Larry Pesavento Says the Market Goes Down Big Starting Next Week

Larry P, a superb trader who uses precise Fibonacci pattern analysis has been talking about the market being at an important top starting end of this week and beginning next week.

Larry P is also the one who made one of the greatest market calls I have ever seen.  During the October 2008 period he precisely called the worse declining portion of the ‘crash’ at that time.  I believe it was October 6th to October 10th, 2008.   Larry P is also heavily into Astro Trading and uses precise planetary alignments to pinpoint turning points and continuation patterns in the market.

The time frame of October 6th to 10th 2008 was a similar astro configuration to the one that existed in 1881 during the banking panic at that time.  So the planetary aspect that he was talking about was almost the same and existed over that period of 4 trading days.

Those 4 trading days led to huge price destruction and volatility during 2008 and the rest they say is history.

When I look at the SP500 I can see the possibility of a break down coming soon.   But I have said before and I will say it again… We need to break down under 1012 to 1014 as a first sign that we may be heading into a more severe correction.  When and if a correction starts it may happen very quickly to start it off as a big sign of weakness. 

Certainly September is a time of year for downside corrections to occur.  September is an ideal time for a correction based on seasonality.

Right now the daily relative strength index is perched right up under the 70 line and is an ideal place for a market turn down.  But again, I am not thinking a more severe correction until we break 1012 to 1014 on the S&P500.

In many individual stock charts that I have looked at over the last week or two I can definitely see patterns that would lead to more severe downward corrections.  For example there are plenty of bearish divergences between the MACD indicator and price.  A week or two more of price action could activate an overall correction.

That is the tricky thing about corrections.  They tend to start with a few dominos who then hit a few other dominos until all the rest of them start to fall down.

There is only one day left in August after today, so the bearish correction scenario could be helped along significantly if we get a really negative close today and another one on Monday after the weekend.  That would create a more negative looking monthly closing price bar. 

If we close near where we are right now on Monday then it would be a much more bullish looking monthly price bar to close the August time frame.

So if today and Monday are very hard down in the broad market it could help Larry P’s forecast come to fruition.

Posted in Market Timing, Online Trading, SP500
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