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Technically Speaking, December 2009

Letter from the Editor

This month, we searched the internet to find interesting and useful web sites that could help our members profit in the markets. There are a number of very good web sites out there, but most will not help traders unless they are willing to think outside the box. Economists seem to have taken to blogging more than many other professions, and while their observations are interesting, we thought that almost all of them were too far from technical analysis to be included in this short review. But you may certainly have more insights into their work and we’d like to hear about it if you do. That leads to an interesting question – what should technical analysis include? We’d very much like to hear some of your thoughts on that subject and would be glad to include any ideas you have as letters to the editor. One interesting application of technical analysis we did find was the work of Jim Otar, CMT, CFP. Jim extends his research to retirement planning. It demonstrates

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What's Inside...

A Simple Guide to Better Returns with Tactical Asset Allocation

by Jim Otar, CMT, CFP

This article was originally published by Horsemouth.com and an extract is reproduced below. To view the entire article, please go to http://www.retirementoptimizer.com/ A good tactical asset...

Useful Web Sites: FinViz.com – Financial Visualizations

FinViz offers lists of stocks that are completing a variety of candlestick and classical chart patterns I’m not sure why this is a free web site, but it presents more information than many...

MTA Educational Foundation Library Opening a Huge Success

by Bruce Kamich, CMT

Nearly 100 people turned out on Tuesday, November 17th for the formal opening ceremonies of the MTA/MTAEF Library at Baruch College. MTA members and guests came from as far away as California, Texas,...

Useful Web Sites: Bespoke Investment Group

On their web site, Paul Hickey and Justin Walters claim to “…offer some of the most original content and intuitive thinking on the Street.” They deliver this with daily research reports that...

Blogs of Note: Quantifiable Edges

We printed a sample of Rob Hannah’s research in a recent issue of Technically Speaking. For those who found that interesting, you can go to his blog and see his current, and frequently updated,...

Unveiling the Retirement Myth – Advanced Retirement Planning based on Market History by Jim Otar, CMT, CFP

by Jim Otar, CMT, CFP & Michael Carr, CMT

The author brings an engineering perspective to technical analysis and applies this to the area of retirement planning. Otar’s approach is unique and a valuable addition to the field of technical...

Useful Web Sites: Minyanville

While it is really a web site about the life and money, technicians will probably want to start exploring this site in the “Business & Markets” section. Here, highly qualified market...

On Campus: Surprise! Surprise! MBA Candidates Anxious to Learn Technical Analysis

by Charles D. Kirkpatrick

Many of us who work with the MTA Educational Foundation volunteer to teach technical analysis at the university level. It has largely been a labor of love as we have struggled for more than twenty...

MTA Announcements

MTA Podcast Series – New Podcast Available and Upcoming Schedule! Now Available… In this week’s episode of the MTA Podcast Series, Robert Prechter, CMT takes a moment to discuss...

A Simple Guide to Better Returns with Tactical Asset Allocation

A Simple Guide to Better Returns with Tactical Asset Allocation

This article was originally published by Horsemouth.com and an extract is reproduced below. To view the entire article, please go to http://www.retirementoptimizer.com/

A good tactical asset allocation approach has few moving parts, is based on historical data, and will benefit clients by either extending their retirement portfolio or improving its value. In this particular model, all you have to do is decide—based on last year’s market performance—whether to switch to a more aggressive or defensive stance. Here’s how it works.

Tactical asset allocation (TAA) is based on the premise that the growth rate of equities eventually reverts to its historic mean. It assumes that markets move at random, drawn to the average historical growth rate like a magnet. If equities grew by higher than the average historical growth rate, chances are they will revert to the mean and do poorly the following year. Therefore, we may be better off taking some money

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)

Jim Otar, CMT, CFP

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Useful Web Sites: FinViz.com – Financial Visualizations

Useful Web Sites: FinViz.com – Financial Visualizations

FinViz offers lists of stocks that are completing a variety of candlestick and classical chart patterns

I’m not sure why this is a free web site, but it presents more information than many subscription sites. A subscription service has recently been added. FinViz.com provides information; analysis is left to the user making it a powerful site for MTA members.

The home page provides a market overview and a hint of the material that will be found on other pages. At the very bottom is a “guided tour” icon that you can click on to quickly learn what is on the site. If you don’t want to take advantage of this, then you can look forward to several hours of clicking through features.

The “News” tab is a headline aggregator. It offers links to a variety

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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MTA Educational Foundation Library Opening a Huge Success

MTA Educational Foundation Library Opening a Huge Success

Nearly 100 people turned out on Tuesday, November 17th for the formal opening ceremonies of the MTA/MTAEF Library at Baruch College. MTA members and guests came from as far away as California, Texas, and Canada to mark the special occasion. The Board of the Foundation was gratified with the size of the crowd, which filled the auditorium, and the attendees were extremely complimentary towards our program.

Most of the collection of the MTA Library was lost on 9-11. In the aftermath of the attacks, the MTA rebuilt the Library thanks to the generous contributions from major book publishers, purchases of new works, and charitable donations from members made through the MTA Educational Foundation.

The fact that the library is at Baruch College is especially noteworthy considering that Baruch College helped the MTA get back on its feet by giving us a free meeting place in Manhattan after 9-11.

Over the past four years,

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)

Bruce Kamich, CMT

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Useful Web Sites: Bespoke Investment Group

Useful Web Sites: Bespoke Investment Group

On their web site, Paul Hickey and Justin Walters claim to “…offer some of the most original content and intuitive thinking on the Street.” They deliver this with daily research reports that take seconds to read and can prompt hours of thought and backtesting. You also might get a few profitable trades from their work.

To answer the most obvious question, bespoke is a word used in Great Britain to describe custom tailored clothing. They say that, “Bespoke clothing is “created without use of a pre-existing pattern, differentiating it from made to measure, which alters a standard-sized pattern to fit the customer.” Their research fits that definition – it is created without any preconceived notions and rarely fits the pattern you see in the research from so many other sources.

Their research goes well beyond traditional technical analysis. Fundamental and macroeconomic data is often presented in graphs, highlighting the trend. Technical analysis

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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Blogs of Note: Quantifiable Edges

Blogs of Note: Quantifiable Edges

We printed a sample of Rob Hannah’s research in a recent issue of Technically Speaking. For those who found that interesting, you can go to his blog and see his current, and frequently updated, market insights.

Rob’s thoughts are often posted in real time, just after a trading setup occurs. This gives you the ability to test his idea and possibly use it in your own trading. As an example, on November 16 he noted that the Tick was showing an unusual degree of strength. His post, “What A Strong Early Tick Has Meant In The Past,” began with a short note:

The market is off to a strong start today. The NYSE Tick did not post a negative reading for the 1st half hour of trading. This is fairly unusual, having happened only 64 times since the beginning of 2005. Below are stats showing how the SPY has performed the rest

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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Unveiling the Retirement Myth – Advanced Retirement Planning based on Market History by Jim Otar, CMT, CFP

Unveiling the Retirement Myth – Advanced Retirement Planning based on Market History by Jim Otar, CMT, CFP

The author brings an engineering perspective to technical analysis and applies this to the area of retirement planning. Otar’s approach is unique and a valuable addition to the field of technical analysis.

The problem he addresses in his latest book is the appropriate withdrawal rate for a retirement account. In his own words:

Take for example, a retiree who has one million dollars in his investment portfolio at the beginning of his retirement. He takes out $60,000 annually, indexed to inflation. Assume his portfolio grows 8% and inflation is 3.5% per year.

In the chart below, the red line shows the outcome from a standard retirement calculator. It shows the portfolio value (the vertical scale) over time (the horizontal scale). At first glance, it appears wonderful; the portfolio seems to last longer than 30 years.

p4

Now, calculate the portfolio value if this person were to start his retirement in any of the one-hundred years

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)

Jim Otar, CMT, CFP

Michael Carr, CMT

Michael Carr, CMT

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Useful Web Sites: Minyanville

Useful Web Sites: Minyanville

While it is really a web site about the life and money, technicians will probably want to start exploring this site in the “Business & Markets” section. Here, highly qualified market technicians share space with fundamental analysts and offer insights into the markets along with trading ideas. News that impacts stocks and the economy is featured in an easy to read format.

The writing style is fast paced, and never boring. A recent article on the securitization of future royalty streams by musician David Bowie offered valuable historical insights on the derivatives market without using the amount of jargon that makes this subject incomprehensible to so many. As technical analysis flourishes in the finance industry, it will become more and more important for technicians to speak in the type of language seen in the articles on this site. Demystifying math and finance are arguably among the most important job skills for

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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On Campus: Surprise! Surprise! MBA Candidates Anxious to Learn Technical Analysis

On Campus: Surprise! Surprise! MBA Candidates Anxious to Learn Technical Analysis

Many of us who work with the MTA Educational Foundation volunteer to teach technical analysis at the university level. It has largely been a labor of love as we have struggled for more than twenty years to introduce technical analysis into business school curriculums. So, it was with great joy then that on my first day of teaching the first graduate credit course on technical analysis at Brandeis University’s International School of Business that I found my 40-seat classroom filled with 55 students desiring to take the course.

I know they were not there because they were interested in meeting me, nor were they expecting a “gut” course. Almost in unison, they expressed the desire to learn about technical analysis and about how they could use it in the investment business. There are only about 300 students in the various Masters programs at the business school. This means that a substantial

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)

Charles D. Kirkpatrick

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MTA Announcements

MTA Announcements

MTA Podcast Series – New Podcast Available and Upcoming Schedule!

Now Available… In this week’s episode of the MTA Podcast Series, Robert Prechter, CMT takes a moment to discuss Dubai World, Socionmics & Sentiment, his first job at Merrill, and his discovery of Elliott Wave.

Coming Soon…

    • December 8 – Tom McClellan
    • December 15 – Connie Brown, CMT

Visit the MTA Podcast Series page to listen to this podcast and subscribe to our RSS feed, where you’ll receive updates automatically every week.

MTA Board of Directors Nominations

For the fiscal year commencing July 1, 2010, four (4) Officer positions are up for consideration for a 2-year term, and two (2) At-large Board positions are up for consideration for a 3-year term.  Over the next two months, we are encouraging any Member, Honorary Member or Emeritus Member in good standing to submit your name for consideration to nominations@mta.org.

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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