind's picture

Top 5 -- Got to watch this Trump video

Edit:

This video is a comedy nail regarding Trump. I do not endorse, nor not endorse Trump. But the video is funny and quite funny and sad when you think about it...

GoldenWizard's picture

Stock Market Drop

Lets face it, if Gold and Silver are to have any chance of breaking out to new all time highs the Stock Market must complete this drop, otherwise we PM holders are in for a rough ride. 

Turd Ferguson's picture

For aggressive traders

MODERATOR

Where would ole Turd look to get short? See below:

Marchas45's picture

Dang It

As soon as I step away from my desk he posts a thread. O! Well at least I'm looking for deals. Keep Stacking

jchantel's picture

Getting interesting for sure!

This is going to be a year for the history books!

Marchas45's picture

Just Asking

So what effect will the collapse in the S&P have on the metals?? If any, if they can still manipulate the charts?

tyberious's picture

Perth Mint Silver Sales Top

Perth Mint Silver Sales Top One Million Ounces in February

by Louis Cammarosano

Perth Mint Silver Sales Topped One Million Ounces For the Six Month In A Row. February Perth Mint silver sales of 1,049,062 ounces were up 168% year over year. Silver Kangaroo bullion coin continues to drive massive silver sales. February Perth Mint gold sales of 37,063 ounces were up 15.9% year over year. Silver Sales […]

Read more of this post

cashonly's picture

Question for ol' Turd

where the hell does the 'juice' come from in this market?  I get the algos, the USD/JPY but who's money that is backing these algos?

LostMind's picture

@cashonly --- the digital printing press

all markets are hyper-inflated... Hyper because it has been ALL FAKE money, digitally created to PUMP UP THE VOLUME

edit:

Which is friggin insane!!!! All that FAKE money is has done nothing but cause MORE DEBT for "someone"?!?!?!?!?!?!! Any guess who that someone is? Or who that someone WON'T be??!?!??!?

When the markets crash, it will wipe out ALL the hyper inflation that was BOUGHT AND PAID FOR BY FAKE MONEY! Then "WE" will OWE SOMEONE that money back..... UGHHHHHH need excedrin.....

Dr Jerome's picture

Central bankers meet Darwin

Good morning fellow stackers & traders.

I bought DUST nine days ago cause I did not want to miss out on the forced correction in Gold to ease pressure in the COT.  So far, my returns are negative, but approaching flat perhaps later today. And I am thinking I do not want to be in front of a gold bull if price breaks free from this capping.

How does one predict the desperate actions of banking criminals trying to save their system? (rhetorical question).

I may have a decent exit opportunity from this underwater position later today. Or will gold really get slammed down out of this pennant and I'll regret getting out. But I sense the tide has turned overall and at some point soon, I want to be long.

Ooooh--Yen over 114 briefly!  Oil making a new recent high. Gold held down. This is crazy.

Krugman: "We gotta get this economy going again! Moar central bank intervention!"

happy stacking

Turd Ferguson's picture

AHA! Now there's the question!

MODERATOR

"who's money that is backing these algos?"

Follow me down that rabbit hole and you'll soon discover why I consider it all a sham/scam/illusion.

Fatso's picture

canadian spends 6 weeks in Kona, HI

Causal observations

very few high end cars, lots of "garbage" cars

many homeless people sadly

very nice people but generally a 3rd world feel. Did not meet anyone local who knew the HI state was introducing a new constitution.

general businesses and real estate seem to be doing poorly

high food/restaurant  prices. no problem getting into better restaurants during prime time without reservations

the paper currency is garbage quality with many torn bills

I would not want to be in the USA during a currency crisis, was relieved to get out  and suspect that I will not be back.

Sorry if this was a stupid post

matt_'s picture

I started adding mining shares again

I used profits from selling covered calls on my mining shares to buy more today.  Its probably too early to start buying the miners again, but I am afraid the BLS report Friday will send the mining shares higher.  I've been extremely lucky with my brokerage account over the last two months.  Undoubtedly my lucky streak will end soon. sad

cashonly's picture

Thanks Turd, I'll be following you down that rabbit hole

by the way did anyway see what they did with the Fed Gov accounting?  they have created a bank balance sheet with it, so to speak:  The US gov is now booking all student loans it holds as an "ASSET"!!!

Lost Mind:  I wouldn't bet against your answer.

AIJ's picture

Being in the USA during a currency crisis

The good thing about being in the USA during a currency crisis is that so many more good guys have guns. It seems that everywhere else the bad guys with guns outnumber the good guys.

Turd Ferguson's picture

And this is about as blatant as it gets

MODERATOR

There is no "stock market"....at least not in the sense that 99% of the population thinks there is.

In 2016, your "stock market" is nothing more that HFT algos that buy or sell S&P futures based upon movement in the USDJPY. Don't believe this? See below (USDJPY in candles, S&P futures in bars):

ag1969's picture

The $100 dollar bill

So all this talk of getting rid of the $100 bill reminds me of something I read not too long go where someone (I forget who) was asked, "If we get rid of the Federal Reserve, what would we replace it with?"

And the answer was, "If I cut a cancer out of your body, what would you replace it with?"

Can't we kind of sort of maybe apply the same rule to the $100 bill?  I still don't think this is going to happen because of the aforementioned reasons paying off Judges and Politicians, Paying the ISIS and Al Queda Payroll, Hookers and blow, etc., but does anyone else find it ironic that in just a few short years, all of the talk has gone from minting a trillion dollar platinum coin to getting rid of $100 dollar bill?

I have no idea where I am going with this, but these are the things I think about.

Turd Ferguson's picture

Absoultely priceless

MODERATOR

No comment needed.

J Siefert's picture

What's so special...

about 114? (USD/JPY)

I can't understand how sometimes it sticks to one level.

SS121's picture

Investor money was behind Bernie's Algos...

Until the investors learned there really weren't any Algos.

The world is yet to learn the truth behind the great hoax called "the markets"

Bernie's clients received monthly statements along with BM's official stories of Algos, ...and there were even controlled opposition stories of how Bernie was using his Algos to front-run his corporate clients.  But it was all a hoax.  The monthly statements were just manufactured data with amounts set to best control the investors.

The world is still receiving their daily charts with official stories of Tyler Durden's picture Algos, ...and there is even controlled opposition with it's stories of how cartels and banks are using their Algos to "manipulate" prices.  But it is all a hoax.  The charts are programmed fakes with prices set to best control the masses.

Stu's picture

The World is Awash in Oil

Great Post Craig--

Been following $/Y closely along with oil.

Now here is the strange part of the equation but it matches perfectly with the gold manipulation--only in reverse.

The world is awash in oil. Fair market value according to some involved in the industry should be about $26-28 per barrel, but lo and behold, here we have a last at $34.50 up $0.75 on March 1st at 9:30 PST.  That's strange. One would think the price would be moving downward, all other things being equal.

Working hypothesis: The banks are propping up oil much as they are pressing down on the PMs using naked shorts (or longs) as the case may be. Algos need to be moved and by George moved they will be--come hell or high water!

It is so filthy in these markets it is now beyond the pale. They wreak of desperation--too many balls in the air and everyone appears to be losing confidence in the CBs.

I've been preoccupied  and have four projects under way.  I only recently caught the post by California Lawyer "Show Me the Note, Yvanova etc." posted last Friday, February 26, 2016.

Most of you don't really understand the significance of this decision. It is as important as most of the information that Craig Hemke, Dave Kranzler and Paul Craig Roberts are posting.

Kudos to California Lawyer for posting it!

What do the continued suppression of sub $16.00 silver, PM manipulation, geo-engineering, NIRP + the cash less society, the murder of 200 holistic Doctors, the murder of hundreds of bankers, and the Glaski Case  (Yvanova confirming) have in common?

They all emanate from the same central focal point -- The power elite looking to completely control every aspect of our lives through power, greed, manipulation, and corruption.

The Yvanova decision was amazing in that the higher court overturned hundreds upon hundreds of lower court decisions that were not based upon law but upon "argumentum ad false cause".

There was no fundamental basis of law behind the banks stealing the identity of the borrower, securitizing the loans, selling their houses repeatedly in the market to unknowing investors, and then forging documents and endless assignments (often 5-7 years after the fact) to cover up the entire scheme.  

The banks set up this entire scenario four years in advance (2002-2006),  and then  robbed the Middle Class of $50 trillion dollars in homes and home equity that went into the "Black Budget".  Most people were blindsided. 

If you are against the Banks manipulating the price of gold and silver using naked shorts, you are against the Banks using false documents and fraudulent servicers to perpetuate their lies. They are one and the same except people were "baited and switched" with these mortgages and then foreclosed upon when the real details of what was behind the fine print was revealed.

Foreclosed upon when the mortgages doubled or sometimes tripled due to a clause tied to an esoteric index not openly disclosed. Many of these mortgages were doomed to failure from the onset and the mortgage brokers knew it -- even as they were illegally altering the application papers which the borrowers never received! Then the loans were rehypothocated. It goes on and on and on.

The real issue then became  WHO HAD STANDING?

The judges couldn't even take the time to ascertain the truth behind the false dealings of the banks much as the Drug companies (Big Pharma) now create their own reports for FDA approval and Doctors are wined and dined to recommend the new drugs. Can you say "Conflict of Interest?

They are about to be blindsided again and Craig is once again timely in his release of "The Door Slams Shut".

In conclusion, I will offer this tidbit. The silver dime, especially the "merc" will become the most valuable pragmatic piece of silver to own after the coming collapse. Not the ASE or the Maple Leaf, all which of course will have tremendous value--but just as the Roman denarius was the defacto coin of the realm, I believe that the pre 1964 silver dime act in the same capacity. After the dime, the quarters, half dollars and then the silver dollars.

Steady on...

Safety Dan's picture

QUOTE OF THE DAY There are

QUOTE OF THE DAY

There are three things which build and maintain civilization throughout time: pure air, pure water, and pure food. And as an eternal truth I say unto you, that there are three things which bring the end of civilization, even the mightiest that have ever been and shall ever be, from the beginningless beginning to the endless end of all time: impure air, impure water, and impure food.

- by Zenda Avesta, c. 3000 BC

and....

Scientific Consensus Statement Reveals Roundup Herbicide A Major Health Threat

As the world becomes increasingly aware of the dangers of glyphosate-based formulations, and the scientific community begins to muster the courage to speak out, there is a growing sense of hope that glyphosate and glyphosate-based farming techniques will be phased out in favor of non-toxic, far more sustainable food production methods. Perhaps the best way to enact this change is to vote with your fork and dollar, making sure to buy only truly organically produced food and related commodities whenever possible.

Back to Page 1

http://www.greenmedinfo.com/blog/scientific-consensus-statement-reveals-roundup-herbicide-major-health-threat?page=1

ReachWest's picture

Found Gold Bar

Plumber finds 1 kilo gold bar during bathroom reno in Calgary. Just another Turdite who lost his stack under the jacuzzi?

Story Here.

infometron's picture

@ReachWest Re: Found Gold Bar

“We were pumped when we found it, of course,” Babul said. “Seeing the economy the way it is right now, it kind of sucks that we had to give it back. Obviously we were going to do the right thing.”

Only in Canada, you say? Pity!

cyclemadman's picture

Idle Engines

Just another anecdotal data point, but there are over 150 train engines sitting idle at a switching yard a few miles east of Gillette, WY. Why does that matter? Well the coal mines in the Powder River Basin supply coal to power plants that supply about half the electricity in the United States.

I was born here in Gillette and have seen many boom and bust cycles being about the same age as Turd. I have NEVER seen train engines sitting idle like this.

http://www.gillettenewsrecord.com/news/local/article_d5dd510f-4e7a-57e5-b872-3c33bb706a04.html

There is a video that I can't seem to connect to as well. If you search "train engines donkey creek" it should come up on youtube.

tyberious's picture

Monsanto Cranks Up Junk Science

If Monsanto didn't have enough bad news already—considering its falling stock price, reduced profits, and recent job cuts—California dealt the agribusiness giant a body blow when it announced its intention to label glyphosate (the active ingredient in RoundUp herbicide) as a carcinogen. Comments have been pouring in from health and environmental advocates, as well as from pesticide companies and their various front groups.

California is responding to increased research on the popular herbicide that shows glyphosate to be "probably carcinogen to humans," according to the International Agency for Research on Cancer, part of the World Health Organization (WHO). Although the move would not restrict sales, it would better inform consumers of the risks associated with glyphosate use.

http://www.abeldanger.net/2016/02/monsanto-cranks-up-junk-science.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+abeldanger%2FzWgH+%28Abel+Danger%29

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