Silver and S&P Similarities – Tops and Bottoms

Examine the 30 year log scale chart of the S&P 500.  What I see:

S-S&P

 

  1. Tops occurred about every seven years. Tops were usually rounded, followed by intense drops.
  2. Tops were approximately Aug. 1987, Jan. 1994, March 2000, Oct. 2007, and May 2015.
  3. Once the S&P broke below the red up-trending support lines in 2000, 2007, and (probably) in 2015, the rally was over and large corrections occurred.
  4. The next large move in the S&P looks like it should be, based on history, a substantial correction to the 600 – 1,400 range.

Other Considerations:

  1. Federal Reserve easy money has helped create the last six years of S&P rally. The Fed has been propping up the stock and bond markets while it has been antagonistic to the silver and gold markets.
  2. Investors, Wall Street, pension funds, and more will scream in anguish if the S&P crashes. The upcoming correction/crash could be worse than the 2008 crash.
  3. Market breadth, P/E ratios, other fundamentals, crashing commodity prices, and accelerating wars also indicate a likely correction.
  4. We have been warned, just as we were in 2000 and 2007.

Shorter Term:

Examine the weekly S&P 500 on a log scale for two periods, 2003 – 2008, and 2010 – 2015.  There are similarities.

S-S&P-wkly-3

 

S-S&P-wkly-4

  1. Significant bottoms: 3/14/03, 8/13/04, 8/17/07, 11/30/07
  2. Significant bottoms: 7/2/10, 9/23/11, 10/17/14, 8/28/15
  3. Major top: 10/12/2007
  4. Major top: 5/22/2015

The bottoms and single top line up fairly well.

Note that five months after the 2007 high the S&P bottomed in March 2008, rallied back into May 2008, and crashed from there.

Three months after the May 2015 high the S&P bottomed in late August 2015, rallied back to November 2015, and — we are waiting to see if a crash occurs in 2016.

WHAT ABOUT SILVER?

S-Silver-xx

Examine the 30+ year log scale chart of (paper) silver.  Note the major lows in silver prices, as indicated.

Silver lows occurred about every seven years in May 1986, February 1993, November 2001, October 2008, and December 2015.  Now compare the silver lows to the S&P highs over the past 30 years.

S&P Tops                                               Silver Bottoms 

August 1987                                                May 1986

January 1994                                              February 1993

March 2000                                                  November 2001

October 2007                                               October 2008

May 2015                                                     December 2015

 

The S&P tops line up moderately well with silver bottoms.  The last three S&P tops have preceded silver lows.

WHAT DOES THIS PROVE?

In my opinion this proves very little, but the above certainly SUGGESTS the following:

  • The S&P has peaked about every seven years and the peak in May 2015 probably marked the end of this seven year cycle.
  • The next big move in the S&P will probably be down, based on cycles, the 30 year charts and the five year charts.
  • Silver bottoms occur about every seven years and roughly line up with S&P tops. Assuming the S&P has topped, that supports the expectation for a silver low in December 2015 or perhaps 2016-Q1.
  • The next big move in silver should be a substantial, multi-year rally to much higher prices. My 5 – 7 year estimate is $100 per ounce for physical silver.
  • Continuing central bank “money printing,” currency devaluations, fiscal and monetary madness, unsustainable debt levels, massive deficits, and accelerating wars suggest higher silver prices.
  • In the long term, silver prices increase along with US government official national debt, deficits, and dollar devaluations. Increasing debt, deficits and devaluations are all but guaranteed, and consequently so are long term silver price increases.
  • Wars, political stupidity, monetary and fiscal madness, and central bank interventions all seem to be in “bull” markets. Expect silver prices to benefit from all the above.

 

Read:          Watson:  Market Tops in Gold and Silver

Spitznagel:  When’s the Crash Happening?

 

Summary:  Buy silver, sell the S&P, rig for stormy weather, and expect a turbulent 2016.

 

Silver thrives, paper dies!

 

Gary Christenson

The Deviant Investor

 

Temp Cover-Front

 

My book “Who Killed Doctor Silver Cartwheel?” explores the reasons for silver demonetization and projects future prices for silver in five years.  The book is a quick read and is priced at $6.99 in paperback on Amazon.  Buy it!

 

4 thoughts on “Silver and S&P Similarities – Tops and Bottoms

  1. I currently find myself approaching 75 years of life on this Earth. In my youth, a very adventurous one at that, I anticipated that by this time in my life I would be beyond the worries of providing for home, family, children and have the time to focus on the more rewarding aspects of becoming an old codger. Unfortunately it simply hasn’t worked out the way I had thought it might. Instead I am constantly involved with seeking information, if not the ways to try to avoid or lessen the impact and consequences of what In believe is a reset of enormous proportions and attempting to prepare for what to me is clearly on its way and has commenced.
    One aspect of my new awareness of life as I see it coming is to try to alert my circle of friends of the crises that I envision and that I believe is now on its way.
    I began this effort in 2010 right after it dawned on me that we were not simply encountering a business as usual recession. Yes, While I was late or later than many, the indicators were there. Noting the economic disparities coupled with what I termed, a declining political and ethical climate, I began writing and publishing my conclusions and opinions involving this perception of decline. No, not for sale or profit, but simply what I considered a moral duty to my friends and associates. And who am I to embark on such a quest? Please recall my reference to an adventurous youth, my youth was spent in the U.S. Navy where I traveled extensively all over the world and witnessed countries and economies at their best and worst. Later in life, after retiring from Naval Service I sought employment in the Merchant Marine and continued my travels, both home and abroad. As a part of those travels I continued to witness and experience foreign localities, both the best and the worst. Obviously I formed impressions involving both national governments and economies and the correlation between the two. It was a reasonable expectation that one could readily identify what worked and what did not.
    With those experiences coupled with what I term a natural curiosity in economic topics, I delved further into the dismal science. As a result of my pursuits I definitely refined my conceptual recognition of what works and what does not.
    Upon the recognition of the path that this country appeared to be heading prompted, I hate to describe it as moral indignation, however I became alarmed, at times seriously so. It was this recognition, if not indignation that prompted my efforts to try to alert others to what i viewed as an approaching threat.
    Now, after having published what I term, a news letter involving economics and politics I find that I have failed miserably in that effort to alert others. Recognizing that failure I thought that speaking with many of those that I sent my letter to on a personal basis about my concerns might prove more effective. I began earnestly in an effort to impart to my friends and associates of the threats that I see coming. The initial reactions varied from a deer in the headlight looks to incredible disbelief, a number took offense at my daring to broach such nonsense as a economic crisis occurring in this country. Again, I have known many of these people since childhood, I began, “You know me and of our friendship of years, please consider my concerns?” While some reacted with a condescension, even pity at my, seemingly outrageous pronouncements, a few were very polite and smiled in a polite fashion, likely missing any import of the advice I tried to dispense.
    While I continue to publish my news letter, The Clarion, I do so after having learned another of life’s lessons, even at this advanced age one can still learn. The lesson, a somewhat disappointing one, if not a bitter one. Keep your own council, avoid unpopular messages, likely as not the old axiom of killing the bearer, the messenger of bad news, likely occurred in the annals of history.
    I have read that those who recognize the likelihood of a coming financial reset comprise only one or two percent of the population. After my experiences this percentage has taken on a personal significance as well.
    As I commented to another friend just recently, ” I could well be wrong in my perception of the future, however being wrong is not what disturbs my sleep. It is the concern of being right is that which prompts my sleeplessness.


  2. Gary – the Gold/Silver Ratio is now over 78/1. This can’t continue. Your analysis is superb, logical & makes perfect sense. We know the BEST is yet to come – it’s inevitable. I just placed another silver bar order in the last hr – on the dip!!!
    The future looks bright for those of us with 1/2 a brain. More & more people are exiting the corrupt banking system – never in my life have I witnessed this!!!
    Keep up your excellent work.



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