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Technically Speaking, December 2010

Letter from the Editor

Technical analysis is a varied discipline, including such diverse forms of analysis as chart patterns, Elliott Wave, and relative strength. If this month’s newsletter has a theme, it could be described as “whatever works.” Larry Williams is a world renowned trader and first class researcher. He recently made a presentation to the Los Angeles chapter of the MTA. Those who have been fortunate enough to take in one of his many presentations always get a variety of ideas. Larry seems to look at any idea, adopting those that can lead to profits. He doesn’t appear to be interested in being right or being pigeon holed as an expert on any one topic. Everything he presents is simply designed to make money in the markets. We also have a summary of an archived video presentation that demonstrates ways to combine technical and fundamental data into a single trading opinion. Dennis Gartman explained his strategies more than a year ago. One advantage of using the archives for education and strategies is that you

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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...

Career Development: PlacingTraders.com

by Michael Carr, CMT

EDITORS NOTE: In previous issues of the Technically Speaking e-Newsletter, we’ve reviewed various technical analysis books, products, and software. This article is a review of a free online...

Chart of the Month: Stocks for the really long-term

by Mark Cremonie, CMT, CFA & Ronald L. Griess

While it’s easy to get caught up in the day-to-day movements of the stock market, a long-term view can help provide perspective. The declines of the 2008-2009 bear market were significant, but they...

Ten Things Everyone Should Know About the VIX

Editor’s note: We wanted to take an opportunity to present some information on trading vehicles that allow traders to enter positions designed to capitalize on volatility. This article was...

Los Angeles MTA Chapter Meeting November 15, 2010

by Kristin Hetzer, CMT, CIMA, CFP

Our last chapter meeting of the year was held at the Long Beach Grand Event Center Monday evening. It was a grand event, too. Larry Williams, a widely recognized futures trader for 48 years, was our...

Fundamentals and Technicals: Stealing from Both Schools

by Dennis Gartman

Dennis Gartman made a presentation as part of the MTA Educational Web Series on August 3, 2009. The archive of this presentation is available in the On Demand Video Archives. This presentation was...

Fundamentals are Technicals

by Michael Carr, CMT

Sometimes without even realizing it, fundamental analysts seem to use technical analysis. A recent example is in the current issue of CFA Magazine, a publication of the CFA Institute. “Why...

Blogs of Note

by G. Edward Gruber, CMT

Many MTA members regularly make their work available to the general public. EM Trend Advisors, maintained by G. Edward Gruber, CMT, is one of those sites. Ed offers clear analysis designed to help...

Announcements

MTA Board of Directors Nominations For the fiscal year commencing July 1, 2011, three (3) At-Large Board positions are up for consideration for a 3-year term. Over the next two months, we are...

Career Development: PlacingTraders.com

Career Development: PlacingTraders.com

EDITORS NOTE: In previous issues of the Technically Speaking e-Newsletter, we’ve reviewed various technical analysis books, products, and software. This article is a review of a free online service available to the investment community. In addition, PlacingTraders.com is collaborating with the Market Technicians Association to help provide materials and information for the Career Development Center for the use of you, our membership.

In a recent blog post, Vicki Meddows-Smith, wrote, “The old adage of ’It’s not what you know but who’ has been given new life, but the challenge that remains for the business world is how best to embrace the power of the on-line community.” On her web site, www.placingtraders.com, she offers traders and job seekers a possible way to address that challenge and a chance to benefit from technology.

Placing Traders is an online community. The primary purpose is hard to define as the site is one of the few

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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Chart of the Month: Stocks for the really long-term

Chart of the Month: Stocks for the really long-term

While it’s easy to get caught up in the day-to-day movements of the stock market, a long-term view can help provide perspective. The declines of the 2008-2009 bear market were significant, but they were not unprecedented. Ron Griess of The Chart Store prepared a series of charts depicting previous bear markets. Additional charts showing details of each secular decline can be found at http://www.thechartstore.com/html/10-10%20S&P%20Secular%20Cycles.pdf. There, readers will find inflation-adjusted monthly charts of the bear markets, and time projections for how long this secular bear market could last, based on history.

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)

Mark Cremonie, CMT, CFA

Ronald L. Griess

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Ten Things Everyone Should Know About the VIX

Ten Things Everyone Should Know About the VIX

Editor’s note: We wanted to take an opportunity to present some information on trading vehicles that allow traders to enter positions designed to capitalize on volatility. This article was originally posted at http://vixandmore.blogspot.com/2008/04/ten-things-everyone-should-know-about.html and is reprinted here with permission of the author. 

I have had quite a few requests to present some introductory material on the VIX, so with that in mind I offer up the following in question and answer format:

Q: What is the VIX?
A: In brief, the VIX is the ticker symbol for the volatility index that the Chicago Board Options Exchange (CBOE) created to calculate the implied volatility of options on the S&P 500 index (SPX) for the next 30 calendar days. The formal name of the VIX is the CBOE Volatility Index.

Q: How is the VIX calculated?
A: The CBOE utilizes a wide variety of strike prices for SPX puts and calls to calculate the VIX.

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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Los Angeles MTA Chapter Meeting November 15, 2010

Los Angeles MTA Chapter Meeting November 15, 2010

Our last chapter meeting of the year was held at the Long Beach Grand Event Center Monday evening. It was a grand event, too. Larry Williams, a widely recognized futures trader for 48 years, was our guest speaker. It was very exciting to hear him speak about the markets and to learn of some of his personal experiences. The audience was very interested in his trading strategies and reasons for the consistent success after so many years. I think some were surprised by the background and wide-ranging interests of Mr. Williams.

Larry’s website, www.ireallytrade.com, offers a large amount of free content to those interested in his comments on the market. The commentary is timely and the research is unique and useful. The week before his presentation, he commented on the 413-day cycle for metals which posted a high where cycle observes expected it to.

He started the evening by showing actual trading

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)

Kristin Hetzer, CMT, CIMA, CFP

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Fundamentals and Technicals: Stealing from Both Schools

Fundamentals and Technicals: Stealing from Both Schools

Dennis Gartman made a presentation as part of the MTA Educational Web Series on August 3, 2009. The archive of this presentation is available in the On Demand Video Archives.

This presentation was made at a time when markets were very volatile. It includes Gartman’s analysis of the markets at that time.

He began with a chart of gold. The chart is clearly indicative of a bull market. Intermarket relationships indicate that rising gold prices will lead to a lower dollar. Politically, a center-left government such as was in place at that time, will devalue the currency. These factors contribute to the trend, which was clearly up at that time. He is not a perma-bull in this, or any other market.

At the time, the price of gold was just below $1,000 an ounce. This price point presented resistance at the time. This reminded Gartman of a great battle, and trading in his

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

Contributor(s)

Dennis Gartman

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Fundamentals are Technicals

Fundamentals are Technicals

Sometimes without even realizing it, fundamental analysts seem to use technical analysis. A recent example is in the current issue of CFA Magazine, a publication of the CFA Institute. “Why Valuation Must Continue to Evolve” by Yves Courtois, CFA, points out that valuation changes over time. The article can be found at http://www.cfapubs.org/doi/pdf/10.2469/cfm.v21.n6.2.

He discusses accounting issues related to mark-to-market mandates and some of the problems associated with the accounting standards. He identifies the problem concisely and insightfully as “mark-to-market valuations follow the cyclical nature of the business cycle, leading valuations from peaks to troughs and vice versa.”

To prove his point, he presents a chart of the relative strength of various sector ETFs compared to the S&P 500, shown here as Figure 1. The conclusion, “…market values of economically sensitive sectors, which typically outperform the broader market in times of economic expansion and underperform during recessions, may significantly deviate from long-term

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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Blogs of Note

Blogs of Note

Many MTA members regularly make their work available to the general public. EM Trend Advisors, maintained by G. Edward Gruber, CMT, is one of those sites. Ed offers clear analysis designed to help traders see the big picture.

November 16, 2010: The Final Few Weeks
http://emtrendadvisors.com/blog/november-16-2010-the-final-few-weeks

When the red Starbucks cups hit the shelves, people start thinking Christmas. Granted, it’s not chestnuts roasting on an open fire or jingle bells but it certainly sends a message to start gearing up for Christmas. That also means gearing up for the always-important shopping season.

The moniker of Black Friday (which traditionally belongs to the day after Thanksgiving) was recently morphed and overlaid onto the entire month. If that is the case, Black Friday may draw far less activity in stores. Another potential side effect of a “Black November” instead of Black Friday is that retailers will run deeper discounts for longer periods of

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)

G. Edward Gruber, CMT

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Announcements

Announcements

MTA Board of Directors Nominations

For the fiscal year commencing July 1, 2011, three (3) 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. The nominating committee will then seek out your completion of a tailored questionnaire as part of its review process. In addition, if you do not wish to serve but have suggestions on who might be willing/able to do so, we would encourage you to write us on that as well. Nominations may also be made by petition signed by not fewer than ten (10) percent of the Members, Honorary Members and/or Emeritus Members in good standing. Affiliates and Student Affiliates are not eligible to submit nominations. Any such petitions must be filed with the Secretary not less

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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