Technically Speaking, August 2024

Hello Technical Thinkers!

Registration for the December Exam is in full swing! As someone just starting the exam process, I can’t help but be filled with anticipation every time I think about test seasons. There is much that goes into the process, both on the side of the tester and the Association, and I’m so grateful to experience both. I find it especially gratifying to witness the discussions about ways to best support the test takers and then experience that support myself along my journey. I’m thankful to people like Stan Dash, who I hear talk about the intricacies of the textbook, whenever I read a page of the course. Then I call the wonderful Barbara Terry and ask her to help make sure my membership data is accurate only to hear her the following week speak about how she’s helped countless others to do the same. I’m continuously impressed by my collogues passion for this Association and its members, new and old.

More than just the immediate staff, CMT Association is given life by the members who get involved. Just in the last month there were members from Ahmedabad, Hong Kong, and New York who met together to share their views and experience. In this issue of Technically Speaking you can find recaps and insights of those meetings, as well as news of the growth and prowess of individuals. I hope you enjoy reading as much as I enjoyed compiling.

May that which is sacred to you bring you opportunity this month!

-Alayna Scott

To view this page as a shareable PDF, click here!

What's Inside...

Becoming a CMT Charterholder: The Path to Professional Membership and Credential Maintenance

Tyler Wood, CMT

For finance professionals who have successfully navigated the rigorous three levels of the Chartered Market Technician (CMT) exams, the journey...

CMT Highlight - TACK ETF

Katie Stockton, CMT

Kevin Abbott, CMT

Will Tamplin

With a foundation in technical analysis, the Fairlead Tactical Sector ETF (NYSE: TACK) is a rules-based, dynamic strategy that seeks...

Letter From the Board - Ananda Bhaumik

Ananda Bhaumik, CTP, CMT, CFTe

After two great write-ups by my fellow Board members, Bill Kelleher (June ’24) and Kelly Corbiere (July ’24), it’s now...

Trademark Usage Guide for CMT Charterholders

Kaizad Marolia

While you are a CMT Charterholder, as defined in the CMT Association By-Laws (PDF), you have the right to use...

CMT Credly Badge

Tyler Wood, CMT

Credly is a leading digital credentialing platform that enables...

A Word from the Governance Commitee

Gina Martin Adams, CMT, CFA

One of the requirements of serving on the Board of Directors is that members volunteer to be on at least...

Networking in Action: The CMT Association's NYC Happy Hour at Havana Social

Tyler Wood, CMT

Building community for investors, traders, and others in our field is what the CMT Association, Inc. and Stocktwits...

Visit Direct Trading Technologies in Mumbai

Kaizad Marolia

One of our 2024 Dubai Summit Sponsors Direct TT is coming down to India and looking to meet our community...

Backtesting and Enhancing the Bloodbath Indicator

Lee Zhao, CMT

This was originally presented at the virtual Hing Kong member meet. Visit the CMT Calendar to sign up for...

Check Out Recent Webcasts!

Adam Koos, CMT, CFP®, CEPA

Webcast: The Million Dollar Blueprint: A Proven Guide to...

Unleashing Potential: The CMT Investment Challenge

Joel Pannikot

As many of you navigate through the challenging waters of the CMT exams this June, remember that the journey to...

Visualizing Relative Strength

Alex Cole

I would argue that the concept of relative strength is one of the most important in technical analysis. Of course,...

Fill the Gap with Brian Decker, CMT

Brian Decker

David Lundgren, CMT, CFA

Tyler Wood, CMT

Join us on Fill the Gap for a deep dive into the world of global fixed income portfolio management with

Becoming a CMT Charterholder: The Path to Professional Membership and Credential Maintenance

For finance professionals who have successfully navigated the rigorous three levels of the Chartered Market Technician (CMT) exams, the journey doesn’t end with passing the tests. Achieving this milestone is just the beginning of becoming a recognized CMT Charterholder. The next critical step is to apply for Professional Membership through the CMT Association, which formally grants the CMT designation and integrates individuals into a community of esteemed professionals. Here’s what aspiring CMT Charterholders need to know about this process and the ongoing responsibilities that come with maintaining their credential.

Applying for Professional Membership

After passing the CMT exams, candidates are required to apply for Professional Membership with the CMT Association to officially become CMT Charterholders. This application process involves several key steps:

1. Submit the Application: Candidates must complete the Professional Membership application form provided by the CMT Association. This form will include personal details, professional background, and evidence of passing all three levels of the CMT exams.

2. Provide References: Applicants need to provide references from current CMT Charterholders or other professional contacts who can vouch for their qualifications and integrity.
3. Pay the Membership Fee: There is a fee associated with the Professional Membership application, which helps support the CMT Association’s programs and services.

4. Adhere to the Code of Ethics: As part of the application process, candidates must agree to abide by the CMT Association’s Code of Ethics and Professional Conduct. This code emphasizes integrity, transparency, and professionalism in all market activities.

5. Review Process: The CMT Association will review the application and supporting documents. This process ensures that all candidates meet the standards required for becoming a CMT Charterholder.

Maintaining the CMT Credential

Becoming a CMT Charterholder is a significant achievement, but maintaining the credential involves a commitment to ongoing professional development and ethical practice. Here’s what is required:

1. Continuing Education: CMT Charterholders must engage in continuing education to keep their skills and knowledge up-to-date. This can include attending CMT Association events, participating in webinars, and pursuing relevant coursework. The goal is to stay informed about the latest developments in market analysis and finance.

2. Ethical Standards: Adherence to the CMT Association’s Code of Ethics and Professional Conduct is crucial for maintaining the CMT credential. Charterholders are expected to act with integrity, avoid conflicts of interest, and uphold the highest standards of professionalism in their market activities.

3. Annual Renewal: CMT Charterholders must renew their membership annually. This involves paying the renewal fee and reaffirming their commitment to the CMT Association’s ethical standards and professional requirements.

4. Reporting Requirements: Members are required to report any changes in their professional status or contact information to the CMT Association. This ensures that the Association has up-to-date records and can provide accurate member information to clients, employers, and other stakeholders.

The Value of Continuing Education and Ethics

Continuing education and adherence to ethical standards are not merely requirements—they are fundamental to the value of the CMT credential.

Continuing Education: In a rapidly evolving financial landscape, ongoing learning helps CMT Charterholders stay at the forefront of market analysis techniques, tools, and industry trends. This commitment to professional growth not only enhances personal competence but also contributes to the overall credibility of the CMT designation.

Ethical Practice: The financial industry relies on trust and integrity. By adhering to the CMT Association’s ethical guidelines, Charterholders demonstrate their commitment to ethical market behavior, which is crucial for maintaining the public’s trust and ensuring fair and transparent practices in financial analysis.

Conclusion

Achieving the CMT designation is a noteworthy accomplishment, but the journey to becoming a CMT Charterholder is complemented by the responsibilities of Professional Membership. By applying for membership, CMT exam graduates formally join a distinguished group of professionals and commit to upholding the highest standards of ethics and continuing education. This ongoing commitment ensures that the CMT credential remains a symbol of excellence and integrity in the field of market analysis. For those who have earned their CMT designation, embracing these responsibilities is key to maintaining the value and prestige of their credential throughout their professional careers.

Contributor(s)

Tyler Wood, CMT

Tyler Wood serves as CEO and Executive Director of CMT Association with the aim of elevating investors’ mastery and skill in mitigating market risk and maximizing return in capital markets through a rigorous credentialing process, professional ethics, and continuous education. He is...

CMT Highlight - TACK ETF

With a foundation in technical analysis, the Fairlead Tactical Sector ETF (NYSE: TACK) is a rules-based, dynamic strategy that seeks to leverage long-term sector trends while using asset allocation to manage risk.

Fairlead Strategies (NYSE Arca: TACK) Rings The Closing Bell®
The New York Stock Exchange welcomes colleagues, friends, and family of Fairlead Strategies, today, Thursday, December 22, 2022, in celebration of the recent listing of the Fairlead Tactical Sector ETF (NYSE Arca: TACK). To honor the occasion, Katie Stockton, Founder and Managing Partner of Fairlead Strategies and TACK Portfolio Manager, joined by Douglas Yones, NYSE Head of Exchange Traded Products, NYSE rings The Closing Bell®.
Photo Credit: NYSE

Katie Stockton, CMT, is Founder and Managing Partner of Fairlead Strategies, a technical strategy research firm launched in 2018. Katie has spent over 25 years analyzing sectors with her systematic, rules-based approach rooted in technical analysis. That experience allowed her to identify a major opportunity: to use technical analysis as the basis for an exchange-traded fund listed on the New York Stock Exchange.

“I discovered through my interactions with clients, who range from large financial institutions to financial advisors and individual investors, that many of them could benefit from a dynamic alternative to the old buy-and-hold approach to investing,” she says. “I realized I could apply my methodology to sector selection and package it as an ETF to take the burden off our clients to focus on sector selection. And that’s how TACK was born.”

As portfolio manager for TACK, Stockton applies her methodology to U.S. large-cap equity sectors. She evaluates them using classic principles of technical analysis – momentum characteristics, overbought/oversold readings, and relative strength.

“The long-term time horizon is key to TACK,” says Kevin Abbott, CMT, ETF Portfolio Specialist & Senior Analyst at Fairlead. “This isn’t a strategy that chops around with a short-term orientation. It is meant to be a core holding that invests for the long-term, or a time horizon greater than twelve months,” he adds. “An investor can buy and hold TACK and be doubly consistent with the principles of long-term investing that have long been shown to provide comprehensive returns.”

While Stockton has honed her methodology over the years to support her research and consulting business, putting it into the form of a tradeable product was partly inspired by the burgeoning ETF space, which eclipsed $9.1 trillion in AUM in June 2024, according to the Investment Company Institute. “The booming ETF market enabled the strategy to become widely available to investors and gain instant traction as an investment,” she notes.

TACK launched in March 2022, quickly amassing $100 million in assets under management (AUM) by the end of June. It surpassed $200 million in AUM in less than a year. This growth was notable as it came amidst a cyclical bear market that, at its nadir in September 2022, saw the S&P 500 Index down over 23%. A key factor in its early success was TACK’s emphasis on risk management and its investment goal of minimizing drawdowns.

“When long-term trends deteriorate, TACK can remove sector exposure and replace it with ETFs representing alternative asset classes that are historically less correlated with equities, such as U.S. Treasuries and gold,” says Stockton. “This ‘risk-off’ dynamic is a key feature of TACK’s risk management, which has resulted in a portfolio that has an historically lower beta and downside capture relative to the S&P 500.” TACK has also performed well in a ‘risk-on’ environment: the fund outperformed its benchmark, the Morningstar Moderate Target Risk Index (which approximates a 60/40 portfolio) by about 1.6% over the last year (through 7/31/24).

The success of TACK is not confined to Fairlead; it serves as validation for the discipline of technical analysis. Will Tamplin, a Senior Analyst at Fairlead who recently became a CMT charterholder, sums it up well: “Technical analysis is such a valuable approach for effective portfolio management, not only by profiting from trend-following but also to help deliver risk-adjusted returns that are necessary to achieve stable compounding in a modern portfolio.”

Disclaimer: Investors should carefully consider the investment objectives, risks, charges and expenses of the fund before investing. The prospectus contains this and other information about the fund, and it should be read carefully before investing. Investors may obtain a copy of the prospectus by calling 877-865-9549, emailing info@fairleadstrategies.com, or it may be download here.

The fund is distributed by Northern Lights Distributors, LLC (Member FINRA). Northern Lights Distributors, LLC, Fairlead Strategies, LLC, and Cary Street Partners Asset Management LLC are separate and unaffiliated. Cary Street Partners is the trade name used by Cary Street Partners LLC, Member FINRA/SIPC; Cary Street Partners Investment Advisory LLC and Cary Street Partners Asset Management LLC, registered investment advisers. Cary Street Partners is the Adviser for the Fairlead Tactical Sector ETF (TACK). For full disclaimers and disclosures, please view Disclaimers and Disclosures.

Fairlead Strategies, LLC is a registered investment adviser and the Subadviser for TACK. For access to the full disclaimers and disclosures for Fairlead Strategies, including their policy regarding editor securities holdings, go to https://www.fairleadstrategies.com/disclaimers-and-disclosures or email info@fairleadstrategies.com.

Important Risk Information:

Investing involves risk, including loss of principal. There is no guarantee the fund will achieve its investment objective. As an actively-managed ETF, the fund is subject to management risk. The ability of the Adviser to successfully implement the fund’s investment strategies will significantly influence the fund’s performance. The success of the fund will depend in part upon the skill and expertise of certain key personnel of the Adviser, and there can be no assurance that any such personnel will be successful. Neither the Adviser nor the Subadviser has previously served as an adviser or a subadviser to a mutual fund or exchange-traded fund. As a result, there is no long-term track record against which an investor may judge the Adviser and/or Subadviser.

The Fund is newly formed, which may result in additional risk. There can be no assurance that the Fund will grow to an economically viable size, in which case the Fund may cease operations. In such an event, investors may be required to liquidate or transfer their investments at an inopportune time.

The Adviser may allocate more of the Fund’s investments to a particular sector or sectors in the market, including the following sectors: Communications Services, Consumer Discretionary, Consumer Staples, Energy, Financials, Health Care, Industrials, Materials, Real Estate, Technology, and Utilities. If the Fund invests a significant portion of its total assets in a certain sector or certain sectors, its investment portfolio will be more susceptible to the financial, economic, business, and political developments that affect those sectors than a fund that is more diversified.

Beta is a measure of the volatility of a stock relative to the overall market. A stock with a beta of one would be as volatile as the market over a given period. A stock with a beta above or below one would be respectively more or less volatile than the market. Drawdown is a peak-to-trough decline during a specific period, quoted in percentage terms. The Standard and Poor’s 500 (S&P 500) is a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United States.

Contributor(s)

Katie Stockton, CMT

Katie Stockton, CMT is Founder and Managing Partner of Fairlead Strategies, LLC, an independent research firm and investment advisor focused on technical analysis. Prior to forming Fairlead Strategies, Katie spent more than 20 years on Wall Street providing technical research and advice...

Kevin Abbott, CMT

Kevin Abbott, CMT is an ETF Portfolio Specialist & Senior Analyst at Fairlead Strategies. He is focused on supporting TACK and research clients. Prior to Fairlead Strategies, Kevin spent 10 years at Fidelity Investments in Boston as a member of the Equity...

Will Tamplin

Will Tamplin is a Senior Analyst at Fairlead Strategies. He joined Fairlead Strategies shortly after graduating from the University of Richmond, where he was at the top of the business school’s Technical Analysis class. He received the CMT designation this year. Will...

Letter From the Board - Ananda Bhaumik

After two great write-ups by my fellow Board members, Bill Kelleher (June ’24) and Kelly Corbiere (July ’24), it’s now my turn to write.

This write-up introduces me as a person, so it is full of personal insights and opinions – please bear with me.

It would not be wrong to say that quite a few of the decisions I’ve made in my life, which appeared at the time as spur-of-the-moment decisions, turned out well. Switching to banking from insurance was one, and taking the CMT exams in 2106-17 was another.

Though I have been practising technical analysis for some time, my daughter’s challenge, who was then starting her master’s at the London School of Economics, prompted me to take the exams—she joked that I was too old to study!

I received the Charter in 2017, and soon afterwards, I became active in the Hong Kong Chapter. In late 2022, I was invited to join the Board. As luck would have it, 2023 was the 50th anniversary of the CMT Association and during the annual symposium in New York in April, I had the fantastic opportunity to be on the balcony of the NYSE with other Board Members as fellow Board Member Jay Woods rang the Closing Bell.

(https://www.youtube.com/watch?v=GnwXieqUJQM)

To read the full letter, click here to open this month’s shareable PDF

Contributor(s)

Ananda Bhaumik, CTP, CMT, CFTe

Ananda Bhaumik is a Senior Partner with UCAP HK Asset Management, a part of the Union Capital Group of companies with common shareholder interests. The Group has presence in nine countries and provides tailor-made investment solutions to individual investors and family offices....

Trademark Usage Guide for CMT Charterholders

While you are a CMT Charterholder, as defined in the CMT Association By-Laws (PDF), you have the right to use the following marks:
• CMT®
• Chartered Market Technician®

These marks are commonly referred to as the “CMT Marks.” They are recognized symbols of professionalism and integrity that distinguish charterholders from other investment professionals around the world.

The uses of the CMT Marks are governed by the Code of Ethics and standard VII(B) of the Standards of Professional Conduct and applicable laws. CMT Marks can only be used by charterholders who are Members in good standing not subject to certain Professional Conduct violations and whose rights to use the CMT designation have not been suspended or revoked.

Use of the CMT Marks signifies that you have earned the prestigious CMT charter. It is important to use these marks properly and to be mindful of improper use or infringement.

To assist you, CMT Association has developed the trademark usage guide below. Please consult and follow this guide when preparing business cards, letterhead, promotional literature, signage, and all other forms of printed, electronic, and written communications.

Trademark Usage Guide
The examples set forth here are intended to illustrate proper usage of the CMT Marks. This is not an exhaustive list, nor is it an exhaustive discussion of your obligations, so if questions do arise please contact the CMT Association staff by e-mail at admin@cmtassociation.org. You should also contact staff if you become aware of improper usage or infringement of any of the CMT Association marks.

Certification Mark

Purpose of the Certification Mark

The Certification Mark is used by charterholders as a distinctive visual symbol of the CMT designation that can be easily recognized by employers, colleagues, and clients. In essence, use this mark as a seal of quality and integrity, in close proximity to your name.

Use of the Certification Mark
The certification mark may not be altered or modified in any way.

The certification mark should be clearly printed in black ink on light colored backgrounds or may be reversed to white on dark colored backgrounds.

All reproduction of the certification mark must be made from camera-ready artwork provided by CMT Association.

The certification mark can be used to identify a group of individuals; however, each individual listed must be a current charterholder.

The trademark notice does not have to appear on letterhead or business cards.

The certification mark must not be used as part of a company name or logo.

The certification mark should be placed in close proximity to the charterholder’s name. However, the certification mark should have enough clear space that it is not connected or a part of the charterholder’s personalization or degree. The certification mark shall not be confused with a company logo or placed in such close proximity to a company name or logo so as to give the reader the idea that the certification mark certifies the company.

The CMT® and Chartered Market Technician® Marks

Purpose of the CMT Marks
The trademarks CMT® and Chartered Market Technician® are intended for use whenever the certification mark cannot be used.

Use of the CMT Marks
The CMT® and Chartered Market Technician® marks should be used in the text of magazine and newspaper articles, interviews, books, advertising, and in textual or verbal contexts where use of the visual certification mark is impossible or impractical. When these text-only marks are used in these contexts or applications, charterholders should carefully advise reporters, authors, editors, publishers, and others as to the guidelines for proper usage.

Generic Use
The CMT® mark must not be used generically (as a noun) and should only be used as an adjective. The mark becomes generic when it is used as a common name for a category of products or services.

References to all facial tissues as Kleenexes, all photocopies as Xeroxes, and all market technicians as “CMTs” are improper and are considered generic. If the use becomes generic, CMT® charterholders lose their exclusive use of these valuable marks. If you are using the marks correctly, you should be able to omit the CMT from a sentence and still have the sentence make sense. For example, “John Smith is a CMT charterholder.”
Proper:

John Smith is a CMT® charterholder.
Amy Jones, CMT, is a portfolio manager.
John Smith is a holder of and has the right to use the Chartered Market Technician® designation.

Improper:

John Smith is a CMT.
John Smith is a Chartered Market Technician.
John Smith and Amy Jones are CMTs.

Registered Trademark Symbol
The first and most prominent use of the CMT® or Chartered Market Technician® marks in text material should include the registered trademark symbol (®). It is not necessary to use the ® symbol when the marks directly follow the name of a specific individual.
Proper:

John Smith is a CMT® charterholder.
Three analysts at the firm hold the Chartered Market Technician® designation.

Property of CMT Association
Always specify in a tag line at the end of an article and at the bottom of an advertisement or promotional literature that the marks are the property of CMT Association.
Proper:

CMT® and Chartered Market Technician® are registered trademarks owned by CMT Association.

Proper Capitalization
The CMT® mark must appear in all capital letters. With respect to Chartered Market Technician®, at a minimum, the first letter of each word must be capitalized.
Proper:

John Smith, CMT®
John Smith, CMT
John Smith, Chartered Market Technician®

Improper:

Amy Jones, Cmt
John Smith, chartered Market Technician

Modification or Incorporation
The CMT® and Chartered Market Technician® marks must not be used as part of, or incorporated in, the name of a company or imply that the company is entitled to use the marks. Additionally, the marks may not be used in a charterholder’s e-mail address or in a personal or company domain name.
Improper:

Amy Jones Chartered Market Technician Advisory, Inc.
www.johnsmithWealthCMT.com

Additional Guidelines
The form of the marks must never be altered to create a new word, phrase, or design. The marks may never be used in the plural or possessive forms.

Contributor(s)

Kaizad Marolia

Kaizad Marolia has over 10 years of work experience across the financial and educational industries and is currently the Head of Partnerships and Growth in Asia at CMT Association, the top global credentialing and advocacy body for technical analysis, as well as...

CMT Credly Badge

Credly is a leading digital credentialing platform that enables individuals to showcase and share their verified skills and achievements online, enhancing transparency and trust for employers and peers. The CMT Credly Badge is an important digital representation of this achievement. The following guidelines ensure proper and consistent use of the CMT Credly Badge.

Eligibility: Only individuals who have successfully completed all requirements of the CMT Program and have been awarded the CMT designation and charter by CMT Association are eligible to use the CMT Credly Badge. The badge is issued through Credly, you will need to create an account on Credly and claim the badge. Please be sure to use the same email id as the one you have used while applying for the charter.
Proper Use of the Badge:
1. Display: The CMT Credly Badge must be displayed on digital platforms such as LinkedIn, email signatures, personal websites, and professional portfolios where possible.
2. Linking: The badge must link back to the Credly platform where viewers can verify the credential’s authenticity. This ensures that the badge remains credible and trustworthy.
3. Accuracy: The badge must always be used accurately and in a way that reflects the holder’s current status. If a member’s CMT designation is revoked or suspended, they must immediately cease using the badge.
Prohibited Uses:
1. Alteration: The badge must not be altered, including changing colors, resizing disproportionately, or adding additional text or graphics.
2. Misrepresentation: The badge must not be used in a manner that implies the holder has qualifications or endorsements that they do not possess.
3. Unauthorized Use: Non-holders of the CMT designation are strictly prohibited from using the CMT Credly Badge.
Badge Expiry and Renewal:
The CMT Credly Badge does not expire as long as the individual maintains their CMT designation in good standing.
If the CMT Association updates the badge design or standards, holders may be required to update their badge to the latest version.
Reporting Misuse: Any misuse of the CMT Credly Badge should be reported to the CMT Association immediately. Misuse may result in disciplinary action, including revocation of the CMT designation.
Compliance: By using the CMT Credly Badge, the holder agrees to comply with these guidelines and any additional terms set forth by the CMT Association. The CMT Association reserves the right to modify these guidelines at any time and may take legal action to protect its intellectual property and brand integrity.

Learn More about CMT Charterholder’s Credly Digital Badge – https://cmtassociation.org/development/digital-badging/

Learn how to Manage & Share Your Digital Credentials – https://learn.credly.com/blog/how-to-manage-share-your-digital-credentials

Contributor(s)

Tyler Wood, CMT

A Word from the Governance Commitee

One of the requirements of serving on the Board of Directors is that members volunteer to be on at least one committee. As the CMT Association is a volunteer organization with a small staff, committees perform a crucial role in keeping our organization highly functional. There are lots of committees powered by volunteers who contribute their time to better our organization and improve the value of the CMT designation for everyone. Some committees are comprised only with Directors, while other committees can be made up of CMT members. Click here to view the list.

The Governance Committee, which I currently Chair, is made up of five board members. We serve to advise the Board and aim to shape board governance policies. In my opinion, the Governance Committee works somewhat like the coach of a sports team – they don’t score the points, but having a good coach is one key to having a winning team.

Here are some of the more important things the Governance Committee does.

Manage the annual board member refreshment process. All CMT members can nominate candidates to become board members, but the Governance Committee is responsible for evaluating the list of nominees, interviewing qualified candidates, and then proposing a recommended slate of candidates. This slate is then voted on by the Board and, if approved, put up for election by members. The Governance Committee takes into account the collective skills, experiences, and diverse perspectives of candidates that make the Board more effective in leading the association. It’s a year-round responsibility, updating the “pipeline” of potential board member candidates.

Oversee the Board’s self-evaluation process, which measures the performance of individual Directors and the Board overall. There is no shortage of impressive CMT members who are willing to serve on the Board, so it’s crucial that current Directors are doing their jobs well and contributing to the Board’s success.

Propose improvements to the Constitution and Bylaws. Sometimes, because of changing industry and demographic trends, it makes sense to reevaluate our governing documents. Any changes that materially affect CMT members have to be voted upon and approved by the membership. But the Governance Committee regularly reviews the CMT Constitution and Bylaws and proposes changes when/if they are deemed beneficial.

Review the performance of the various committees. Similar to the oversight of who serves on the board, the Governance Committee also looks at which committees exist, who the leaders are, who serves on them, and whether the committees are performing well. Ultimately, it’s the role of the President to manage the committees, but the Governance Committee can recommend people for leadership roles. After all, serving on a committee is the best way for future board members to get familiar with the CMT Association’s board and the operations of the association.

Are you interested in helping out? There are opportunities to serve on committees and you don’t necessarily need prior experience. If you’d like to find out more, visit https://cmtassociation.org/association/volunteer-committees/join-a-volunteer-committee/.

Gina Martin Adams, CMT, CFA

Chair of the Governance Committee

Contributor(s)

Gina Martin Adams, CMT, CFA

Gina Martin Adams, CMT, CFA, is the Global Head of Portfolio Strategy and Chief Equity Strategist for Bloomberg Intelligence, a unique research platform that provides context on markets, industries, companies, and government policy, available on the Bloomberg Professional Service at BI. Gina...

Networking in Action: The CMT Association's NYC Happy Hour at Havana Social

Building community for investors, traders, and others in our field is what the CMT Association, Inc. and Stocktwits are all about.

Had a blast relaunching the CMT’s NYC Chapter events at our summer social last night. Shout out to the 60+ people who attended; keep your eye out for the next one soon!

cc: Tyler Wood, CMT, Jay Woods, CMT, Todd Sohn, Mark Newton, CMT, Jessica Menton, and many more that I missed!

On July 18, 2024, the CMT Association is set to host a vibrant NYC Happy Hour at Havana Social in Lower Manhattan, exemplifying their commitment to building a connected and engaged community of financial professionals. This event is more than just a social gathering; it’s a strategic initiative designed to foster meaningful connections, share industry insights, and enhance professional relationships in a relaxed yet professional setting.

Prime Location for Networking

Havana Social, known for its sophisticated ambiance and central location, provides the perfect backdrop for this networking event. Situated in the heart of Lower Manhattan, the venue is easily accessible for many professionals working in the financial district and surrounding areas. The choice of location reflects the CMT Association’s intent to create an inviting environment where members can comfortably engage and network.

Connecting with Peers and Leaders

The NYC Happy Hour is an opportunity for CMT charterholders, analysts, and market professionals to come together outside the formal confines of a conference or seminar. By creating a casual atmosphere, the event encourages open conversation and networking, allowing participants to connect with both peers and industry leaders. Attendees can discuss market trends, share personal insights, and explore potential collaborations in a setting that fosters informal yet valuable interactions.

Expanding Professional Networks

Events like the NYC Happy Hour are pivotal in expanding professional networks. For many attendees, it’s a chance to meet new contacts, reconnect with former colleagues, and build relationships that can lead to future opportunities. The informal nature of the happy hour helps break down barriers, making it easier for members to engage in genuine conversations and forge new connections.

Enhancing Member Engagement

The CMT Association’s focus on events like this underscores their dedication to member engagement and community building. By organizing such gatherings, they demonstrate a commitment to not only the professional development of their members but also to creating a sense of belonging within the financial community. The happy hour serves as a platform for members to engage with the Association in a meaningful way, reinforcing their connection to the organization and its mission.

A Reflection of the CMT Association’s Values

The NYC Happy Hour is a reflection of the CMT Association’s broader strategy to support and develop a robust professional network. It aligns with their goal of providing members with opportunities to connect, collaborate, and grow within the industry. By hosting events that blend professional networking with social interaction, the Association fosters a more engaged and dynamic community.

In summary, the NYC Happy Hour at Havana Social on July 18 exemplifies the CMT Association’s commitment to building a connected and engaged network of financial professionals. It offers a valuable opportunity for members to engage in meaningful conversations, expand their professional networks, and contribute to the vibrant community that the Association strives to cultivate.

Building a Connected Community: How the CMT Association Fosters Networking and Collaboration

In an increasingly interconnected world, professional networking is more crucial than ever. For members of the CMT Association, a leading organization in technical analysis and market research, networking is not just an opportunity—it’s a cornerstone of professional growth and community building. Through a series of strategic networking events, the CMT Association is fostering a vibrant, interconnected community of professionals who are driving the future of financial markets.

The Power of Networking in Financial Markets

Networking within the financial sector is about more than just exchanging business cards. It’s an opportunity to engage with industry leaders, share insights, and collaborate on strategies that can impact markets on a global scale. For CMT Association members, these connections are invaluable for staying ahead of market trends, understanding emerging technologies, and enhancing their own professional skills.

Diverse and Dynamic Events

The CMT Association has embraced a multifaceted approach to networking, offering a range of events designed to cater to different interests and professional needs. These include:

Annual Conferences: The flagship event of the CMT Association, the Annual Conference, brings together a diverse group of professionals, including top analysts, portfolio managers, and academics. These conferences feature keynote speeches, panel discussions, and breakout sessions, providing ample opportunities for networking and learning.

Regional Meetups: Recognizing the importance of localized connections, the CMT Association hosts regional meetups and seminars. These events allow members to engage with peers in their geographic area, share local market insights, and build relationships that may lead to new opportunities and collaborations.

Webinars and Virtual Events: In an era where remote interactions have become the norm, the CMT Association offers a range of webinars and virtual networking events. These online gatherings provide members with access to global experts and fellow practitioners without the need for travel, making it easier to stay connected and informed.

Special Interest Groups: For members with specific interests or areas of expertise, the CMT Association supports special interest groups. These smaller, focused gatherings enable participants to dive deep into niche topics, fostering more targeted and meaningful connections.

Creating a Collaborative Environment

At the heart of the CMT Association’s networking strategy is the goal of creating a collaborative environment where members can thrive together. Events are designed to encourage open dialogue, facilitate knowledge sharing, and build a supportive community. By bringing together individuals with diverse backgrounds and experiences, the Association helps to cultivate a rich ecosystem of ideas and innovations.

Leveraging Digital Platforms

In addition to in-person events, the CMT Association utilizes digital platforms to enhance connectivity. Their online community forums and social media channels serve as additional networking tools, enabling members to engage in ongoing discussions, share resources, and support each other beyond the confines of formal events.

The Impact of Networking on Professional Growth

For CMT charterholders and other members, networking is a powerful catalyst for professional development. Engaging with peers and experts can lead to new career opportunities, valuable mentorship, and collaborative projects that push the boundaries of technical analysis and market research.

By prioritizing networking and community building, the CMT Association is not only enhancing the professional lives of its members but also contributing to the overall advancement of the financial industry. As members connect, collaborate, and grow together, they help to shape the future of market analysis and continue to drive excellence within the field.

In conclusion, the CMT Association’s commitment to fostering a connected and collaborative community through a diverse range of networking events is a testament to their dedication to professional development and industry advancement. As the financial markets continue to evolve, these connections will remain a vital asset for members striving to stay at the forefront of their profession.

Contributor(s)

Tyler Wood, CMT

Visit Direct Trading Technologies in Mumbai

One of our 2024 Dubai Summit Sponsors Direct TT is coming down to India and looking to meet our community while they are here. They will be down for the MoneyExpo India to be held in Mumbai on 17-18 August 2024. Do drop by their stall if you are around and attending the event!

Contributor(s)

Kaizad Marolia

Backtesting and Enhancing the Bloodbath Indicator

This was originally presented at the virtual Hing Kong member meet. Visit the CMT Calendar to sign up for related events.

Legendary traders Larry Williams and Ralph Vince’s 2024 Dow Award-winning paper introduced a novel investment strategy designed to circumvent market downturns. This article evaluates the “bloodbath sidestepping” 4% rule’s efficacy in the US stock market and proposes an enhancement framework. Additionally, the strategy is tested across a basket of global equity indices, demonstrating its robustness and potential for universal application.

Introduction:
In their seminal work, Larry and Ralph advocate for a strategic approach to market participation, suggesting investors remain in cash when over 4% of NYSE stocks reach 52-week lows, and re-enter the market once this metric falls below the threshold. This article examines the historical performance of this strategy using Bloomberg’s backtesting platform and proposes refinements to enhance its effectiveness.

The Benchmark Strategy:
Our analysis begins by integrating the NYSE market breadth data, specifically the percentage of members hitting new 52-week lows, as a backtesting variable. The initial strategy dictates entering long positions when fewer than 4% of NYSE stocks achieve new yearly lows and closing these positions once the indicator exceeds 4%.

Backtested on the daily chart of NYSE composite index from January 1st, 2003 to June 14th, 2024, this strategy yielded a 343.1% return with a maximum drawdown of 45.5%, outperforming a simple buy-and-hold approach (246% return and 59% drawdown).

The benchmark strategy made a total of 229 trades, of which only 95 were profitable (41.5% winning ratio). The win-loss ratio is 2.4:1.

Strategy Enhancement:
Recognizing the prevalence of “numerous, short-lived, false signals”, we introduce a smoothing technique employing a simple moving average on the raw indicator, with an initial parameter of 10. The revised trading rule utilizes the moving average to refine entry and exit points, resulting in a 479% total return and a reduced maximum drawdown to 22.7%. This enhancement significantly increases the win rate to 53% and also improves the win/loss ratio to 2.7:1.

Optimization Analysis:
Further investigation into the smoothing factor’s impact reveals an optimal range for the moving average period between 9 and 11. This finding suggests a plateau in total profit within this parameter range, indicating a balance between responsiveness and stability.

Global Portfolio Backtesting:
Expanding the strategy’s scope, we construct a diverse basket of global equity indices and apply the enhanced trading rule. The results confirm the strategy’s profitability across various regions, with an average total return of 443.2%, underscoring its universal applicability.

Conclusion:
The 4% bloodbath sidestepping rule has proven its merit over time and across different market conditions. The enhancements proposed in this article further solidify its position as a valuable tool in the investor’s arsenal. The insights provided by Larry Williams and Ralph Vince are a testament to their legendary status in the field of trading.

Contributor(s)

Lee Zhao, CMT

Lee Zhao joined Bloomberg in 2017 as Market Specialist where he is responsible for Charts, Technical Analysis & Data Visualization, and oversees the North Asia region. His recent market insights are frequently featured on Bloomberg Functions For the Market (FFM), Bloomberg News...

Check Out Recent Webcasts!

Webcast: The Million Dollar Blueprint: A Proven Guide to Growing a 7-Figure Financial Advisory Practice Part 1 with Adam Koós, CMT

Do you feel “stuck?” Are you a growth-minded, goal-oriented financial advisor, but struggling to take your firm to the next level? What about your mindset – are you stressed out, or have you reached a point where you’re not as excited about your practice as you once were? Have you ever thought to yourself, “I’m like a V-10 engine, ready to race toward greatness… if I could just find the right fuel to get me there?!” In this 1-hour presentation, Adam Koós crams a plethora of tested and proven methods to grow your financial advisory firm in ways that surpass all your expectations.

You’ll learn tips on how to attract new clients, perfect your client on-boarding process, increase your conversion ratios, get more referrals from clients and COIs, prospect for new business using A.I. instead of your own time, turn your firm into the “go-to brand” in your community, all while creating more value and impact in your clients’ lives than you ever have before.

Contributor(s)

Adam Koos, CMT, CFP®, CEPA

Adam Koós, CMT, CFP®, CEPA, is the president, portfolio manager, and Senior Financial Adviser at Libertas Wealth Management Group, Inc., located in Columbus, Ohio. His professional journey began just 10 days before the tragic attack on the World Trade Center in 2001....

Unleashing Potential: The CMT Investment Challenge

As many of you navigate through the challenging waters of the CMT exams this June, remember that the journey to mastering technical analysis doesn’t pause while awaiting your results. This period is a golden opportunity to not only refine your skills but to actively engage with them in real-world scenarios. That’s where the CMT Investment Challenge comes in, bridging the gap between theory and practice.

The CMT Investment Challenge is uniquely designed to provide candidates like you a practical arena to apply the technical analysis skills you’re currently being tested on. It’s more than just a competition; it’s a hands-on experience that occurs twice annually, offering a structured environment where you can experiment with your strategies and see them play out over an 8-week cycle.

While the wait for the exam results can feel like a standstill, participating in the Investment Challenge propels you forward. It’s an excellent way to start practicing the very skills that the CMT exams evaluate, ensuring that your learning curve continues to ascend even as you await your scores.

Moreover, the Challenge isn’t just about individual growth. It’s also a vibrant community experience facilitated by our active Discord server, where you can connect with fellow candidates and seasoned CMT charter holders. This network serves as an invaluable resource, offering mentorship, discussion, and a shared learning experience that can illuminate various perspectives and insights on market dynamics.

Engaging with the CMT Investment Challenge means you don’t just sit back after your exams. Instead, you leap into an immersive experience that sharpens your skills, expands your network, and enhances your understanding of technical analysis. As your exam results brew in the background, take this chance to actively shape your proficiency and connect with a global community of like-minded professionals.

The path to becoming a Chartered Market Technician is both rigorous and rewarding. Through platforms like the Investment Challenge, the CMT Association is committed to supporting your growth at every step, ensuring that when your results arrive, you are already ahead in the game. Dive into this challenge and turn the waiting period into a time of active learning and professional development.

Contributor(s)

Joel Pannikot

Joel Pannikot (pronounced as Punny-Quote) is the Managing Director of Chartered Market Technician Private Limited and serves as the Head of the Asia-Pacific region for the CMT Association. In this role, he is committed to advancing the field of technical analysis through...

Visualizing Relative Strength

I would argue that the concept of relative strength is one of the most important in technical analysis. Of course, we need to clarify. I am talking about studying the ratio of one asset to another in order to find outperformance. We are not talking about RSI (Relative Strength Index), which while powerful, is not the same thing. Not only can we compare one security to another, but we can look for leadership within any universe. For example, relative strength analysis can help an investor find securities that are driving returns in a portfolio as well as find those that are hurting performance and should perhaps be removed. Alternatively, an investor could use relative strength analysis to understand which commodities deserve his attention. Are metals performing well, or should we invest in oil? In this article, we’ll discuss relative strength and apply it to a study of the equity sectors.

Courtesy StockCharts.com

The chart above is a simple line chart of the ratio of XLU (utilities) to SPY (S&P 500). Relative strength itself is a simple concept. When looking at a chart of a ratio, we can say that the numerator is the outperforming security if the line is rising. Therefore, we know that over the past few months, a position in XLU would have added alpha to a portfolio over simply holding the broader index.

How do we include this analysis as chartists in our daily workflow to get an idea of which sectors are primed to out-perform? We can of course cycle through 10 different charts and make note of the slope of each line. If we wanted to accelerate the process we could add all of the relative strength lines for the sectors to one chart.

Courtesy TrendSpider

The chart above does just that. Although I have worked with many clients that endeavor to work in charts like this, I don’t think it would be hard to convince anyone that an awful lot of skill (or luck) is required in order to quickly identify the out-performing sectors in the S&P 500 from this image. What else can we do to streamline our efforts?

Courtesy of StockCharts.com

We can take advantage of platform functionality to create a multi chart layout that will allow us to separate all of the sector ratios into mini charts (see above chart). This may help, but still, it can be difficult to quickly see which sectors are relatively out-performing the larger index. On close inspection, it looks like the 4th (XLK) and 8th (XLU) are in rising trends.

How can we address these issues with GoNoGo Charts? First, let’s go back to the relative strength chart of XLU/SPY and instead of eyeballing the trend, we’ll apply the GoNoGo trend methodology.

Courtesy TrendSpider

Now we can see clearly the trend of the relative strength line. In mid-March, after a first higher low, GoNoGo Trend flagged a new “Go”, and the last few months have shown a series of higher highs and higher lows. Seeing this relative “Go” trend in the utilities index could have led to an investor seeking opportunities in this space.

How could we apply this methodology across all sectors? Can we do it in a way that avoids the pitfalls of trying to put all lines in one panel or creating 10 small and arguably unreadable charts? We use the GoNoGo Sector RelMap.

Courtesy StockCharts.com

This chart applies the GoNoGo Trend methodology to all of the sector relative strength ratios but simply colors individual panels without worrying about traditional price movements. This allows us to watch the rotation between sectors as it happens, and in a way that allows us to focus our attention on the out-performing sectors. We can quickly see that at the moment, there are 2 sectors that are in relative “Go” trends to the larger index; technology (XLK, top panel) and Utilities (XLU, 2nd from bottom). We don’t have to subjectively eyeball it, GoNoGo Trend tells us using a weight of the evidence approach. Given our discussion so far, it is no surprise that the utilities sector is in a relative “Go” trend, but hopefully it is clear that using different visualizations, such as the GoNoGo Sector RelMap, these conclusions become more easily reachable.

These GoNoGo RelMaps can be created for any universe. We have used RelMaps for commodities, currencies, countries, cryptocurrencies and many others. It is good practice to include relative analysis in a technical approach.

Contributor(s)

Alex Cole

Alex Cole is a Technical Analysis and Charting product specialist. With almost 20 years of financial market experience, Alex has led Technical Analysis and data visualization teams, frequently contributed to financial news/ industry organizations such as Bloomberg and the Chartered Market Technicians...

Fill the Gap with Brian Decker, CMT

Join us on Fill the Gap for a deep dive into the world of global fixed income portfolio management with Brian Decker, CMT, a distinguished market strategist from Wellington Management in Boston. A seasoned market expert with a background in rates trading, thematic investing, and market analysis, Brian brings a wealth of experience in navigating the complexities of cross-asset dynamics with a specific emphasis on global bond portfolios.

In this episode, he unveils his analytical process, which integrates advanced and highly differentiated methodologies such as Market Profile, DeMark studies, and the Elliott Wave Principle across multiple timeframes. These frameworks not only enhance his understanding of whether markets are trending or correcting but also inform his alternative view on where markets may diverge from his thesis. The mosaic of tools enable him to uncover opportunities with a breadth of concurrent evidence and quantify shorter-term volatility against longer objective risk/reward objectives.

From macroeconomic insights to tactical money management decisions around timing and position sizing, Brian’s approach offers listeners a unique perspective on optimizing portfolio performance across diverse regions of the globe. Whether you’re a seasoned investor seeking to refine your strategy or someone new to fixed income markets, Brian’s expertise promises to provide invaluable insights that can elevate your investment decisions. Tune in to Fill the Gap Episode #41 and gain a deeper understanding of strategic global bond portfolio management with one of the industry’s leading practitioners.

Fill the Gap, hosted by David Lundgren, CMT, CFA and Tyler Wood, CMT brings veteran market analysts and money managers onto a monthly podcast.

For complete show notes of every episode, visit: https://cmtassociation.org/development/podcasts/

CMT Association is the global credentialing authority committed to advancing the discipline of technical analysis in the financial services industry. We serve members in over 137 countries. Our mission is to elevate investors mastery and skill in mitigating market risk and maximizing return in capital markets through a rigorous credentialing process, professional ethics, and continuous education. CMT Association formed in the late 1960s with headquarters in lower Manhattan, NY and Mumbai, India.

Contributor(s)

Brian Decker

Brian Decker, CMT, serves as Market Strategist specializing in Global Bonds and FX at Wellington Management Co. He provides actionable investment strategies across a diverse portfolio including sovereign debt of major economies like the US, Germany, UK, Japan, Canada, Australia, and European...

David Lundgren, CMT, CFA

David Lundgren has more than three decades of investment industry experience, with a focus on technical analysis strategies, particularly momentum and trend following. He is the former Director of Technical Research at Wellington Management, where he was also a Managing Director and portfolio...