Gurus Clash Over Last Week's Drubbing

Long-term market history suggests such "guru on guru" analysis is correct.

Lowry's vs. Lowry's

On Friday I wrote about how Lowry's Reports issued an intermediate-term sell signal, its first since adopting a bullish posture on Aug. 30, 2006. "Any rebound rally in the days ahead though is likely to be selective and serve largely as an opportunity to reduce equity exposure," the firm wrote.

Thus, I was taken aback to see Lowry's President Paul Desmond quoted in Monday's Wall Street Journal with a more bullish tint: "The market has caught cold but 'isn't showing the signs you would normally see if it were near death,'" he's quoted as saying.

Seeking clarity and knowing gurus are (sacre bleu) occasionally misquoted, I went straight to the source. Desmond's comments during our phone interview suggest the firm's stance is more nuanced than can fit into a headline (or single paragraph).

Desmond worries the market is showing "a lot the classic warning signs a major market top is [coming] somewhere in the next few months," most notably the rolling over of the advance/decline line.

However, "even as of Friday, we still don't have the degree of selectivity found at major market tops," Desmond continues. "That suggests some chance we could see another rally that would take some [big-cap] market averages to new all-time highs."

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