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Technically Speaking, August 2007

* Due to time sensitive submissions there will not be a letter from the Executive Director or Editor this month. *

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What's Inside...

Market Thoughts... An Interview with Bernie Schaeffer

by Ryan Detrick, CMT & Bernie Schaeffer

Ryan Detrick, CMT, recently interviewed Bernie Schaeffer, Chairman and CEO of Schaeffer’s Investment Research, Inc. and author of Wiley Publishing’s The Option Advisor: Wealth-Building Techniques...

Moving Average Analysis

by Frank E. Testa, CMT

A moving average is a line heavily followed by market technicians that is constructed by taking the average of data for a certain number of time periods. For instance, a 20-day simple moving average...

Markets and Indexes

by Ken Winans, CMT

Over the past few years, stock market analysts have seen a proliferation of indexes, allowing them to dig deeper into market movements. Understanding what the index actually measures is important to...

Members in the Media

by Buff Dormeier, CMT & Robert Prechter & Bernie Schaeffer

Buff Pelz Dormeier, CMT won last year’s Charles H. Dow Award. His winning paper Price and Volume, Digging Deeper was published in the July 2007 issue of Technical Analysis of Stocks &...

Johnny, They Hardly Knew You…

by Ralph Acampora, CMT

It was about 8 AM on a sweltering New York City morning in mid summer 1967 when I first met John Charles Brooks. We had just gotten off our respective subway trains (very over crowded and not...

Reflections

by Fred Meissner, CMT

We have all seen that one of the MTA’s cofounders, John Brooks, has recently passed away, after a long illness. I attended the funeral, and memorial for John, and several things made such a strong...

A Letter From the New Chapter Chair

by Matt Trump, CMT

Dear fellow MTA members and affiliates: I am pleased to announce the launch of the Baltimore Chapter of the MTA. I believe it is in our best interest to strive for a Chapter in all 50 states. Even...

A Letter From the Chapters Committee Chair

by David Keller, CMT

Hello, my name is David Keller. I have recently been approved by the MTA Board of Directors as the Committee Chair for the MTA Regions Committee. My role is to enhance the benefits of active...

Market Thoughts... An Interview with Bernie Schaeffer

Market Thoughts... An Interview with Bernie Schaeffer

Ryan Detrick, CMT, recently interviewed Bernie Schaeffer, Chairman and CEO of Schaeffer’s Investment Research, Inc. and author of Wiley Publishing’s The Option Advisor: Wealth-Building Techniques Using Equity and Index Options. He has edited the Option Advisor newsletter since its inception in 1981, and it has grown to be the nation’s leading options newsletter. In 1997, Bernie launched SchaeffersResearch.com, a four-time winner of Forbes “Best of the Web” award. The site has also been named the top options website by Barron’s and received positive mention in The Wall Street Journal Guide to Online Investing.

Bernie is widely recognized as an expert on equity and index options, investor sentiment and market timing. Timer Digest has been monitoring his work  since 1984 and ranks him as the #2 Gold Timer forthe past 10 years and the #3 Gold Timer for the past 5 years. Furthermore, among more than 100 of the nation’s top market

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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)

Ryan Detrick, CMT

Bernie Schaeffer

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Moving Average Analysis

Moving Average Analysis

A moving average is a line heavily followed by market technicians that is constructed by taking the average of data for a certain number of time periods. For instance, a 20-day simple moving average (SMA) is calculated by adding up the close of trading of a security for 20-days and then dividing the sum by 20. The line “moves” as the oldest data in the equation is dropped off and replaced by the newest data. Hence, the moving average will lag the price performance of the actual security. In an attempt to reduce the lag, some practitioners will rely on an exponential moving average (EMA), which gives greater weight to the more recent data. Another way to reduce the lag is for an investor to shorten the time period of the simple moving average. For instance, a 20-day moving average will track the performance of the security more closely than

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)

Frank E. Testa, CMT

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Markets and Indexes

Markets and Indexes

Over the past few years, stock market analysts have seen a proliferation of indexes, allowing them to dig deeper into market movements. Understanding what the index actually measures is important to investment success, and an often overlooked equirement of analysis. Ken Winans, CMT, identified the need for a greater variety of indexes several years ago, specifically noting that there was no standard to examine the performance of preferred stocks and residential real estate.

Ken is a money manager and several years ago he observed there was a shortage of suitable bonds for his clients’ accounts. His research demonstrated that preferred stocks offered several advantages over corporate bonds, such as better performance relative to volatility and the fact that the income can qualify for the lower dividend tax rate. Many issues have enough liquidity to trade and technical analysis techniques can be successfully applied to these securities. Looking at preferred stocks, he

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)

Ken Winans, CMT

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Members in the Media

Members in the Media

Buff Pelz Dormeier, CMT won last year’s Charles H. Dow Award. His winning paper Price and Volume, Digging Deeper was published in the July 2007 issue of Technical Analysis of Stocks & Commodities.

Robert Prechter, CMT and Wayne Parker published “The Financial/Economic Dichotomy in Social Behavioral Dynamics: The Socionomic Perspective” in the August issue of the Journal of Behavioral Finance. The authors contend that they have placed a solid line of demarcation between the fields of economics and finance for the fist time, identifying stark differences in how people approach financial decisions and economic decisions, beginning at the individual neurological level and extend to the behavior of social aggregates.

Prechter is Executive Director of the Socionomics Institute http://www.socionomics.org/ in Gainesville, Georgia. He is also President of Elliott Wave International, a financial advisory firm. Parker is Executive Director of the Socionomics Foundation. 

MTA Member Bernie Schaeffer and Jocelynn Drake published “Deciphering Greek: Making Use

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)

Buff Dormeier, CMT

Robert Prechter

Bernie Schaeffer

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Johnny, They Hardly Knew You…

Johnny, They Hardly Knew You…

It was about 8 AM on a sweltering New York City morning in mid summer 1967 when I first met John Charles Brooks. We had just gotten off our respective subway trains (very over crowded and not air-conditioned); he came in from Brooklyn and I arrived from the Bronx. We unceremoniously met on the pick-up line at the office of Morgan, Rogers and Roberts, located at 150 Broadway. It was customary in those days that the youngest employees in the technical research departments were  responsible for picking-up the daily point and figure price reversal data. Neither of us could dilly-dally because it was our charged responsibility to rush back to our respective desks  and plot the charts of the entire library of NYSEand AMEX listed stocks (one-point reversals and 1 x 3 charts. Depending upon the price of the stock, we often did

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)

Ralph Acampora, CMT

Ralph Acampora, CMT

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Reflections

Reflections

We have all seen that one of the MTA’s cofounders, John Brooks, has recently passed away, after a long illness. I attended the funeral, and memorial for John, and several things made such a strong impression that I felt I had to write about them.

We all knew that “Brooksie” had been ill for over a year, but when the word came that he had taken a turn for the worse, many people felt that we had to reach out to him in some way. Alas, he was gone almost immediately, and our time with him had simply run out. I made plans, and helped others make plans to attend the funeral services, in a rush. I also contacted as many old friends of John’s in Atlanta as I could find.

I was the “voluntary driver” for Phil Roth, current MTA President, and Ralph Acampora, co-founder along with “Brooksie” of the MTA.

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)

Fred Meissner, CMT

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A Letter From the New Chapter Chair

A Letter From the New Chapter Chair

Dear fellow MTA members and affiliates:

I am pleased to announce the launch of the Baltimore Chapter of the MTA.

I believe it is in our best interest to strive for a Chapter in all 50 states.

Even though the MTA is not in its infancy, the widespread use of those who have obtained the CMT designation within the financial industry still is. It’s amazing to find, when one does an online job search, the overwhelming demand for those who have the CFA or CFP designation, but nil when it comes to those who hold the CMT designation. I hope that will change. The MTA’s job bank is great in filling that void, which currently exists through traditional online job search agents.

One of the challenges we all face, is the propagation of technical analysis throughout the investment community.

We need a paradigm shift in our thinking to one not focused solely on meetings benefiting

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)

Matt Trump, CMT

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A Letter From the Chapters Committee Chair

A Letter From the Chapters Committee Chair

Hello, my name is David Keller. I have recently been approved by the MTA Board of Directors as the Committee Chair for the MTA Regions Committee. My role is to enhance the benefits of active membership in the local MTA chapters. I also run the largest MTA chapter, the New York region.

I firmly believe that local chapter involvement provides the optimal opportunity for exchanging ideas on technical analysis, networking with professionals in the area, and building momentum in our industry. If you have not attended a local chapter meeting (current locations are shown on the above map) I would definitely urge you to do so.

As you can see from the map, we have many locations that would benefit from having a new chapter. If you are interested in starting a chapter in your area, please contact me or Tim Licitra. We can walk you through the process of establishing a

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)

David Keller, CMT

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New Educational Content This Month

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