Technically Speaking, February 2020

The month of March is said to come in like a lion and go out like a lamb. If we apply that to this January, it was pretty much the reverse. After months of nary a hiccup, the stock market growled its way into the close and in the process wiped out its early gains.

It does seem that the market was set up for a problem, from overzealous sentiment to various valuation comparisons to 2000. Still, the real problem was knowing when. The market needed an excuse to do what it had to do and along came another deadly virus to virtually shut down the world’s second largest economy.

And what better time to think about what we did right and what we did wrong leading up to the top? Did we panic at the first whiff of the Hindenburg Omen? Was the CNN Fear and Greed Index our kryptonite? Did we play along with record unemployment? BTFD? Or panic when the yield curve arguably inverted again? Iran? China (the trade deal part)? Politics? Plunging oil? Plunging copper?

To all that, all the pure technician in me hears is, “blah, blah, blah.”

No, I’m not going to say none of that matters but it does make me appreciate the simply beauty in assessing price action itself. Or, as we say here in my new gig, Supply and Demand.

This month, we continue Bruno DiGiorgi’s History of Wall Street series with installment number five. We’ve also got a piece from a decade ago called The Top Technical Analysts, which answers the question many of us hear – “Where are the rich technicians?”  It was written in 2013 so the numbers are off, as are some of the firm names. But it is a timeless story that should make all technicians proud, especially when doubt creeps in that our processes don’t work anymore.

This month’s member interview is with Greg Harmon, of Dragonfly Capital Management. Considering he never heard of the CMT Association until fairly recently, he’s gotten quite involved.

There is chapter news from New York and Minnesota, as per usual, and we once again plead for other chapters to let us know what is going on with their members and programs.

We’ve also got a list of CMT candidate resources, membership news and an invitation to submit a paper to one of our partner organizations. Don’t say there are no places for you to publish your ideas.  And as always, we’d love to publish something you wrote right here in this newsletter. Can you think of a better place for beginners to share their ideas? Don’t worry, we don’t bite. In fact, we’ll help you develop your writing style.

Michael Kahn, CMT


What's Inside...

President’s Letter

This month, let’s talk about maintaining and improving your personal and professional momentum – “sharpening your tools”.

Stephen Covey, the...

Read More

Resources for CMT Candidates

Many of you are beginning your journey towards earning the CMT charter.  Others are moving on to the next step...

Read More

New York Chapter Speaker Summary

On Wednesday, January 15, 2020, the New York Chapter hosted Larry Connors, Chairman and...

Read More

History of Wall Street - Part 5 of a Periodic Series

This is the fifth installment of a periodic series rerun chronicling the history of the street. The series originally ran...

Read More

Minnesota Chapter Speaker Summary

On January 21, 2020, 20 members of the Minnesota Chapter met at Piper Sandler’s headquarters to hear a presentation by...

Read More

Top Technical Analysts of All Time Share Their Secrets

This is a blog post first published in 2013 on the New Zealand-based site, led by the author Derry...

Read More

Member Interview – Greg Harmon, CMT

Please tell us what you do professionally.

I have a multifaceted career.  I manage money for clients in separate...

Read More

Chris Cain, CMT And Larry Connors Announced As 2020 Dow Award Winners

The CMT Association announced on Friday that Chris Cain, CMT and Lawrence Connors, of The Connors Group, are the 2020...

Read More

NAAIM Competition Founders Award

The National Association of Active Investment Managers (NAAIM) invites members of the CMT Association to submit research to their annual...

Read More

President’s Letter

This month, let’s talk about maintaining and improving your personal and professional momentum – “sharpening your tools”.

Stephen Covey, the popular and successful self-help author promoted a similar mantra in his 1989 book, The 7 Habits of Highly Effective People.  The idea, or lesson, was to take some time, no matter how busy you were, to self-renew. Grow by refreshing yourself, by learning new things, and by enhancing your tool kit.  I’ll give you a few suggestions that can be timely in the context of the current market volatility.

The first recommendation is a book written by a good friend of the CMT Association, Dr. Andrew Lo.  The book I’m referring to is his 2017 work titled, Adaptive Markets.  In it, Dr. Lo argues the Efficient Market Dogma is an incomplete framework when it comes to understanding and profiting in the markets.  He advances a more complete framework he calls the Adaptive Markets Hypothesis.  In that theory, he melds economic theory with behavioral finance and allows the rational to coexist with the irrational.  He provides some great stories and provides support for the theory using the work done in biology, neuroscience, AI, and psychology.  This is an interesting read and I recommend it to you to sharpen your tools.  This book is especially helpful in our current market dislocation due to the Coronavirus!  (Amazon gives it 4.3 stars)

The second recommendation is a recent book by Greg Zuckerman, a highly decorated writer for the WSJ.  The book is called, The Man Who Solved the Market.  In it, Zuckerman traces the history of Renaissance Technologies and its founder, Jim Simons.  It is a fascinating book about quantitative and algorithmic trading at an institutional level – but it didn’t start that way.   It also reveals a lot about the personalities and issues involved in building a world class firm.  If that doesn’t draw you in – maybe the $100 billion in profits the firm generated over its lifetime will.  It’s an easy read and you’ll learn a lot about them and yourself if you take the time.  (Amazon gives it 4.6 stars)

My last recommendation is a live event in NY in April, our CMT Association Symposium.  Don’t miss it!  Be a part of this exciting, high-energy event.  The speaker lineup is shaping up to be one of the best ever.  The content is full of timely and meaningful learning opportunities.   The panels and breakout sessions look very strong, and will give you insights into the industry as well as a chance to engage in meaningful dialogue with notable researchers and analysts.  So far, early registrations are significantly higher than last year, which means it is shaping up to be a large and awesome group of practitioners.  This is a chance to sharpen your tools in real time.  I look forward to seeing you there.

If I can be of any help or if you have any questions – please don’t hesitate to reach out.

Be well.


Scott G. Richter, CMT, CFA, CHP

Scott Richter, CMT, CFA, CHP is a senior portfolio manager for Westfield, which manages over $4B in AUM.  He is the lead portfolio manager for alternative assets and is also responsible for investments in the energy and utility sectors.  He was formerly...

Resources for CMT Candidates

Many of you are beginning your journey towards earning the CMT charter.  Others are moving on to the next step in the process.  And we know that there may be some who have experienced a drawdown and may be reevaluating the trend in preparation for the next breakout.

This seems a good time to recap some of the resources beyond our standard texts that candidates will find useful in their studies.

  1. The CMT Program FAQs is the single best place to find critical administrative information about the CMT Program, the exams, the membership process, and ethics. The topics on this page include grading, fees, and exam registration.  The staff reviews and updates these regularly so they act as a ready reference for candidates.
  2. The CMT Association is committed to promoting the ethical practice of our discipline. Therefore, ethics are a topic for questions on all three levels of the CMT exams.  Having adopted the CFA Code of Ethics and Standards of Professional Conduct – which is the focal point of our exam questions – the CMT Association makes the Code and Standards available via our website.  Also available is the CFA Standards of Practice Handbook.  The Handbook contains detailed discussion and case studies related to the Code and Standards.  In addition to those two texts, the CFA Institute also makes available a video series that discusses each of the seven top-level topics and the subtopics that make up the Code and Standards.
  3. Several of the chapters in our texts are excerpts from the work of Perry Kaufman. Some of these contain references to additional files.  Wiley and Mr. Kaufman have been very helpful in making these files available to our candidates.  This link will take you to the relevant page:
  4. Finally, I encourage all candidates to immerse themselves in the language of technical analysis and current perspectives on markets. This is usually done by reading magazines, blogs, websites, and research reports.  A convenient utility for this is the CMT SmartBrief.  It is a free daily email aggregating interesting and timely articles on technical analysis and markets.

I hope you will find these resources valuable in your studies.


Stanley Dash, CMT

Stanley Dash is the CMT Program Director at the CMT Association, a global credentialing body. In this role, Mr. Dash works with subject matter experts, candidates, and the Association’s members to maintain and improve the curriculum, the test experience, and the value...

New York Chapter Speaker Summary

On Wednesday, January 15, 2020, the New York Chapter hosted Larry Connors, Chairman and Principal Executive Officer and Chris Cain, CMT, Senior Quantitative Researcher from Connors Research LLC. Their presentation was titled: “The Alpha Formula Book and Quantamentals ” and was broken down into three sections:

  1. The three first principles that make up “The Alpha Formula”
  2. The strategies presented in “The Alpha Formula” book along with their results
  3. Quantamentals – Combining Technical and Fundamental analysis in a quantitative framework for better investment results

Larry walked us through the first part of his presentation which discussed his team’s book “The Alpha Formula – High Powered Strategies to Beat the Market with Less Risk.” The three primary ideas in this book include applying first principles to portfolio management, combining uncorrelated strategies in a portfolio to increase risk-adjusted returns, and designing quantitative strategies backed by inherent human behavior (which is unlikely to change).

The first principles used as the core of their approach include the fact that markets go up, markets go down, and markets go through times of stress. Next, Larry shared Ray Dalio’s research, which demonstrates that having 4-5 uncorrelated strategies is sufficient enough to reduce the majority of risk in a portfolio. The benefits of any additional uncorrelated return streams after that are marginal.

In section two, Larry and Chris walked us through the strategies from their book. These strategies look to take advantage of certain market tendencies caused by our behavioral biases – namely long-term trend following and short-term mean reversion. This is where the meat of their research was presented, sharing the construction and results of each of the strategies formulated from the market truths Larry covered in section one. All of this research and data are included in their slide deck.

During the second half of the presentation, Chris Cain took center stage to explain their new white paper on Quantamentals. The conclusion of this work is that combining fundamental and technical analysis in a quantitative, rules-based framework leads to improved performance compared to each discipline in isolation.

They’ve coined a term the intersection of fundamental, technical, and quantitative analysis; Quantamentals.

Before presenting the results, Chris walked us through the fundamental (value and quality/profitability) and technical (low volatility/low beta, time-series momentum, and cross-sectional momentum) factors used in their models. This included back tests of each factor on a stand-alone basis.

After laying that groundwork, we moved into a series of back tests which analyzed the results generated by combining these fundamental and technical factors in a variety of different ways. Needless to say, the results were very compelling and worth a look for anyone interested in markets.

The entire presentation was filled with a ton of valuable research and insights that the short summary above cannot do justice. The last slide also included a number of resources available for those interested in learning more about their research and approach. I’d highly encourage you to check it out if you haven’t already. Please email for access.

Thanks again to both Larry and Chris for taking the time to share their insights with us. It was a great topic to kick off the year and get us all thinking about how we can improve our approach as market participants in 2020.


Tom Bruni, CMT

Tom Bruni, CMT is a Technical Analyst at All Star Charts and the founder of BruniCharting. In May 2016 Tom graduated Magna Cum Laude from Molloy College’s Business Honors Program where he spent the majority of his four years exploring career paths...

History of Wall Street - Part 5 of a Periodic Series

This is the fifth installment of a periodic series rerun chronicling the history of the street. The series originally ran in Technically Speaking beginning in September 2000.

It’s Inauguration Day, April 30, 1789.  The “Wall” is gone, but the granite blocks remain as part of the City Hall building also located on Wall Street.  George Washington stands just inside the balcony of City Hall, recently re-named Federal Hall, about to take the Oath of Office.  At his side is Major Leonard Bleeker, who had been with Washington for the British surrender at Yorktown.  As the men wait, Bleeker, peering through the grand archway leading to the balcony, watches as the events unfold in the streets below.  Also watching from the second story window of his home across the street is Alexander Hamilton, future Secretary of the Treasury.  Though there remains little to show today’s visitor of this particular event, these two men, Bleeker and Hamilton, would be participants in a separate event, the manifestations of which still can be seen.

On Wall Street today, there stands a statue of George Washington on the spot where he took the Oath of Office.  If you stand there and look across the street as Washington must have you will see the end result of the work begun by Hamilton, shaped by Bleeker and as integral to the building of the new nation as the events taking place on that balcony in 1789.  For at the corner of Wall and Broad Streets, across from Federal Hall and within easy sight of Washington’s gaze, today stands the New York Stock Exchange.

From Humble Beginnings

The New York Stock Exchange came into existence because the United States of America needed a loan.  When Hamilton was made Secretary of the Treasury, his first job was to clear up the problem with the Continental Currency. With no tax and poor credit after the Revolutionary War, the Continental Currency had depreciated to about 1% of face value.

To re-value the currency, Hamilton knew he first had to establish good credit by paying off the war debt.  Hamilton’s plan to pay off that debt and re-value the dollar was to issue Treasury bonds.  In buying these bonds, the purchaser would be lending the government money, for which he could expect to receive interest payments.  Thus, on the morning of March 1, 1792, at 22 Wall St., the first of $7 million in government bonds were auctioned.  They paid 6% interest.  The event was so popular that it’s been going on almost continuously for over 200 years!

Hamilton’s bonds and the subsequent interest in the auctions brought about a coalition of brokers who decided to specialize in this instrument exclusively.  On May 17, 1792, these brokers signed the Buttonwood Agreement, taking its name from the shade tree under which they would meet.  By this agreement, they promised to trade only with each other and charge the public a commission of not less that 1/4 %.  This agreement is generally looked upon as the beginning of the “Big Board” and the broker who formed it, whose signature appears first on it and who is most responsible in organizing the individuals who made Hamilton’s auctions possible, was Major Leonard Bleeker.

Incidentally, as a by-product of this auction, the term “stock market” came into use.  Although the first instruments auctioned were bonds, the paper on which they were printed was known as printer’s stock paper and therefore the auction market in which these securities were traded became known as the “stock market.”

Editor’s note – For those of you outside of New York, Bleeker Street is a rather well-known street in the Greenwich Village section of Manhattan. Interestingly, Bleeker Bob’s records, an institution in the 70s, was not on Bleeker Street.


Bruno DiGiorgi

Minnesota Chapter Speaker Summary

On January 21, 2020, 20 members of the Minnesota Chapter met at Piper Sandler’s headquarters to hear a presentation by John Kolovos, CFA, CMT, Chief Technical Strategist at Macro Risk Advisors.

John blends traditional forms of technical analysis with quantitative methods and believes technical things happen for fundamental reasons. He cited factor trends as among the most important because active managers are focused on factor tilts and trends tell which ‘ponds’ to swim in. He discussed his 2020 price target of 3455 on the S&P500 and the process he used to arrive at his estimate.

The long-term uptrend remains well established since 2009, with 2994 as the lower limit and 3915 as the upper limit, with his target is the average of the two. He noted that we are closing in on the target early but will likely see the rate of change slow throughout the year.

Additional markets discussed included copper, which he sees as breaking a reverse H&S pattern towards 300 and oil, which he sees as working through a three-leg correction towards $67/barrel. He mentioned that while $67 may be attainable, it is best if prices remain below it based on his review of the period 1989-1991. During this period, oil was in a secular bear market, similar to today. As tensions rose in June/July it was likely the presumption that stocks would consolidate and not collapse, but oil broke the dam with the breakout above well-defined resistance. Stocks broke down, eventually collapsing an additional 16%.


Kyle Lottman, CMT, CFA, CPA

Kyle Lottman, Wealth Management Advisor at Elevate Capital Advisors. Prior to joining Elevate, Mr. Lottman led a successful analyst career spanning nearly a decade in both equity and fixed income markets. During this time, he obtained the Chartered Financial Analyst® designation; regarded...

Member Interview – Greg Harmon, CMT

Please tell us what you do professionally.

I have a multifaceted career.  I manage money for clients in separate accounts using equities and options through a technical approach.  I run a subscription service for clients that wish to trade their own account.  I am also an Assistant Professor of Banking and Finance, Weatherhead School of Management, Case Western Reserve University.

How did you get there?

All of these roles have developed following a 22-year career trading and managing training desks at several Wall Street firms.  It started when I was laid off during the financial crisis and started Dragonfly Capital Management.  It was a consulting firm at first and then morphed into money management and the subscription service.  The teaching is the most recent. I began in 2015 on the introduction of a friend to the head of the Banking and Finance department.  We talked about my process for managing risk and that led to the first course, Using Options and Technical Analysis to Manage Portfolio Risk.  It expanded from there to now being a full-time professor.

Who was an early mentor in your career?

Early in my career I talked often with George Wellde, a former Vice Chairman at Goldman Sachs.  Later adding John McFarlane, who was at Salomon Brothers and then Tudor Investments.

What book/author was most influential in helping you understand TA?

The most influential book on TA for me was Steve Nissan’s book on Japanese Candlesticks.  Technical Analysts are visual people but Japanese Candlesticks are the most visual of our tools.

What do you like to do when you are not looking at markets?

When not looking at markets, or teaching about them, I like to spend time with family, walking to clear my head and drinking wine.

What brought you to the CMT Association?

It might surprise you, but despite that 22-year Wall Street career I was not aware of the CMT Association until after I was laid off.  I had worked toward the CFA at the suggestion of my employer but then learned of the CMT program through social media.  In my early days of social media, I would post charts on Twitter all day Saturday as part of my prep for the coming week.  The people I met through Twitter in real life introduced me to CMT.  I got my designation and developed many more relationships.  Now I chair the Admissions Committee and continue to promote the CMT Association to others on social media.

What is the most useful benefit of membership for you?

The most useful benefit of membership is knowing that those with a CMT designation can be trusted in this world of social finance, where there are pretenders and outright frauds, to have meaningful conversations about markets.


Greg Harmon, CMT

Gregory W. Harmon, who holds a Chartered Market Technician (CMT) designation, is the President and Founder of Dragonfly Capital Management, LLC, a company that provides daily technical analysis of securities markets and consulting services to the marketplace. Greg was previously the CIO...

Chris Cain, CMT And Larry Connors Announced As 2020 Dow Award Winners

The CMT Association announced on Friday that Chris Cain, CMT and Lawrence Connors, of The Connors Group, are the 2020 winners of the CMT Association’s prestigious Charles H. Dow Award.

The pair received the Dow Award for their research, entitled “Quantamentals – Combining Technical and Fundamental Analysis in a Quantitative Framework for Better Investment Results,” a paper that demonstrates a unique approach to the application of technical analysis. They will be honored during the CMT Association’s 2020 Annual Symposium on April 2-3, 2020.

In addition to receiving the award recognition, Mr. Cain and Mr. Connors will give a presentation on the topic of “Quantamentals” during the 2020 Annual Symposium. Attendees will have the opportunity to learn firsthand about the development and implementation of this winning strategy, ask questions, and think critically about their own approach in the context of this new research.

Mr. Cain and Mr. Connors demonstrated that a combination of investment styles including fundamental and technical analysis within a quantitative, rules-based framework led to greatly improved performance.  They also discovered that identifying known factors in their model led to increased performance over the course of the last 16 years.

The winning paper will be available to read in full on the CMT Association website after its publication in the Spring 2020 edition of the Journal of Technical Analysis, which will be published in early March. The archives of previous award-winning papers are also accessible on the Dow Award page.

Since 1994, the CMT Association has presented the Charles H. Dow Award for excellence and creativity in technical analysis. This Award represents the most significant competition for recognition in the field of technical analysis. The papers honored with the Award have historically represented the richness and depth of the technical analysis discipline.


Marianna Tessello

Marianna Tessello served as the CMT Association’s digital producer from 2018 until 2021. She was responsible for the management of most of the association’s front-end digital assets during that time, including social media production, current website information and updates, and various communication...

NAAIM Competition Founders Award

The National Association of Active Investment Managers (NAAIM) invites members of the CMT Association to submit research to their annual Founders Award.

The Founders Award is a research competition that draws entries from all over the world in the areas of computational finance, advanced algorithms, tactical investment management techniques, strategic investment strategies and numerous other topics, all designed to further our knowledge of the active investing world.

The competition is open to anyone involved in financial services, including academic faculty, researchers and graduate students, investment advisors, analysts and other financial professionals.

Papers need to focus on describing an investment technique, its pros and cons and the market conditions under which it is expected to fare well or poorly, or should explore topics in active investing that are of broad interest to the investment community.

The winning author will receive the following prize package:

  • $5,000 cash prize and the opportunity to present the winning paper at the 2020 NAAIM Uncommon Knowledge conference, May 3-6, at The Westin Tampa Waterside
  • Uncommon Knowledge 2020 registration, domestic coach airfare and one night lodging for one author of the winning paper.
  • NAAIM membership for one year.

Deadline:  February 28, 2020

Final Paper (up to 30 pages) together with a required 750-1000 word abstract must be submitted electronically to by 11:59 pm EST on Friday, February 28.

Winners will be notified on or before Friday, April 3, 2020.


Tyler Wood, CMT

Tyler Wood serves as Managing 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 a seasoned business...