Trader’s Narrative

Yesterday’s Fast Money had an interview with Paul Desmond, president of Lowry Research:

He mentions the 90% downside volume we saw accompany Monday’s decline as well as the anemic volume behind the higher prices since April 2009 as reasons he thinks that this is not a real bull market.

Desmond thinks that we are heading lower and ultimately below the March 2009 because if that level didn’t attract enough strong hand buyers, then the market will have to go even lower (and get cheaper) to do so.

The discussion of 90% down days is interesting although the clip is too short to do justice to it. Although the seminal work of Paul Desmond on 90-90 days does rely on them, 90% down days by themselves are not necessarily all that bad news for bulls. Historically, the market doesn’t take a dive after 90% downside volume days (both in the short term and in the long term).

Bill Strazzullo of Bell Curve Trading is the other person being interviewed is a bit more ambivalent. He’s watching the 900 current level and thinking that the market will have a tough time climbing higher. I’m not familiar with him or his track record so if you are, let me know.

Final days of the Hedge Fund Operational Due Diligence book giveaway. Follow the link and submit your email for entry into the draw. Yup, that easy.

Here are just a few picks from the past week’s reading list at news.tradersnarrative.com. Follow the link below to get much, much more:

• The Quiet (Lobbyist Lead) Coup
• Eternal Struggle: Stocks vs. Bonds
• Fast Money, Ratigan Jumps Ship (off to ABC?)
• Should You Your Watch Your P&L While Trading?
• Roubini Likes Geithner’s Plan (!)
• The Why’s & How’s of Pyramiding (the good kind, not the ponzi kind)
• Doug Kass: Raise Cash as Rally Pauses
• Simple Flow Chart of Geithner’s Financial Bailout Plan
• What does one TRILLION dollars look like?

And remember to check regularly since there are new links added everyday.