Lowry’s Paul Desmond

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.


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! 


UPDATE:  FEBRUARY 16, 2005  3:42PM

I just discovered this is a public document:  An Exploration Of The Nature Of Bull Market Tops

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What's been said:

Discussions found on the web:
  1. Todd Horlbeck commented on Feb 14

    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?

  2. Ernest Mercer commented on Feb 14

    Does Mr. Desmond view the recent churning in the Japanese market as a sign of a top?

  3. Larry Stewart commented on Feb 14

    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?

  4. Leisa commented on Feb 14

    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)?

  5. B commented on Feb 14

    Does he use any fundamental data or economic data to supplement his technical work in determining tops? If so…..care to share?

  6. tom wegmann commented on Feb 14

    In recent years is there a more reliable index than others and are tops mostly rolling or sudden financial accidents?

  7. susan w commented on Feb 14

    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?

  8. john commented on Feb 14

    Do certain technical indicators that were useful get “stale” as the indicators are used by more traders?

  9. Matt F. commented on Feb 14

    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?

  10. tony commented on Feb 14

    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??

  11. Becky commented on Feb 14

    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?

  12. Greg S. commented on Feb 14

    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?

  13. Paul B. commented on Feb 14

    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?

  14. Ajay commented on Feb 14

    Have you done any quantitative work on determining which sectors are poised to outperform or underperform?

  15. Frank The CFA commented on Feb 14

    (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.

  16. brian commented on Feb 14

    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?

  17. sean commented on Feb 14

    How does he prevent overfitting historical data?

  18. John Liebman commented on Feb 14

    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?

  19. James commented on Feb 14

    Does Mr. Desmond expect a 90/90 (either down or up) day that would signifiy a top?

  20. David commented on Feb 14

    In what ways, if any, have chart patterns and their interpretation been affected by the advent of derivatives and hedge funds ?

  21. Edwin S. commented on Feb 14

    What is your opinion on GANN analysis please ?

  22. Rob commented on Feb 14

    Tell Mr. Desmond that I really enjoyed his early work wtih the Dave Brubeck quartet.

  23. B commented on Feb 14


    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.

  24. Barry Ritholtz commented on Feb 14

    Thanks for all the suggestions! Just got off the phone with him now — you guys were tremdously helpful!

  25. jp commented on Feb 14

    where are we in this cycle? topping or breaking out?

  26. Steve Spencer commented on Feb 14

    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?

  27. Spyros commented on Feb 15

    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.

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