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Technically Speaking, February 2019

So far, this year has been dominated by the partial government shutdown. Does it affect the markets? Well, maybe indirectly. New issue IPOs are held up due to a lack of resources at the regulators. Tax refunds may be delayed, so investors might be a little cash tight. And most important of all, the shutdown and specter of a second downgrade of U.S. sovereign debt looms large. The deadline to raise or suspend the debt ceiling is just weeks away. Volatility in stocks remains high, bitcoin seems to be fading from interest, and for the first time in a long while gold shows signs of life. Naturally, the flattish yield curve, Brexit, and slowing global growth made the pundits warn of gloom and doom. Don’t tell Mr. Dow and Ms. Nazzie (or their Brazilian cousin Bovie). This month, the theme here centers on jobs. No, not jobs in the general economy, but jobs for technicians. We surveyed a group of technicians who took the plunge and went out on their own. After all, the number of direct, salaried jobs on the Street

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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...

President's Letter

by Scott G. Richter, CMT, CFA, CHP

Symposium Time: Learn – Connect – Grow The 2019 CMT Association Annual Symposium will take place April 4-5 in New York City.  We will gather with 250-300 peers and thought leaders from...

What the Downfall of LTCM Taught Me About Risk Management

by Dan Russo, CMT

This article was originally published on ChaikinAnalytics.com last November and is reprinted here with permission. Let me share a cautionary tale about risk management. I will never forget the story...

Chicago Chapter Meeting Review

by Jim Erdmier, CMT

2018 was a year of star-studded events for the Chicago CMT Association chapter, culminating on November 8th with JC Parets, CMT, of All Star Charts. Also presenting at the meeting was Tom Bruni, who...

Hanging Your Own Shingle

by Michael Kahn, CMT

Far from being a roofer, hanging a shingle means opening an office or business, especially in a profession. In the first half of the 1800s, lawyers and later doctors and businesses, used shingles for...

A View of the TA Business from a Veteran

by Michael Kahn, CMT

When asked what he thought about the career path for market technicians, industry veteran Rick Bensignor said, “I wouldn’t in a million years recommend anyone try to make a living simply doing...

Minnesota Chapter Meeting Review

by Mahesh Johari, CFA

Fred Meissner, of the FRED Report, presented to our group on January 15, 2019.  Fred has a 36-year career in investment finance spanning a variety of roles.  His talk was about...

George Schade, CMT Interview

by George A. Schade, Jr., CMT

Please tell us what you do professionally. I am retired now from a 42-year career practicing law and serving as a trial court judicial officer. My involvement in technical analysis has chiefly...

Mike Epstein Award

by Julie Dahlquist, Ph.D., CMT

The Technical Analysis Educational Foundation awarded the 2018 Mike Epstein award to Dave Lundgren. Dave holds both the CMT and CFA designations and serves on the Board of Directors of the CMT...

2019 CMT Curriculum Texts

by Stanley Dash, CMT

The 2019 CMT Program texts are now available from Wiley at https://www.efficientlearning.com/cmt/. This year, in addition to keeping the content robust and consistent with the goals of the CMT...

CMT Association News

by Marie Penza

Membership The CMT Association would like to congratulate the following members on their new positions:  Parningotan Julio Hutabarat, CMT, Senior Fund Manager at Pacific Capital...

President's Letter

President's Letter

Symposium Time: Learn – Connect – Grow

The 2019 CMT Association Annual Symposium will take place April 4-5 in New York City.  We will gather with 250-300 peers and thought leaders from around the world and discuss markets, share ideas about all things technical, and size up the industry.  

Bill Kelleher, Tyler Wood, Alvin Kressler and the staff at the CMT Association have a fantastic program lined up with prominent practitioners from around the globe. This year’s event theme is Behavioral Finance. It’s a timely and important subject to understand. In fact, Richard Thayer received the Nobel Prize in Economic Sciences in 2017 for his work on Behavioral Finance; even academia recognizes the importance of this topic.  

I’ve made my plans to attend and I’m excited about our premier event of the year! Please consider joining us – you’ll be glad you did.

Now, before you dismiss my message as some advertising blurb that

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)

Scott Richter, CFA, CMT, CHP

Scott G. Richter, CMT, CFA, CHP

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What the Downfall of LTCM Taught Me About Risk Management

What the Downfall of LTCM Taught Me About Risk Management

This article was originally published on ChaikinAnalytics.com last November and is reprinted here with permission.

Let me share a cautionary tale about risk management.

I will never forget the story of the hedge fund, Long Term Capital Management. I was a senior in college and very interested in a career on Wall Street. One of my teammates from the hockey team, a year older than I, had just started working at LTCM that summer. This was an amazing opportunity for him. The firm employed Nobel Prize winners and was run by arguably one of the most successful bond traders on the street.

After a few years of success, LTCM was the envy of Wall Street. Investors were clamoring to have the fund take their money, and college grads with an eye toward the Street sent resumes to LTCM in the hopes of landing a position, any position. But then, the unthinkable happened and

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)

Dan Russo, CMT

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Chicago Chapter Meeting Review

Chicago Chapter Meeting Review

2018 was a year of star-studded events for the Chicago CMT Association chapter, culminating on November 8th with JC Parets, CMT, of All Star Charts. Also presenting at the meeting was Tom Bruni, who is a technical analyst at All Star Charts. As per usual with meetings featuring JC, the house was full with 47 members and guests. Seats were in shorter supply than liquidity in the Greek bond market.

Convening in the original conference room at the Chicago Board of Trade, JC and Tom covered a wide array of markets. Weakness in regional banks and strength in palladium were two take-aways and the trends in those markets continued in the following weeks.

The Chicago Chapter was fortunate last year to feature presentations by Jim Bianco, CMT, Katie Stockton, CMT, Steven Quimby, Richard Ross, CMT, Stanley Dash, CMT, Robert Pardo, Andrew Thrasher, CMT, Gina Martin Adams, CMT and Stan Harley.

We also started

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 Erdmier, CMT

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Hanging Your Own Shingle

Hanging Your Own Shingle

Far from being a roofer, hanging a shingle means opening an office or business, especially in a profession. In the first half of the 1800s, lawyers and later doctors and businesses, used shingles for signboards to advertise that they were open for business.

For many of us, working in the investment arena often means finding a job in a big Wall Street firm or joining a national chain of investment advisors or stock brokers. You go to the office, work some magic with Excel and Word, maybe clear something through compliance to post on Twitter, and every two weeks a paycheck appears in your bank account.

It was a great gig…for a while. Now, with the employment landscape in our field changing constantly, if not shrinking outright, these jobs are getting harder to find. Sure, you can “apply your skills” as an insurance salesman working solely

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 Kahn, CMT

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A View of the TA Business from a Veteran

When asked what he thought about the career path for market technicians, industry veteran Rick Bensignor said, “I wouldn’t in a million years recommend anyone try to make a living simply doing technical analysis. There is simply no market for it.”

This statement is not as dire as it looks and let’s state up front that Rick believes 100% in technical analysis. He simply acknowledged that the business has drastically changed since he read his first chart over 40 years ago.

This does not seem to be the type of article you expect to read in the CMT Association newsletter. But it is an important one. Let’s quickly shift to why.

In numerous interviews over the years, Bensignor usually offers one sharp insight, “Technical analysis is a skill, not a career.” What that means is that it is a tool people can use to do their primary jobs better.

TA improves one’s ability, but

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 Kahn, CMT

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Minnesota Chapter Meeting Review

Minnesota Chapter Meeting Review

Fred Meissner, of the FRED Report, presented to our group on January 15, 2019.  Fred has a 36-year career in investment finance spanning a variety of roles.  His talk was about Advances/Declines and related indicators; he told us that the NYSE Composite is a better representation of the economy and marketplace than the narrower S&P 500 index. 

As for specific technical tools, Fred talked about how the McClellan oscillator showed a bullish divergence early in 2018.  However, a similar recent divergence has thus far shown to be a false signal.  He also highlighted a recent very high reading of the Zweig Breadth Thrust indicator – in the past high readings have often been followed by retests of recent lows. 

In the current environment, most sector A/D lines are making lower highs, but a few sectors show some positive relative A/D performance: Utilities, Foods & Staples, Household & Personal Product sectors.  His current

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)

Mahesh Johari, CFA

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George Schade, CMT Interview

George Schade, CMT Interview

Please tell us what you do professionally. I am retired now from a 42-year career practicing law and serving as a trial court judicial officer. My involvement in technical analysis has chiefly revolved around the Market Technicians Association (CMT Association) in whose activities I was involved almost from the first day of my first MTA conference in 1987. In my first 20 years of membership, I served on every committee of the MTA. My legal background allowed me to serve in many ways and events. Today, I focus on the history of technical analysis and its preservation.

How did you get there? I graduated from law school in 1971. After serving in the military, I moved to Arizona, where I resided all my adult life.

My interest in financial markets began as a private investor when, in the spirit of helping my community, I bought shares in new local companies. In order

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)

George A. Schade, Jr., CMT

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Mike Epstein Award

Mike Epstein Award

The Technical Analysis Educational Foundation awarded the 2018 Mike Epstein award to Dave Lundgren. Dave holds both the CMT and CFA designations and serves on the Board of Directors of the CMT Association.  In addition, he serves on the CMT Association audit committee, and chairs the organization’s advocacy committee, which works to increase investor awareness of the many advantages of incorporating technical analysis into the investment management process.

Not only has Dave been an advocate for technical analysis within the practitioner community, he has been a strong promoter of the teaching of technical analysis at the university level.  He currently serves on the adjunct faculty at the Brandeis University International Business School, where he teaches a course on technical analysis.  Through his position at Brandeis, Dave introduces primarily graduate students to the history and principles of technical analysis, as well as familiarizes them with the current practice of the field.  Students

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)

Julie Dahlquist, Ph.D., CMT

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2019 CMT Curriculum Texts

2019 CMT Curriculum Texts

The 2019 CMT Program texts are now available from Wiley at https://www.efficientlearning.com/cmt/.

This year, in addition to keeping the content robust and consistent with the goals of the CMT Program, special attention was given to the learning structure and reading flow of the texts, particularly Levels I and II.  This should make the study process smoother and better support candidates in persevering through each level.

Here’s a summary of the changes for 2019:

In the texts for all three levels, the Learning Objective Statements (LOS) that appear at the beginning of each chapter have been rewritten to serve as a better guide to the critical points in the chapter.  (The LOS are available in pdf on the Association website: Level I LOS, Level II LOS, Level III LOS.)

As noted in the front of each text:

A list of Learning Objectives appears at the beginning of each chapter.  These

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)

Stanley Dash, CMT

CMT Association News

CMT Association News

Membership

The CMT Association would like to congratulate the following members on their new positions: 

  • Parningotan Julio Hutabarat, CMT, Senior Fund Manager at Pacific Capital Investment
  • Tuavai Marie-Bornand, Senior Emerging Market Strategist Assistant at Crédit Agricole CIB
  • Rainer Michael, Founding Member at Blockchain & Crypto Association of Singapore (BCAS)
  • Arun Leslie John, CMT, for starting a new position as Lead Researcher at Century Financial
  • Aleksandar Bozic, Student Ambassador at CMT Association, Inc.
  • Brennan Basnicki CFA, CMT, CAIA, Founder at RipATrip
  • Bradley A. Berthiaume, CMT, promotion to Senior Vice President at Katahdin Trust
  • Abhishek H. Singh promotion to Growth Director -India at TradingView
  • Aakash Patel, Associate Credit Portfolio Group at JPMorgan Chase & Co.

CMT

Congratulations to all who passed their December 2018 exams!  Results for all levels of the CMT exams have been sent, if you didn’t receive them, please contact Marie Penza at marie@cmtassociation.org

Registration is now open for the June 2019 test administration.  Early registration ends on February 4th, standard

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)

Marie Penza

New Educational Content This Month

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