How Market Tops Get Made

With all the bubble chatter and talks of over-valued stock markets, I thought it was time to have a discussion with someone is the expert on the subject. In this case, that person would be Paul Desmond, chief strategist and President of Lowry’s Research.

Desmond has spent the past five decades analyzing markets; his research is widely regarded as both unique and insightful, winning numerous awards from various Technicians groups. If you want additional background into his thinking process, have a read of this long interview I did with him in 2006 (Part I and Part II)

What I really love about his work is how empirically driven it is.

I spoke with him recently, chatting about his work in identifying market tops. Rather than focus on the usual noise Desmond, suggests anyone concerned about a top should be watching for very specific warning signs. He notes the health of a bull market can be observed by watching internal indicators that provide insight into the overall appetite for equity accumulation.

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