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Paul Desmond follow up

Back in February, I did an extensive Q&A with Paul Desmond of Lowry's Reports (Part I is here, and the important Part II is here).

At the time, I asked Paul where we were in the market cycle, and he replied: "We are well in the process of forming a top, but we are not to the final stage of this thing yet."

That was dead on. After all the technical damage we've seen of late, I followed up with Paul to see what he was thinking these days; I wrote him:

We are running about 10 to 1 on the NYSE up down volume – but not as bad on the A/D, and not as bad on the Nasdaq. I’d love a bounce to short into . .  .

His reply:

"It is very likely that our short term indicators will all fall to oversold levels as of today's close.  That would set the market up for some kind of a snap-back rally (to short into) within the next few days.

Also, today's (Wednesday) decline has been flirting with a 90% Downside Day.  If it ends as a 90% Down Day, the probabilities would strongly favor one do-nothing day (as investors try to recover from the shock) and then a rally lasting from 2 to 7 days before the decline resumes. 

So, you may get your wish.
>

Just so you know . . .

Thursday, May 18, 2006 | 10:32 AM | Permalink | Comments (18) | TrackBack (0)
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Comments

So a buddy of mine IMs me with some feedback that TheStreet.com says titanium is the new tech bellweather. Since I don't subscribe, I can't see it. Anyone have access to what it says?

For the author of that story, I just have two words. Shooting star. Symbol TIE, Titanium Metals is an interesting chart. If you have access to a charting package, look at the 2003-2006 chart on a monthly perspective with candlesticks. Nonlog scale. Can you say parabolic?

It took three years for this company to go from a few bucks to $24. Then it took 45 days to go to $48. Cumulative run is about 4,800% in three years. There is the ugliest shooting star I've ever seen on a monthly chart with this company. Is TheStreet a reasonable contrary indicator? Or are we just getting a healthy correction? lol.

Posted by: B | May 18, 2006 11:13:28 AM