Altimeter & SRLs

According to Edson Gould, "one of the best ways to determine whether the stock market is 'high,' 'low' or somewhere in between is to examine the relationship between prices and dividends."  At least that is the way that Edson Gould opened his February 21, 1968 Barron's article titled "What Price Dividends?"  The article was Gould's formal introduction of the Altimeter for the Dow Jones Industrial Average.  We agree with Gould's assessment that price and dividends can help to provide an approximation of where a stock might be.

Speed Resistance Lines (SRL) were also created by Edson Gould.  According to William X. Scheinman, Gould used what is known as the 1/3 speed resistance line measurement to gauge price change and elapsed time which was purported to be two key determinants of crowd psychology in the market.

The Altimeter and SRL was created by Edson Gould who "...spent over 60 years working in and studying financial markets. Gould studied the arts at Princeton, engineering at Lehigh (from where he graduated in 1922), and finance at New York University. In 1922, after working for a short time at Western Electric, he joined Moody's Investor Service as an analyst and later was editor of Moody's Stock Survey, Bond Survey, and Advisory Reports. In 1948, he began at Arthur Wiesenberger & Company, where he developed and edited the well-known Wiesenberger Investment Report and became a senior partner. He also was Research Director at E. B. Smith (which later became Smith Barney), and worked for Nuveen."

(source: Market Technicians Association. Gould, Edson Beers, Knowledge Base. Accessed April 26, 2012. link MTA reference.)

"Market technician Edson Gould always laughed at the idea of having a significant influence on the stock market, but his predictions were the most precise around. He pinpointed major bull markets and prophesied bottom-out markets as if he had his own peephole into the future. But in place of a crystal ball and wacky off-the-cuff schemes, his were smart, intensely researched and time-tested theories that made him a legend in the investment community."

(source: Fisher, Kenneth L.. 100 Minds That Made the Market. Business Classics, Woodside, CA. 1993. page 320.)

Below are the Altimeters that we have completed so far (link to the altimeter by clicking on the date):

Below are the Speed Resistance Lines that we have created so far:

Bibliography:

  • Dines, James. How The Average Investor Can Use Technical Analysis For Stock Profits. 1974. Dines Chart Corporation.
  • Du Bois, Peter C. “Talking Money”. Barron's. Mar 18, 1974. pg. 5.
  • Gould, Edson. “Summer Rally?” Barron's . June 17, 1968. pg. 9.
  • Frank, Judith. “Neither Bull Nor Bear?” Barron's. May 12, 1975. pg. 11.
  • Gould, Edson. “Three Steps and Stumble?” Barron's. December 27, 1965. pg. 3.
  • Gould, Edson. “Laggards and Swingers.” Barron's. May 23, 1966. pg. 9.
  • Gould, Edson. “What Price Dividends?” Barron's. February 21, 1968. pg. 5.
  • Gould, Edson. “Market Pitfall?” Barron's. May 6, 1968. pg. 9.
  • Gould, Edson. “Daily Trading Barometer: It Signals a Market Rally”. Barron's. February 16, 1970. pg. 23.
  • Scheinman, William X. “1966 and All That: One Stock Market Analyst Sees Some Ominous Parallels Today”. Barron's. March 17, 1969. pg. 5.
  • Scheinman, William X. “600 on the Dow?” Barron's. February 9, 1970. pg. 5.
  • Scheinman, William X. “May to December: The Bear Market, Says One Analyst, Will Hit Bottom This Winter”. Barron's. August 24, 1970. pg. 5.

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