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Technically Speaking, August 2010

Letter from the Editor

The MTA Annual Award recognizes significant accomplishments in the field of technical analysis. It has been bestowed for pioneering work, an insightful innovation, or an extraordinary career. This year’s winner offers an example of an extraordinary career. Robert Peirce, the 2010 Annual Award winner is discussed briefly in this issue, and his story illustrates that technical analysis can be applied to investment management. All too often we hear that technical analysis is not widely accepted in the finance world. Nothing could be further from the truth, and Bob Peirce is but one  example among many where technical analysis was applied professionally. One problem that does damage the reputation of professional technicians is that many people attempt to apply technical analysis without possessing great skill or applying sound techniques. The best defense against the misconceptions inspired by poor analysis is quite possibly your MTA membership. We discuss that idea elsewhere in this issue and hope that all members will let potential employers and clients know that they are bound to follow the industry’s

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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.

What's Inside...

Robert Peirce: 2010 MTA Annual Award Winner

In the November 1987 issue of the MTA Journal, Gail Dudack wrote a short paragraph which may very well be the best description of the Award: It is written in the constitution that one of MTA’s...

McClellan Financial Publications (http://www.mcoscillator.com/)

by Tom McClellan & Sherman McClellan

Editor’s note: Sherman McClellan has made incredible contributions to the field of technical analysis and the Market Technicians Association over the many years that he has been in the business....

MTA Video Archives: Katherine Townshend Stockton, CMT

by Katie Stockton, CMT

In May 2007, Katie offered MTA Symposium attendees a short tutorial on applying relative strength. The complete presentation can be seen by clicking here. The MTA Video Archive contains a number of...

Efficient Market Hypothesis' False Reign Over Financial Markets

by David Waggoner, CMT

This article was previously published at http://www.minyanville.com/businessmarkets/articles/efficient-markethypothesis-rwt-emh-technical/7/26/2010/id/29311 and is reprinted with the permission of...

Can Anyone be a Technical Analyst?

by Michael Carr, CMT

Sadly, the answer to that question is yes. All it seems to take is the time to create a blog account before some writers claim that they are providing market insights and analysis. The rapid and easy...

MTA Announcements

MTA Press and Media Center – New Page on MTA.org! The MTA is pleased to announce the launch the new Press & Media Center page on our website. This page will showcase all MTA Press Releases...

Robert Peirce: 2010 MTA Annual Award Winner

Robert Peirce: 2010 MTA Annual Award Winner

In the November 1987 issue of the MTA Journal, Gail Dudack wrote a short paragraph which may very well be the best description of the Award:

It is written in the constitution that one of MTA’s prime goals is to encourage high standards of professionalism and ethics among technical analysts. In the spirit of this goal, the MTA initiated an Annual Award for Outstanding Contribution to the Field of Technical Analysis in 1974. The Awards Committee, consisting of three past presidents of the MTA, has selected the following technical analysts to receive the engraved silver Revere bowl award…

Gail then listed the first winners, true pioneers in the field. Since the first Award was made in 1974, forty-one technicians have been recognized with this honor. The complete list can be found at http://www.mta.org/eweb/DynamicPage.aspx?webcode=annualawards. This year, the MTA added Robert Peirce to this distinguished list. Bob described his career with characteristic

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.

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McClellan Financial Publications (http://www.mcoscillator.com/)

McClellan Financial Publications (http://www.mcoscillator.com/)

Editor’s note: Sherman McClellan has made incredible contributions to the field of technical analysis and the Market Technicians Association over the many years that he has been in the business. His son, Tom, joined him after attending West Point and enjoying a successful military career. Tom’s contributions are equally as significant as those of his father and mother, Marian. Together they produce two well-regarded subscription services, and they offer a variety of interesting and unusually useful free research at their web site. You can also download free breadth data at http://www.mcoscillator.com/market_breadth_data/

The following articles are taken directly from the web site, and additional artcicles can be found at http://www.mcoscillator.com/learning_center/

Calculating The Coppock Curve (originally published at http://www.mcoscillator.com/)

“I have heard about the “Coppock Curve” but I cannot find it on my charting program. Do you know how it is calculated?“

The Coppock Curve was developed in the 1960s by the late E.S.C. (Sedge) Coppock.

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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)

Tom McClellan

Sherman McClellan

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MTA Video Archives: Katherine Townshend Stockton, CMT

MTA Video Archives: Katherine Townshend Stockton, CMT

In May 2007, Katie offered MTA Symposium attendees a short tutorial on applying relative strength. The complete presentation can be seen by clicking here.

The MTA Video Archive contains a number of valuable presentations like this one. While they may seem dated, and some may in fact be out of date, this one is a timeless example of how to analyze the markets. In addition, Katie provides a lot of detail on how she does her job, and seeing how a successful technician works is valuable for newcomers to the business as well as experienced technicians who benefit from seeing what others are looking at.

Beginning with a definition of relative strength, Katie walked through how she uses relative strength and other indicators and wrapped up by giving her current views of the markets. In the first few slides, she demonstrated the diversity of relative strength analysis, which can be used in

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)

Katie Stockton

Katie Stockton, CMT

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Efficient Market Hypothesis' False Reign Over Financial Markets

Efficient Market Hypothesis' False Reign Over Financial Markets

This article was previously published at http://www.minyanville.com/businessmarkets/articles/efficient-markethypothesis-rwt-emh-technical/7/26/2010/id/29311 and is reprinted with the permission of the author.

American academic institutions of higher learning expelled technical analysis from school and labeled it heresy in the 1970s based on the Efficient Market Hypothesis (or EMH).

EMH is the cornerstone of modern finance. Ironically, this slayer of technical analysis shares a philosophical base with it. Efficient Market Hypothesis asserts “that market prices fully reflect all information contained in the historical sequence of prices.” This sounds a lot like Dow’s basic tenet that price discounts everything.

Charles Dow organized stocks into indexes and provided tenets for interpreting the price movement of those indexes through a series of articles in the Wall Street Journal in the late 1800s to early 1900s. He believed the sum total of all causal factors, including “acts of God” were already included in the price of the market (market discounts everything) and a person

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 Waggoner, CMT

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Can Anyone be a Technical Analyst?

Can Anyone be a Technical Analyst?

Sadly, the answer to that question is yes. All it seems to take is the time to create a blog account before some writers claim that they are providing market insights and analysis. The rapid and easy dissemination of information is an advantage of the internet, and at the same time creates a junkyard of market analysis. 

This problem is not just limited to technical analysis. Sloppy fundamental analysis and incoherent economic analysis can also be found on blogs and sites that will even sell you their flawed analysis for as little as $29.95, and yes, there is usually a bonus for acting right now – often you can get twice as much of the most worthless analysis by subscribing for two years at half price.

Amidst the chaos of the internet and the plethora of pundits, the Market Technicians Association offers its Members the chance to stand out and have their

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

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MTA Announcements

MTA Announcements

MTA Press and Media Center – New Page on MTA.org!

The MTA is pleased to announce the launch the new Press & Media Center page on our website. This page will showcase all MTA Press Releases as well as a new feature called the MTA Newswire. The MTA Newswire is a new, automated service that  cans the internet for articles relating to technical analysis, the Market Technicians Association, the Chartered Market Technician designation, and other relevant member-related stories. For those members that are writing articles online, this service will display your article on the mta.org website if it mentions technical analysis, the MTA, or if you use the CMT designation after your name.

MTA Knowledge Base – Recent Additions!

The MTA would like to announce that the following resources have been added to the MTA Knowledge Base.

    • Directional Movement Indicator (DMI) and Average Directional Index (ADX) – (Knowledge

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.

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New Educational Content This Month

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