Richard A. Dickson - Mastering Market Timing: Using the Works of L.M. Lowry and R.D. Wyckoff to Identify Key Market Turning Points

Using the Works of L.M. Lowry and R.D. Wyckoff to Identify Key Market Turning Points

Richard A. Dickson
Tracy L. Knudsen, CMT

FT Press
Vice President, Publisher: Tim Moore
Associate Publisher and Director of Marketing: Amy Neidlinger
Executive Editor: Jim Boyd
Editorial Assistant: Pamela Boland
Senior Marketing Manager: Julie Phifer
Assistant Marketing Manager: Megan Colvin
Cover Designer: Chuti Prasertsith
Managing Editor: Kristy Hart
Senior Project Editor: Lori Lyons
Copy Editor: Language Logistics, LLC
Proofreader:Sheri Cain
Indexer: Erika Millen
Senior Compositor: Gloria Schurick
Manufacturing Buyer: Dan Uhrig

2012 by Pearson Education, Inc.

Publishing as FT Press

Upper Saddle River, New Jersey 07458

This book is sold with the understanding that neither the author nor the publisher is engaged in rendering legal, accounting, or other professional services or advice by publishing this book. Each individual situation is unique. Thus, if legal or financial advice or other expert assistance is required in a specific situation, the services of a competent professional should be sought to ensure that the situation has been evaluated carefully and appropriately. The author and the publisher disclaim any liability, loss, or risk resulting directly or indirectly, from the use or application of any of the contents of this book.

FT Press offers excellent discounts on this book when ordered in quantity for bulk purchases or special sales. For more information, please contact U.S. Corporate and Government Sales, 1-800-382-3419, .

Company and product names mentioned herein are the trademarks or registered trademarks of their respective owners.

All rights reserved. No part of this book may be reproduced, in any form or by any means, without permission in writing from the publisher.

Printed in the United States of America
First Printing July 2011

Pearson Education LTD.
Pearson Education Australia PTY, Limited.
Pearson Education Singapore, Pte. Ltd.
Pearson Education North Asia, Ltd.
Pearson Education Canada, Ltd.
Pearson Educatin de Mexico, S.A. de C.V.
Pearson EducationJapan
Pearson Education Malaysia, Pte. Ltd.

Library of Congress Cataloging-in-Publication Data

Knudsen, Tracy L., 1968
Mastering market timing : using the works of L.M. Lowry and R.D. Wyckoff to identify key
market
turning points / Tracy L. Knudsen, Richard A. Dickson,
p. cm.
ISBN 978-0-13-707930-8 (hbk. : alk. paper)
1. Technical analysis (Investment analysis) 2. Wyckoff, Richard Demille, 1873-1935. 3.
Lowry, L. M.
(Lyman M) I. Dickson, Richard A., 1948- II. Title.
HG4529.K58 2012
332.632042dc22
2011012741

ISBN-10: 0-13-707930-3
ISBN-13: 978-0-13-707930-8

To my loving wife Sharon and to my girls, Anne, Sara, and Jenn.

Dick

To Carl and Jack: My loving husband and precious son.

Tracy

We would like to acknowledge Paul Desmond, President of Lowry Research Corp., for providing us with the support and resources necessary to complete this extensive project.

We also want to acknowledge Wyckoff expert Hank Pruden for his encouragement and support.

Finally, we would like to acknowledge Jim Boyd, Lori Lyons, and Gloria Schurick of Pearson for their help and patience throughout the publishing process.

Richard Dickson is a Senior Vice President at Lowry Research and Director of Research for the Domestic and Global versions of Lowrys primary product, Lowry on Demand. He also chairs the Research Committee for Lowry Capital Management. Dick has been a technical market analyst for more than 30 years. Prior to joining Lowry in 2002, Dick was Senior Technical Equity Strategist at two major regional brokerage firms.

Dick is a frequent contributor to many radio and television shows, and his words are seen often in newspaper and financial publications. Dick has served on the Board of Directors of the Market Technicians Association, first as Education Chair and later as Treasurer. He also served on the Board of Directors of the MTA Educational Foundation. In 1995, as head of the Market Technicians Associations Educational Committee, he initiated and taught the first full-credit course on technical analysis at the university level in the United States. In 1997, Dick received the MTAs Best of the Best award for his work in education. Dick is currently a member of AAPTA (the American Association of Professional Technical Analysts). He is a graduate of Principia College (BA) and the University of Virginia (MA).

Tracy Knudsen, Chartered Market Technician (CMT), has been a market technician for 17 years. She currently holds the positions of Senior Vice President of Research at Lowry Research Corporation and Assistant Portfolio Manager at Lowry Capital Management. Prior to joining Lowrys, Tracy held the position of Senior Market Strategist at Candlecharts.com and, prior to that, Senior Technical Analyst at Stone & McCarthy Research Associates.

Tracy has been quoted in major financial publications and written articles for the magazine Stocks, Futures, and Options as well as Technical Analysis of Stocks and Commodities. Tracy has also appeared on Bloomberg Radios afternoon program, Taking Stock. Tracy is a member of both the Market Technicians Association and the American Association of Professional Technical Analysts, where she has served on the board of directors.

The authors, Richard A. Dickson and Tracy L. Knudsen, deserve high-fives and extra kudos for making a significant and distinct contribution to the understanding and the application of the Wyckoff Method of technical market analysis. From their vantage points at Lowry Research, Dickson and Knudsen clearly and persuasively demonstrate the synergy gained through linking the principles of Richard D. Wyckoff with the research findings of L.M. Lowry. In this book, the authors show us how to use the Buying Power measure and the Selling Pressure indicator of Lowry Research to garner deeper, more accurate, and more relevant applications of Wyckoffs Law of Supply and Demand.

In my quest to understand the essence of Wyckoff, I frequently became stymied by the ambiguity of simple bar charts of price and volume when trying to decipher the relative impact of demand vs. supply in a given price action. But now, thanks to this book by Dickson and Knudsen, the separate measurements of demand and supply, using Lowrys indicators of Buying Power and Selling Pressure, offer the breakthrough Ive needed. I now have the deeper, clearer, more efficacious grasp on the Wyckoff Method that Id been seeking.

With clear-cut criteria and rich, understandable examples, Dickson and Knudsen whisk away the fog that surrounds simple bar chart analysis. They persuasively demonstrate how Lowrys indicators of Selling Pressure and Buying Power can help the analyst or the trader/investor to make timely and accurate judgments. They illustrate how to diagnose and then anticipate both the powerful bull market of the 1980s-90s and the devastating bear markets of the early 2000s. Dickson and Knudsen offer analyses of additional major bottoms and major tops to give the reader convincing evidence of the edge to be gained by uniting Lowrys Buying Power and Selling Pressure with Wyckoff principles.

As an additional bonus, the authors show how Wyckoffs Point-and-Figure Charts plus non-Wyckoff advance-decline indications are useful market tools for augmenting the Supply and Demand study of market tops and bottoms.

Finally, the reader can rely with great confidence upon both the technical competence and the personal integrity of Dick Dickson and Tracy Knudsen. Ive been a professional colleague of Dick Dickson for numerous years. I was present in 1997 when Dick received from the Market Technicians Association (MTA) the well-deserved Best of the Best Award for his many accomplishments in technical market analysis education. In addition, I have had the pleasure of speaking with Tracy Knudsen at various Technical Analysis conferences throughout the country and can vouch for her knowledge and experience in the field of Technical Analysis. Prior to joining Lowrys, she was the Senior Technical Analyst at the highly respected firm, Stone and McCarthy Research, and then worked closely with noted Technician Steve Nison as Senior Market Strategist Candlecharts.com. I believe that this book,