I will be interviewing Lowry’s terrific Technical Analyst, Paul Desmond later today. Its a Q&A which will get transcribed for publication.
I have a list of questions for him about his work on spotting market bottoms, which won the Charles Dow 2002 Market Technician’s Award. His most recent quantitative analysis is on how tops get formed, and compares the 1929 top with 14 more recent tops.
If anyone has a question for him, please use the comments section here to post them, and I will try to work them into to the discussion.
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UPDATE: FEBRUARY 15, 2005 6:42AM
Thanks for all the suggestions! I was on the phone with Paul for over an hour. He is very eloquent and thoughtful, has a totally rigorous approach, and has made some truly important and impressive technical discoveries. And, I was smart enough to say very little and let him do most of the talking.
The tape is now being transcribed, and with a little luck should be out to tomorrow — I am totally jazzed about the way it came out.
Many thanks — you guys were tremendously helpful!
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UPDATE: FEBRUARY 16, 2005 3:42PM
I just discovered this is a public document: An Exploration Of The Nature Of Bull Market Tops
Lowry’s has a short term undex that has been below 66 for many months now. (66 according to Lowry’s is a preliminary over sold level.) Is this a record?
Statictically, what does this market most closly parallel in Lowry’s history?
Does Mr. Desmond view the recent churning in the Japanese market as a sign of a top?
What is your outlook for energy related securities? Do you think we are currently involved in profit taking and the bull market will resume. Do you see alternative energy being a better bet than traditional (oil & gas) companies?
This cycle we have some rather dramatic differences than we have had in previous cycles e.g. (1) rapid growth in Latin America, China, India; (2) Asian economic recovery; (3) low real s-t interest rates. How do these factors affect (or not) the model used to forecast market bottom (or tops)?
Does he use any fundamental data or economic data to supplement his technical work in determining tops? If so…..care to share?
In recent years is there a more reliable index than others and are tops mostly rolling or sudden financial accidents?
Can he describe how buying and selling pressure is quantified for their index? What areas does he expect to outperform in the next bear market?
Do certain technical indicators that were useful get “stale” as the indicators are used by more traders?
Can odd-lot sales, short-sales and purchases be used to mark bottoms and tops? Is the specialist:public short sale ratio of any use?
is it possible that all this churning is NOT a top but just another leg up in this 3 year old bull market cause we ‘ve gone sideways for so long??
Is he expecting a 4 year cycle low probably this fall? Does he think we will be lower in the fall than we are now?
Does Paul see a Presidential election cycle low in 2006 similar to what Jeremy Grantham sees?
Does Paul have a view of the domestic residential real estate market?
Does Paul think we are in a secular bear market?
Does Paul think the S&P high near 1550 established in 2000 will mark the high for years to come or will we break through?
At what valuation or absolute S&P level does Paul see a cyclical or secular bottom being hit? And when?
Have you done any quantitative work on determining which sectors are poised to outperform or underperform?
(1) Ask him where buying and selling power are right now.
(2) Where they’ve been the last few years since the market bottomed in 2002
(3) Any longer-term projections he has.
Ask him how exactly does someone become a market technician? To become a fundamental analyst one usually is required to take the CFA exam. Is there any criteria used to become a technical analyst?
How does he prevent overfitting historical data?
Given the fact that more and more of trading is programmed, how important is the phsycological aspect to the market? i.e. We have all been trained to also think of the phsycology behind all various aspects of a market; tops, bottoms, bear , bull, etc.
However, if most is programmed, then is the phsycological aspect as to how traders think still applicable given they are a smaller and smaller part of the market?
Does Mr. Desmond expect a 90/90 (either down or up) day that would signifiy a top?
In what ways, if any, have chart patterns and their interpretation been affected by the advent of derivatives and hedge funds ?
What is your opinion on GANN analysis please ?
Tell Mr. Desmond that I really enjoyed his early work wtih the Dave Brubeck quartet.
http://www.mta.org
gann used witchcraft and ouija boards. lol. that is why it isn’t part of the cmt coursework. but there are ALOT of gann followers.
What are Dedmond’s thoughts on the impact of Iran’s euro-denominated oil bourse that’s set to open in March on the US Economy and Markets? Some think this will trigger a US Dollar Crisis.
More info here:
http://www.globalresearch.ca/index.php?context=viewArticle&code=CLA20060210&articleId=1937
Thanks for all the suggestions! Just got off the phone with him now — you guys were tremdously helpful!
where are we in this cycle? topping or breaking out?
I’m interviewing Jim Rogers for my newspaper, the Birmingham Medical News (Jim is originally from Alabama). Obviously, I plan to ask him about commodities. I also want to ask if there are any country markets that he views as cheap now. And his take on future medicare entitlements (my readers are physicians). Anyone have any suggestions for more questions?
I know I am late posting my question but will do it anyways! What is Paul’s opinion on the non-confirmation between Dow Industrials and Dow Transports (Dow Theory) and what does he think on the divergence between small caps (new all time highs) and market cap indices such as S&P 500. I know Lowry’s keeps track of an un-weigted index of S&P 500 which perhaps made all time highs recently.