public

Technically Speaking, April 2015

LETTER FROM THE EDITOR

Once a year, the MTA Symposium assembles a lineup of great speakers yet some of the best technicians attending are in the audience. Symposiums have long been one of the most valuable of MTA membership and now technology makes it possible to extend that benefit to all members. Videos of the presentations will soon be available on line. Discussion forums on the MTA web site allow members to exchange ideas about the presentations or any other topic of interest.  In this month’s Technically Speaking we try to start the conversation about speakers with an article featuring the wisdom of a few presenters. This month’s newsletter also highlights the fact that chapter meetings offer another way for members to hear from great speakers. Leslie Jouflas, CMT, shares insights from Market Wizard Ed Seykota’s recent presentation in Washington. We also have new ideas about how to apply the principles of technical analysis in this issue and we’d like to hear from you about how you apply those principles. If you have ideas for articles in upcoming issues of the newsletter, please

To view this content you must be an active member of the CMT Association.
Not a member? Join the CMT Association and unlock access to hundreds of hours of written and video technical analysis content, including the Journal of Technical Analysis and the Video Archives. Learn more about Membership here.

What's Inside...

LESSONS IN TECHNICAL ANALYSIS FROM THE ANNUAL SYMPOSIUM

by Michael Carr, CMT

Editor’s note: The MTA’s Annual Symposium always brings together the best minds in technical audience as speakers and attendees. This year’s event, held at the end of March, was no different....

RECOGNITION AWARD: STANLEY DASH, CMT

The MTA honored Stanley Dash, Vice President of applied technical analysis at Trade Station, in recognition of his all-encompassing generosity to the academic community, including providing...

BROAD BOTTOM CONFIGURATIONS AND THEIR APPLICATION TO INVESTMENT STRATEGY

by William S. Doane

Editor’s note: this is an extract of an article that was originally published in Issue 8 of the MTA Journal in May 1980. The original article includes several other examples of board bottom...

TECHNICAL ANALYSIS OF ECONOMIC DATA: U.S. ECOMONY LAGGING ANALYST FORECASTS; REVERSAL SIGNALED

by Paul Ciana, CMT

Editor’s note: Tom DeMark demonstrated economic data can be analyzed with the DeMark Sequential™ and other indicators at previous MTA Symposiums. This technique was detailed in the March 26 issue...

PUGET SOUND MTA CHAPTER REVIEW: ED SEYKOTA PRESENTATION

by Leslie Jouflas

When you are one of the best in the world at what you do, you probably don’t do things like most people. Our honored guest and presenter at the February 19, 2015 Puget Sound MTA meeting, Ed...

MARKET ANALYST: ADVANCED SOFTWARE FOR ANYONE

by Amber Hestla-Barnhart

At the MTA Symposium, Mathew Verdouw, CMT, CFTe, Global CEO and Founder at Market Analyst International, provided attendees with additional information on Market Analyst, an analysis platform that...

5 STEPS TO GETTING INVESTMENT RISK UNDER CONTROL

by Cynthia A. Kase, CMT, MFTA

Editor’s note: this article was originally published in the Winter 2015 issue of Financial Executive magazine and is reprinted here with permission. Without risk none of us would make any money in...

THE ULTIMATE WAY TO BACK TEST YOUR BEST IDEAS: GLOBAL FINANCIAL DATA

by Amber Hestla-Barnhart

Technical analysis is based on the idea that history tends to repeat and to determine if history repeats we need to study the past. It’s probably an understatement to say that Global Financial...

WILT THE STILT GETS THE JILT

by Dr. Bryan Taylor

Editor’s note: this was originally published at the Global Financial Data blog and is reprinted here with permission. Global Financial Data has stock histories for over 50,000 securities. ...

LESSONS IN TECHNICAL ANALYSIS FROM THE ANNUAL SYMPOSIUM

LESSONS IN TECHNICAL ANALYSIS FROM THE ANNUAL SYMPOSIUM

Editor’s note: The MTA’s Annual Symposium always brings together the best minds in technical audience as speakers and attendees. This year’s event, held at the end of March, was no different. Each speaker presented useful trading ideas and attendees left the event with dozens of testable and practical ideas. In this article I am highlighting just a few of the many great insights into technical analysis that I heard over the two days. In the coming weeks, all presentations will be available online so that all MTA members can benefit from the speakers. We will also feature more about the Symposium in future issues of Technically Speaking.

Beyond the Benchmark: Applications for Active Investment Management offered attendees a chance to explore how top money managers outperform the market. Conference presentations showcased unparalleled industry experience and included discussions on how some of the best in the industry implement disciplined approaches to investing

To view this content you must be an active member of the CMT Association.
Not a member? Join the CMT Association and unlock access to hundreds of hours of written and video technical analysis content, including the Journal of Technical Analysis and the Video Archives. Learn more about Membership here.

Contributor(s)

Michael Carr, CMT

Michael Carr, CMT

Back to top
RECOGNITION AWARD: STANLEY DASH, CMT

RECOGNITION AWARD: STANLEY DASH, CMT

The MTA honored Stanley Dash, Vice President of applied technical analysis at Trade Station, in recognition of his all-encompassing generosity to the academic community, including providing instructional time and charting resources for academic trading rooms.

 Stanley Dash, CMT, combines more than a quarter century of experience in trading and technical analysis with more than 20 years of work as a teacher and public speaker on topics including stocks, futures, options, and technical analysis. Stan began his career on Wall Street in 1975 with E. F. Hutton. While there, and with other nationally known firms, he was involved in institutional and retail trading, management, and compliance. Later, as a member of the Commodity Exchange, Inc., Stan was an active floor trader at one of the leading domestic futures and options exchanges.

In the fields of training and public speaking, he is proud of his

To view this content you must be an active member of the CMT Association.
Not a member? Join the CMT Association and unlock access to hundreds of hours of written and video technical analysis content, including the Journal of Technical Analysis and the Video Archives. Learn more about Membership here.

Back to top
BROAD BOTTOM CONFIGURATIONS AND THEIR APPLICATION TO INVESTMENT STRATEGY

BROAD BOTTOM CONFIGURATIONS AND THEIR APPLICATION TO INVESTMENT STRATEGY

Editor’s note: this is an extract of an article that was originally published in Issue 8 of the MTA Journal in May 1980. The original article includes several other examples of board bottom configurations which are also known as “big bases.”

Low Risk vs. High Risk
The Investor vs. The Speculator
The Conservative Approach vs. The Aggressive Approach
Broad Bottom Configuration vs. Relative Strength / Momentum

Back in the early 1960s this writer interviewed George Chestnutt of American Investors. “Bill,” he said, “how do you pick next year’s winners?” “Well,” I explained, “I’d look for a breakout of a big base pattern and then I would buy the stock as it settled back on top of that broad bottom.” “Fine,” he said, “you’ll probably do a bit better than average. Top performance will come, however, by buying last year’s winners.” I had to give that some thought–and I have

To view this content you must be an active member of the CMT Association.
Not a member? Join the CMT Association and unlock access to hundreds of hours of written and video technical analysis content, including the Journal of Technical Analysis and the Video Archives. Learn more about Membership here.

Contributor(s)

Back to top
TECHNICAL ANALYSIS OF ECONOMIC DATA: U.S. ECOMONY LAGGING ANALYST FORECASTS; REVERSAL SIGNALED

TECHNICAL ANALYSIS OF ECONOMIC DATA: U.S. ECOMONY LAGGING ANALYST FORECASTS; REVERSAL SIGNALED

Editor’s note: Tom DeMark demonstrated economic data can be analyzed with the DeMark Sequential™ and other indicators at previous MTA Symposiums. This technique was detailed in the March 26 issue of Bloomberg Brief: Technical Strategies. This article is an extract of that analysis.  It is also  possible to apply stochastics or other traditional indicators to economic data to spot potential turning points.

The U.S. economy is underperforming analyst estimates by the most since the 2009 recession, according to the Bloomberg Economic Surprise Index.

The ESI aggregates metrics across six areas of the economy to determine its overall health, including gauges of housing and real estate, industrial production, personal spending, retail, consumer sentiment and the labor market. These are compared to previous analyst estimates collected by Bloomberg.

The chart compares the ESI to the S&P 500. The current trend of the ESI is negative and below -2 standard deviations from the mean, marking the

To view this content you must be an active member of the CMT Association.
Not a member? Join the CMT Association and unlock access to hundreds of hours of written and video technical analysis content, including the Journal of Technical Analysis and the Video Archives. Learn more about Membership here.

Contributor(s)

Paul Ciana, CMT

Back to top
PUGET SOUND MTA CHAPTER REVIEW: ED SEYKOTA PRESENTATION

PUGET SOUND MTA CHAPTER REVIEW: ED SEYKOTA PRESENTATION

When you are one of the best in the world at what you do, you probably don’t do things like most people. Our honored guest and presenter at the February 19, 2015 Puget Sound MTA meeting, Ed Seykota, certainly doesn’t do things like most people.

We had around 100 attendees at this meeting for the opportunity to meet and hear from one of the original Market Wizards brought to the investment and trading public’s awareness in Jack Schwager’s classic book, Market Wizards; Interviews with Top Traders (NYIF, 1989).

Ed Seykota is a long term trend follower trading automated systems that he builds. From Jack Schwager’s interview; “He conceived and developed the first commercial computerized trading system for managing clients’ money in the futures markets”.

Our evening with Ed Seykota was covered in three

To view this content you must be an active member of the CMT Association.
Not a member? Join the CMT Association and unlock access to hundreds of hours of written and video technical analysis content, including the Journal of Technical Analysis and the Video Archives. Learn more about Membership here.

Contributor(s)

Leslie Jouflas

Back to top
MARKET ANALYST: ADVANCED SOFTWARE FOR ANYONE

MARKET ANALYST: ADVANCED SOFTWARE FOR ANYONE

At the MTA Symposium, Mathew Verdouw, CMT, CFTe, Global CEO and Founder at Market Analyst International, provided attendees with additional information on Market Analyst, an analysis platform that offers powerful features while being easy to use. Mathew has been at previous Symposiums and attendees will remember that he has demonstrated the most advanced features of MA. This year he focused on how easy it is to use. At the Symposium I had a chance to speak to Mathew.

I understand Market Analyst can do anything I want to do as a technical analyst – it creates unique charts, allows me to run quant screens and does back testing in addition to having other capabilities. Let’s talk a little about each of these capabilities.

All the standard charts plus a whole section that we call Market Intelligence (based on the concept of Business Intelligence).

To view this content you must be an active member of the CMT Association.
Not a member? Join the CMT Association and unlock access to hundreds of hours of written and video technical analysis content, including the Journal of Technical Analysis and the Video Archives. Learn more about Membership here.

Contributor(s)

Back to top
5 STEPS TO GETTING INVESTMENT RISK UNDER CONTROL

5 STEPS TO GETTING INVESTMENT RISK UNDER CONTROL

Editor’s note: this article was originally published in the Winter 2015 issue of Financial Executive magazine and is reprinted here with permission.

Without risk none of us would make any money in the markets, but managing trading risk is a lot more complicated that one might like. Often risk limits are set arbitrarily. Risk is impacted by trader performance, units traded, the typical risk per trade, and whether the risk per trade is statistically appropriate, or too high, or too low.  If the risk is too low that means you constantly see your stops hit and exceeded, only for the market turn back in your favor. If the risk is too high, you will stay in losing positions too long, and give up too much on profitable exits. Proper stops cannot be placed purely on one’s comfort level, or budget, but are dictated by market conditions and volatility.

Step One:

To view this content you must be an active member of the CMT Association.
Not a member? Join the CMT Association and unlock access to hundreds of hours of written and video technical analysis content, including the Journal of Technical Analysis and the Video Archives. Learn more about Membership here.

Contributor(s)

Cynthia A. Kase, CMT, MFTA

Back to top
THE ULTIMATE WAY TO BACK TEST YOUR BEST IDEAS: GLOBAL FINANCIAL DATA

THE ULTIMATE WAY TO BACK TEST YOUR BEST IDEAS: GLOBAL FINANCIAL DATA

Technical analysis is based on the idea that history tends to repeat and to determine if history repeats we need to study the past. It’s probably an understatement to say that Global Financial Data can help analysts study the past with data series that covers centuries.  As an example, U.S. government bonds have been traded for more than 220 years. A comprehensive backtest could be done using the entire data series to determine what happens in war and peace, high inflation and low inflation or any other economic, political or social conditions.

Before the MTA Symposium, I spoke with Dr. Bryan Taylor, President and Chief Economist for Global Financial Data.

Bryan, can you tell us a little about the data that GFD offers?

Global Financial Data offers the

To view this content you must be an active member of the CMT Association.
Not a member? Join the CMT Association and unlock access to hundreds of hours of written and video technical analysis content, including the Journal of Technical Analysis and the Video Archives. Learn more about Membership here.

Contributor(s)

Back to top
WILT THE STILT GETS THE JILT

WILT THE STILT GETS THE JILT

Editor’s note: this was originally published at the Global Financial Data blog and is reprinted here with permission.

Global Financial Data has stock histories for over 50,000 securities.  Some of these stocks cover centuries of data; others are quite short, lasting only a few months or even a few days.  One of the most interesting of these is Wilt Chamberlain’s Restaurants, Inc. for which there are only two days of data.

Wilt the Stilt

Wilt Chamberlain was one of the greatest, some would argue the greatest, basketball players in history.  He holds 71 NBA records, and he is the only person to score 100 points in a single game. He averaged more than 40 to 50 points per game in some seasons, and in one season he played every minute of every game. Chamberlain was 7-foot 1-inch and played for the University of Kansas, Harlem Globetrotters, the Philadelphia/San Francisco Warriors, Philadelphia 76ers

To view this content you must be an active member of the CMT Association.
Not a member? Join the CMT Association and unlock access to hundreds of hours of written and video technical analysis content, including the Journal of Technical Analysis and the Video Archives. Learn more about Membership here.

Contributor(s)

Dr. Bryan Taylor

Back to top

New Educational Content This Month

Back to top