Technically Speaking, December 2022

Hello readers and welcome to the December edition of Technically Speaking. 

It’s the end of the year already, but what a roller coaster ride 2022 has been (and it isn’t over yet)! While at it, the market played another game with the participants, that of musical chairs. We’ve had several sectors take on the leadership role one after the other, but never consistently together, until recently. For someone who stepped into the market arena in 2020, these last three years have been like a crash course of sorts! We had the 2020 Covid correction, Crude trading in negative, strong bounce back from stocks and commodities, Bond yields rally, US Dollar rally, Crypto correction, market recovery and many more events teaching us valuable lessons we need to learn. 

It is important to note though, that all these trends didn’t play out overnight. There were signals that preceded these trends that alluded to a changing market environment. While it does seem overwhelming at first, it is really quite simple to be on the right side. You need to have a system in place. If you think you’re trading equities and therefore don’t need to track the Bond market, then you’re setting yourself up for a trap. Early in my career I had a system. And when I was new to the system, it was exciting, but eventually it became a routine. 

The thing about routines is that you really have to stick to them. It can get boring sometimes, and with the non-stop dopamine supply of social media, we tend to crave excitement at all times. But one thing we tend to forget is that habits are formed by following routines. Routine means repetitive patterns, and that means that butterflies are not going to move in to your stomach on a long-term lease. But its worth noting that if the market is getting a big reaction out of you with every move, then you’re probably missing early signs of that move. So how do we combat that? Routine! Build a system that helps you track all the asset classes on a broad level and be aware of the inter-market relationships playing out. Dig a little deeper and compare examples in history to understand market cycles better. Doing this over a sustained period of time will replace excitement with curiosity. That’s when you know you’re on the right track. It is this transition from excitement to curiosity that helps us analyze the market better. The market speaks to us every day, we just have to listen.

On that note, here’s wishing everyone a wonderful holiday season! 

I’ll see you again next year. Until then, think Technically!

Rashmi Bhatnagar, CMT


What's Inside...

President's Letter

While I normally put on my Board of Directors hat to author the President’s Letter each month, this time I’m...

Read More

Five Good Signs for The Bulls In 2023

Can you believe it? We made it to December! As we noted already, we wouldn’t be surprised if we finished...

Read More

What Did You Learn This Year?

We’re a few weeks away from closing the book on 2022. Wow, what a rollercoaster year for the financial markets....

Read More

SPY Remains Under Pressure But These Sectors Are Improving.

Disclaimer: Originally published on

Relative Strength Is Losing...

Read More

The Fed Chair Ignites a Rally

The Fed Chair Ignites a Rally

by Greg Rieben December 01, 2022

Stocks were in need of a catalyst after trading...

Read More

President's Letter

While I normally put on my Board of Directors hat to author the President’s Letter each month, this time I’m writing to you as a fellow dues-paying Member of the CMT Association.

If I were to give this note a subtitle, it would be, “Why I Think The 50th Anniversary Symposium Is Totally Worth the Price”.

In case you haven’t heard, the CMT Association turns 50 years old in 2023 – our golden anniversary – and we’re going to celebrate the milestone at the Annual Symposium in New York on April 26-28, 2023.

The 2022 Symposium was held in Washington, D.C. and was our first hybrid, in-person/online conference, coming right on the heels of the COVID Pandemic. In-person attendees were very excited to be back at a live event, meeting with old friends and colleagues, but many people still had difficulties attending due to travel restrictions and employers’ work-from-home policies. The 50th will be most people’s first chance to get back together at our flagship event in New York.

It just so happened that my very first annual conference was the MTA’s 25th Anniversary Seminar, held in Atlanta, Georgia back in the year 2000. [In case you did the math, the Association was not founded in 1975. We were actually incorporated in 1973, but the first seminar was in 1976].

That event was legendary, as the Seminar Committee, Chaired by Sam Hale, brought together an awesome group of past winners of the CMT Annual Award, including Arthur Merrill, Hiroshi Okamoto, Ralph Acampora, Bob Farrell, Don Worden, Dick Arms, Alan Shaw, and John Brooks. Other attendees who went on to become “living legends” of the CMT Association were Frank Teixeira, John Bollinger, Walter Deemer, Connie Brown, Larry McMillan, Peter Steidlmayer, and Bob Prechter. I was amazed at the access I had to these famous technicians by attending this one event.

The 50th aims to be even bigger in terms of celebrating our history and uniting the people responsible for creating and supporting the CMT Association all these years. For some attendees, like me, this is a big selling point. I own books written by many of the people who will be there. Being able to meet and talk to them is worth a lot, in my opinion.

Another big selling point for me is that the evening celebration will be on the floor of the New York Stock Exchange. Usually, tourist visiting New York look down from a gallery high above the floor behind a glass window. Actually walking on the legendary trading floor is a special experience worth doing at least once in your life, and the Symposium admission fee covers your attendance at the NYSE evening celebration event.

Registration is now open and the early-bird pricing for Members is $1,499. This discounted price only lasts until 10th January, 2023, so sign up today.

If you’ve attended CMT Symposiums in the past, you’ll notice that the price went up significantly. Why so much this year?

With inflation running high, the cost of conference space has increased worldwide. In New York, it’s up 30%+ since before the Pandemic. This is mostly due to inflation, but also supply and demand.

We structure the conference so the Association breaks even on the event (we are a not-for-profit organization after all). If you summed up all the per-person costs involved in hosting such an event, the ticket price is actually well below it. We rely on our generous corporate sponsors to help fund your attendance.

Also, our annual conference has historically been priced below similar financial industry conferences. Take the ALTSLA 2023 conference hosted by the CFA Society Los Angeles and the CAIA Association that runs $1,500 for investment managers to attend. There’s the AICPA & CIMA conference for CFOs in Salt Lake City that costs $1,525 for AICPA members to attend. Or there’s Private Equity International’s (PEI) Women in Private Markets Summit that just took place in London and was $2,500 for general delegates to get in. I’m not saying that we should always pay as much as everyone else, but it makes sense that if costs have come up, we should at least expect to pay the industry standard.

I pay the Symposium fee out of my own pocket. There’s no free ride for Board members, and since I’m self-employed I don’t have a company expense reimbursement that will cover the cost. I am therefore very price sensitive about it and, obviously, I’m not looking forward to spending money during these tough economic times.

But, considering how good this conference will be, how much time I’ve invested in the CMT Association and my CMT charter over the years, and that it will be the first time in many years I will see many of my oldest colleagues, I think it’s totally worth it.

I hope you agree and that I’ll see you in New York. Here’s to a great 50th Anniversary Symposium!


Brett Villaume, CMT, CAIA

Brett Villaume, CMT, CAIA, is Past President of the CMT Association, having served on the Board of Directors since from 2014 to 2023. Additionally, Brett is a Wealth Advisor at Dogpatch Capital, a registered investment advisor in San Francisco, CA. From 2015...

Five Good Signs for The Bulls In 2023

Can you believe it? We made it to December! As we noted already, we wouldn’t be surprised if we finished this year with some more green, but today we’ll look into the future and what could be in store in 2023.

First things first, let’s start with something simple. Stocks will likely be lower this year; we can all agree there. How likely is the S&P 500 to be down two years in a row? The bottom line, it is pretty rare for back-to-back yearly losses, and we don’t expect it to happen this time either. In fact, over the past 50 years, it has only happened twice. There was a three-year losing streak after the tech bubble burst in 2000, 2001, and 2002, then back-to-back losses during the vicious recession of 1973 and 1974. So it ‘could’ happen, but we don’t see many similarities between now and those two times, suggesting next year should be a bounce-back year for stocks.

Another potential positive is that when the S&P 500 is lower during a midterm year (like we will likely see in 2022), the following year has been extremely strong. Since 1950, the year after a negative midterm year saw the S&P 500 higher all eight times, with a very impressive yearly return of 24.6%. Looking at the past 50 years, things are even better, as the ‘worst’ next year was 26.3%.

Thirdly, and somewhat similar to above, pre-election years historically are very strong for stocks, with the S&P 500 up 16.8% on average and higher 88.9% of the time. Midterm years are the worst, which clearly played out this year. All in all, that’s something for bulls to be excited about in 2023.

Fourth, we hear a lot about how a recession is coming in 2023, but we aren’t so sure. Sonu did a great job discussing some of this here and here.

The bottom line to us is that the consumer makes up 70% of the economy, and is still in good shape and spending. But could a recession start next year? Well, history would say it would be rare. That’s right, we found that out of the past 13 recessions, none started in a pre-election year. Full disclosure, we did see recessions begin in January in 1970 and 2008, so those were just a month away. But all in all, this is another potential positive for the bulls in 2023.

Lastly, stocks soared yesterday as investors realize that the Fed will likely end their series of aggressive rate hikes potentially quite soon. As a result of yesterday’s big move, the S&P 500 closed above its 200-day moving average for the first time in more than seven months. We took a look, and this could be potentially quite bullish.

As you can see here, previous times that saw streaks end at least six months beneath the 200-day moving average resulted in solid performance going forward. In fact, since 1950, only one out of 13 times stocks went on to make new lows, which was in 2002.

Here are the longest streaks beneath the 200-day moving average and what happened once the streak ended. Up 18.8% a year later and higher more than 92% of the time is one thing that could have bulls smiling in 2023.

For more of our latest thoughts on the market and economy, be sure to listen to episode 12 of the Facts vs. Feelings podcast with Sonu and me here. Happy holiday season, everyone!



Ryan Detrick, CMT

Ryan Detrick, Senior Vice President, Chief Market Strategist, is a member of the LPL Financial Research tactical asset allocation committee, responsible for directly impacting the portfolio decision-making process, as well as a member of the market insights team, developing and articulating equity...

What Did You Learn This Year?

We’re a few weeks away from closing the book on 2022. Wow, what a rollercoaster year for the financial markets. New participants received a valuable education on how inflationary forces can alter asset relationships. Growth equity investors severely underperformed, as higher rates proved to be too much for high growth, non-profitable companies. Market sentiment reached historical lows, as pessimism tied to the future prospects of the global economy plagued investors. Russia-Ukraine, PMIs crashing, yield curve inversion, FTX collapse…the list goes on. There’s been no shortage of reasons to grow skeptical of the markets – but all is not lost. Cycles need time to play out. In this environment, like every other, quality security selection and proper risk management is priority one.

It was suggested to me, that I take time in December to reflect on the year. What thesis did you abandon in 2022? What did you stick with? What’s changed since January? I’ve asked myself a lot of questions but none more important than, “What did you learn this year?”

The short answer is, quite a lot. But I’ll keep it to 3 things for the sake of your Sunday afternoon. Let’s get started.

1) Regime Changes Can Happen Fast!

Regime shifts can play out gradually at first, then all at once! Just take a look at the below chart of Russell 1000 Index: Growth vs. Value. The ratio formed a new weekly closing high in November 2021, but the subsequent 12-months saw consistent outperformance from Value. In the first week of January, the ratio made a sharp move lower beneath the 30 & 40-week moving average. It’s remained in a persistent downtrend in favor of Value ever since.

2) Don’t Fall in Love with an Asset Class

A tale of two halves. 1H 2022 saw significant outperformance of commodities over stocks. 2H saw the exact opposite. The 6M performance spread of SPX:SPGSCI as of today = +21.74% in favor of stocks. A great reminder to not fall in love with an asset class. Commodities formed new lows this week and if history is any indicator, they are typically the last to form a cycle bottom. Commodities did prove to be a strong diversifier this year. They played their role and earned a roster spot. The S&P Goldman Sachs Commodity Index is +17.8% on a YTD basis.


3) Beware or Be Aware of Home Country Bias

The below chart outlines the year-to-date performance spread of US equities vs. Non-US Equities (adjusted for dividends). Despite the monster run up in the US Dollar in 2022, Non-US equities (denominated in USD) are outperforming US equities on a year-to-date basis. I can’t understate this enough. Diversifying outside the US is as important to your portfolio as rebalancing or index/manager selection. Determining the optimal target weight of Non-US stocks is a different conversation, but it doesn’t take away from the fact that their presence in the portfolio is very important. Just take a look at the composition of various country indices. The US looks vastly different from Europe, Europe is different than Japan, so on and so forth. The source of return also varies. The indicated dividend yield on the S&P 500 is roughly 1.50%, on the MSCI ACWI Ex-US Index, the indicated dividend yield is nearly 3.75%. Two very different markets!


In the words of Leonardo da Vinci (who I hear was a fan of the Fibonacci sequence), “Learning never exhausts the mind.” If you find yourself operating within the financial markets, you will continue to learn, year after year in perpetuity. There is no book or knowledge source that can relinquish our need for continued learning. Markets evolve, relationships change, and if we as participants choose to ignore this, we will surely be dissatisfied with our results.


That’s enough out of me. I hope everyone enjoys the holiday season – best of luck as we head into 2023!


This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. All indices are unmanaged and investors cannot actually invest directly into an index. Unlike investments, indices do not incur management fees, charges, or expenses. Past performance does not guarantee future results. Please contact your financial professional for more information specific to your situation.


Shane C. Murphy, CMT

Shane Murphy is an Associate at Michael Roberts Associates Inc. an independent wealth management firm located in Syracuse, NY. Prior to that, Shane worked in portfolio construction and research for an independent RIA. He also has experience in municipal finance, working at...

SPY Remains Under Pressure But These Sectors Are Improving.

Disclaimer: Originally published on

Relative Strength Is Losing Its Concentration

Recent sector rotation shows a relative strength loss for two of the three defensive sectors. This is a move away from the trend we have seen for many months, where the defensive sectors were leading the market, sometimes even when the S&P 500 was moving up. So the first takeaway from this observation is that the dominance of defensive sectors seems to be fading away, at least for now.

The most eye-catching deviation is the almost straight line on the tail for XLU pushing the sector deeper into the lagging quadrant.

On the opposite side, the cyclical sectors also show a diverse image. Materials and Financials are at strong rotations and inside the leading quadrant, while Real Estate and, more importantly, Consumer Discretionary are inside the lagging quadrant.

And also, in the group of sensitive sectors, we find 2-2 opposing rotations. Energy and Industrials are inside, leading and pushing further into it as they advance on both scales. Communication Services remains weak and continues to lose on both scales. Technology has curled upward and is picking up some relative momentum but no relative strength yet.

All in all, it looks as if the dominance of the defensive group is fading, but on the other hand, none of the other groups is picking up that role. This means that relative strength in the market is currently scattered across all sectors, making it hard to use any concentration of leadership as a guide for the direction of the S&P 500.

S&P 500 Remains Under Pressure

With that in mind, I still see an overhead supply for SPY.

First, the major falling resistance has been running over the highs since the start of the year. Secondly, the resistance zone between 410-415 came into play a few times as support and resistance. And then there seems to be a small double-top building around 403 where the two most recent peaks were formed.

All of that is happening while the bigger trend is still down, with a clear series of lower highs and lower lows visible on the weekly chart.

Some Individual Sectors Are Improving

Now, with that bigger framework in place, we can check out a few sectors that are in the process of setting up for a positive turnaround. The sectors that I am particularly watching are Materials (XLB), Financials (XLF), Industrials (XLI), and Consumer Staples (XLP).

Above are these four sectors plotted on a weekly Relative Rotation Graph. Except for XLF, they are all at a strong RRG-Heading between 0-90 degrees. XLF is moving due East and continues to gain in terms of relative strength at a steady pace (relative momentum).

Switching to the daily version of this chart shows a strong rotation for XLP moving back into the leading quadrant after a corrective rotation through weakening and briefly lagging.

XLB, XLI, and XLF are all inside the weakening quadrant well above the 100-level on the RS-Ratio scale. XLF and XLI have already started turning back up, while XLB seems to need a bit more corrective relative rotation.


XLB is pushing against that slightly up-sloping resistance for a few weeks already but has not been able to create a decisive breakthrough. In terms of relative strength, this sector already broke horizontal resistance a few weeks ago, while the next (relative) resistance is still a bit higher. This creates room for a corrective relative move in XLB when the price fails to break higher. This is likely the sector facing the most resistance of these four.


Industrials have already broken the down-sloping resistance and is now pushing against resistance in the area around the previous peak at 100.50. Yesterday’s high was at 101.30, but no real follow-through yet.

Relative strength continues to pick up momentum, resulting in one of the stronger rotations on the RRG. I am looking for a decisive break above 101.50 on this week’s close. That will very likely attract more buying interest to push the sector further up toward the 105 area, where it will face the real test.

Consumer Staples

XLP found support near 66 and rallied strongly towards the 76 area, which is now running into resistance coming off the previous peak (mid-August). Relative Strength has also followed the price rally up to its resistance level.

We need a break above 76 by the end of the week to trigger new upside potential toward the peak that was set near 80 earlier this year. A decent tradable opportunity, when triggered with good downside protection once old resistance can start to act as support and a real good entry for an expected rally if and when XLP can take out its all-time high.


The setup for XLF is quite similar to the other three sectors I discussed above. However;

The upside potential from the breakout to the previous high seems to be the biggest which makes it, IMHO, the most interesting opportunity to watch once it triggers.

Last week’s high was at 36.16, while the peaks of May and August came in at 35.74 and 35.97. I’d say a close at or above 36.50 this week will be the trigger for a further rally toward the levels we saw at the start of the year, ie, ~41. That equals a solid 10% upside potential while the downside is well protected around 36.

#StaySafe, —Julius


Julius de Kempenaer

Julius de Kempenaer is Founder & Director of RRG Research & Sr. Technical Analyst at Julius de Kempenaer is the creator of Relative Rotation Graphs®, which have been available on Bloomberg since January 2011 under the mnemonic RRG<GO>.  He is the...

The Fed Chair Ignites a Rally

The Fed Chair Ignites a Rally

by Greg Rieben December 01, 2022

Stocks were in need of a catalyst after trading mostly unchanged for two weeks and Fed Chair Jerome Powell delivered.

Every sector closed green…

Most of what Jerome Powell said at the November 2022 Fed meeting was not new and the market had already anticipated and discounted it over the last few weeks.

What really got the market going is what he said about the Fed’s December meeting. The Fed could “reduce the pace of rate increases as early as the December meeting…”

Bulls have been looking for a “pivot” and bears have been looking for Powell to crush the economy by continuing to increase rates aggressively. As it turns out, somewhere in the middle was good enough to get short sellers to cover and the underinvested to start buying.

We have been watching the put/call ratio closely over the last week which turned out to be a great contrarian indicator to keep a bullish bias. 

We haven’t seen a put/call ratio print this high since the spring of 2020.

As far as the NASDAQ and S&P 500 are concerned, there are still considerable technical headwinds above that could create some problems moving forward, like the 200 day moving average and trendline resistance.

I’ve been expecting a broad market rally that would take price back to the levels shown above, but the reality is, many stocks bottomed months ago.

The public and media love to fixate on the S&P 500 and NASDAQ, but to me it’s not so much a “stock market” but more of a “market of stocks.” 

If you are willing to look past the headlines and ignore the perma-bears, you can usually find a bull market somewhere.

A good place to start is with sectors and industries that are trading above their 200 day moving average.

Below are a few of the more popular and well known areas of the market that have shown relative strength the last few months and are now trading firmly above their 200 day moving averages:

DIA – Dow Jones Industrial Average
IVE – S&P 500 Value
XLB – Materials
IBB – Biotechnology
XLF – Financials
XOP – Oil & Gas
XLV – Health Care
XLI – Industrial
BJK – Gaming
XLB – Materials
XLP – Consumer Staples
COW.TO – Global Agriculture
XEG.TO – TSX Energy
XCG.TO – Canadian Growth

Is the bottom in? Or is this just another bear market rally?


Greg Rieben

Greg has more than 20 years of experience as an independent trader and investor with a demonstrated history of successfully guiding individuals through the challenges of managing their own portfolios. After graduating from university, he went to work for a Mutual fund...