Bart's Charts

CHANCE favors the prepared mind …

Posted on July 26, 2015     Leave a Comment

I have learned almost everything I know about the TRADERS MINDSET from Larry Pesavento of http://www.tradingtutor.com.  He first introduced me to harmonic pattern recognition and after about 6 months I had trained my eye (thru his tutelage) to understand and see the swings.  Others – Michael Jenkins (www.stockcyclesforecast) have fined tuned my understanding of vibrations, patterns and the “other stuff” acting on the market.  I am so thankful for their friendship and tutelage.

Larry skyped and emailed me this AM (Sunday) and I thought I would share.

I felt compelled to attach the following video and charts – it’s simply PROBABILITY and, more than likely, VERY LOW PROBABILITY that the market will gap down on Monday.  IF it does then there is a PROBABILITY (again, probably very low) that the market could suffer significant losses.

So, give me or Larry NO credit for trying to be a “market timer” or “crash caller” or any of that nonsense.

It’s like this … before I became a student (always learning) of the markets I had the opportunity to fly for the Navy and attend TOPGUN.  At TOPGUN we planned missions and ALWAYS “what if’d” E V E R Y T H I N G.  Why?  Because , at 1.0+ IMN (indicated mach number) shit happens fast and if you haven’t thought of everything BEFORE the flight then when it happens you hesitate and then the shit hits the fan.

“He who hesitates is lost.”

The other thing I learned is there are A L W A Y S “causal factors” or “links in the chain” which forewarn events, mishaps, crashes to happen.  MOST OF THE TIME, not always, YOU HAVE TIME TO REACT.

So, simply put this in your portfolio or trader gameplan … it’s that simple.

IF **** THEN ***.

TRADE YOUR GAMEPLAN and rock on, always.

Bart

PS – Larry has been TRADING in the markets for 50+ years. (yes, you read that right) so when he “foot stomps” I listen.  How many of us have that longevity in the market and can, as you read below, actually discuss trading DURING THE 1987 crash? Just saying …

From Larry:

“As we come into this week’s trading we are looking at a very similar situation that occurred in 1987. I’ve sent out the previous video to explain this pattern. In 1987 I was heavily involved on the short side of the market looking for a big drop. In August I had purchased October put options. On Friday, October 16 the Dow Jones was down hundred and three points at options expiration and I have made a substantial amount of money. However, had I purchased November put options the amount would have been 50 times greater. Crashes do not happen very often in fact usually once in every generation i.e. 80 years or so! Everyone thinks of the Federal Reserve has the back of the banks and the public for investing in stocks. But what if they don’t? Unfortunately I’m not able to bring out a lot of charts to verify this but we’ve done this to the videos this weekend. The one chart that I did attach year that I think is very important is the one that shows a lack of volatility in the market. This chart also shows the reverse point wave pattern i.e. expanding triangle pattern that is so bearish!

In order for this crash scenario to unfold we must be down sharply this week. Keep in mind that this is a rare occurrence if it does happen but the pattern is certainly similar in the state of the market is certainly similar as we have more declining issues than advancing issues. On Friday there were 10 times more issues declining than advancing at the New York Stock Exchange. Declining issues at the NASDAQ were 2 to 1 over advancing issues, not to bullish in my opinion.

all probability … check out Asia and, if you want to wake up and check out Europe around 3:30 AM (EST) then look for volatility in those markets as a roadmap – perhaps.

we all know this market can and will never go down anyway …

make it a great weekend.

Bart