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Technically Speaking, January 2012

LETTER FROM THE EDITOR

We are starting the New Year for the newsletter by offering you a variety of topics. Hopefully we are reflecting the wide variety of work members of the MTA are doing in the real world. Celebrating the New Year involves a number of traditions and applying technical analysis is also rooted in a number of traditional tools, many of which are updated and applied in unique ways. We feature the work of Eric Leake and John Kosar, CMT, showing how they are applying traditional tools to create valuable forecasts. Jeb Handwerger applies these types of tools to a market that isn’t widely followed, rare earth metals, but is in the news quite frequently. Ken Safian has long been applying traditional tools in an untraditional way to economic data in addition to following the stock markets with a technical-based approach. We also highlight a new book from Christopher Grafton, CMT, which explains a traditional tool, cycles, in a new way. Please let us know what you are doing and allow us to share

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What's Inside...

OH TREND…WHERE FOR ART THOU?

by Eric Leake

In the past six months markets have had more ups and downs than a Shakespearean drama. Looking at the cumulative points traded on the S&P 500 regardless of advancing or declining days since June...

RALLY IN RARE EARTH STOCKS LONG PAST DUE

by Jeb Handwerger

It is important to highlight what must be said in this sector so essential to the economic survival of the United States and The West. We will not belabor our reader’s knowledge of the importance...

LETTER FROM THE SYMPOSIUM CHAIR

by Jeffery E. Lay, CMT

On behalf of the Board of Directors of the Market Technicians Association, it is my high privilege to invite you to our 2012 Annual Symposium – Technical Analysis Applied: Quantitative Investing in...

INTERVIEW WITH CLARE WHITE, CMT

by Clare White, CMT & Amber Hestla-Barnhart

How would you describe your job? I provide technical analysis and option strategy assessments to my customer’s clients at Optionetics. It includes both print and various electronic formats via...

SAFIAN INVESTMENT RESEARCH: INVESTMENT STRATEGY REPORT FOR INSTITUTIONAL INVESTORS

by Ken Safian

Editor’s Note: Ken Safian has been providing detailed analysis of the markets and the economy for decades and his work provides an example of the application of the principles of technical analysis...

MASTERING HURST CYCLE ANALYSIS

by Christopher Grafton, CMT & Michael Carr, CMT

Hurst’s cycle work is one of the pillars of technical analysis, but has been largely inaccessible and unknown to many traders. J. M. Hurst was a rocket scientist, an aerospace engineer in the...

US FINANCIAL UPDATE FOR DEC. 2011

by John Kosar, CMT & Michael Carr, CMT

A webcast presentation was conducted by John Kosar, CMT on December 14th, 2011 as part of the MTA’s Educational Web Series. This webcast can be access by visiting:...

COLUMBUS DAY PRESENTATION AT ADELPHI UNIVERSITY

by Jeanette Schwarz Young CMT, CFP, CFTe, MS & Ralph Acampora, CMT & Bruce Kamich, CMT

Recently, the MTA Educational Foundation presented the basics of technical analysis to an audience at Adelphi University. This is the oldest institution of higher education for liberal arts and...

OH TREND…WHERE FOR ART THOU?

OH TREND…WHERE FOR ART THOU?

In the past six months markets have had more ups and downs than a Shakespearean drama. Looking at the cumulative points traded on the S&P 500 regardless of advancing or declining days since June 1, the S&P has traveled a total of 2,383 points through December 20, 2011. That is more than double the value of the index! The entire value of the S&P 500 has experienced 200% turnover in just the last 6 months. And what do we have to show for it? A loss of -7.1% for the S&P since June 1.

A Flat 200 Day Average for U.S. Equities

The lack of a discernible trend can be seen in the 200 day moving average. The 200 day average is widely accepted as a good indication of longer term market trends, and is illustrated in the chart of the S&P 500 below. Notice the clear rising and falling slope, regardless

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Contributor(s)

Eric Leake

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RALLY IN RARE EARTH STOCKS LONG PAST DUE

RALLY IN RARE EARTH STOCKS LONG PAST DUE

It is important to highlight what must be said in this sector so essential to the economic survival of the United States and The West. We will not belabor our reader’s knowledge of the importance to our industrial survival especially of the critical rare earths. It is agreed that these elements are the very lifeblood of national growth as a modern nation.

It is well known that as our corporate society evolves, these elements are vital for countries to stay competitive with the Chinese who are actually making constructive advances in this area. Just think of the benefits that could accrue to the Japanese Auto Industry if they didn’t have to go hat in hand to their Chinese neighbors who are exploiting the rare earth issue asking for more a la Oliver Twist.

Not only do the Chinese have a twenty year lead on what was essentially our native domestic wealth, but

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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.

Contributor(s)

Jeb Handwerger

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LETTER FROM THE SYMPOSIUM CHAIR

LETTER FROM THE SYMPOSIUM CHAIR

On behalf of the Board of Directors of the Market Technicians Association, it is my high privilege to invite you to our 2012 Annual Symposium – Technical Analysis Applied: Quantitative Investing in a Qualitative World.

This year, we concentrate our interests on the strategy and execution side of our profession. With a diverse roster of industry experts, we’ll discuss challenging technical opportunities market participants encounter daily – and how to exploit them. The conversation will concentrate on quantitative, unemotional techniques suitable for navigating today’s complex financial system, always with an eye toward risk control.

The event will be held at a truly marquise location – Pier Sixty, New York’s largest venue with breathtaking water views. With 20,000 square feet of conference space, we’ve found an ideal location suitable for our exclusive use. This year, attendees will enjoy ample working space, complete with wireless high-speed Internet access for accessing their personal workstations. Moreover,

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)

Jeffery E. Lay, CMT

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INTERVIEW WITH CLARE WHITE, CMT

INTERVIEW WITH CLARE WHITE, CMT

How would you describe your job?

I provide technical analysis and option strategy assessments to my customer’s clients at Optionetics. It includes both print and various electronic formats via articles, videos and webinars. My focus markets for trading include the US equities and options markets; however, I do assess other markets as part of my analysis.

What led you to look at the particular markets you specialize in instead of another tradable?

I started trading equities and options, but was more partial to the limited risk and hedging aspects of the latter. I had the opportunity to specialize in options while working at a large brokerage on the retail side, then capital markets side of the business. By the time I left that firm, ETFs were picking up substantial steam and I no longer felt the need to diversify into the
futures markets.

Do you look at any fundamental or economic inputs to develop

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)

Clare White

Clare White, CMT

SAFIAN INVESTMENT RESEARCH: INVESTMENT STRATEGY REPORT FOR INSTITUTIONAL INVESTORS

SAFIAN INVESTMENT RESEARCH: INVESTMENT STRATEGY REPORT FOR INSTITUTIONAL INVESTORS

Editor’s Note: Ken Safian has been providing detailed analysis of the markets and the economy for decades and his work provides an example of the application of the principles of technical analysis to economic data. This is a brief extract of a recent report that highlights this type of research and some background on the firm.

Flow of Funds – 3rd Quarter 2011

Since 2008 we have been referring to this economic period as a “new era”, yet investors and analysts do not seem to be revising their thinking and models sufficiently to reflect this situation. Undoubtedly, most have adjusted their way of viewing interest rate conditions due to Federal Reserve actions, but their measures of valuation, economic conditions and patterns of the consumer have not changed that much in the majority of cases. Certainly, the hedge fund industry has changed because of the difficulties and illegalities in this sector, but there

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)

Ken Safian

MASTERING HURST CYCLE ANALYSIS

MASTERING HURST CYCLE ANALYSIS

Hurst’s cycle work is one of the pillars of technical analysis, but has been largely inaccessible and unknown to many traders. J. M. Hurst was a rocket scientist, an aerospace engineer in the 1960s.

He applied his math and engineering skills to the stock market and offered a glimpse into his work with a short book called “The Profit Magic of Stock Transaction Timing” (1970, Traders Press). Hurst also produced a detailed course that he published in the early 1970s and then Hurst seemed to disappear.

The ten volumes that made up the original Cycles Trading and Training Course was located by Traders Press and is now available for traders looking at an effective way to apply cycle analysis to their work.

Christopher Grafton has delivered a comprehensive summary of Hurst’s work and expanded on the analysis techniques. He also brings Hurst’s work into the

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)

Christopher Grafton

Christopher Grafton, CMT

Michael Carr, CMT

Michael Carr, CMT

US FINANCIAL UPDATE FOR DEC. 2011

US FINANCIAL UPDATE FOR DEC. 2011

A webcast presentation was conducted by John Kosar, CMT on December 14th, 2011 as part of the MTA’s Educational Web Series. This webcast can be access by visiting: http://go.mta.org/194 

John makes precise and often accurate market forecasts. He began his presentation by reminding the audience about a forecast he had made during at an MTA presentation on August 3. At that time, John noted, “July breakdowns in European equities led this week’s breakdown in the US, which targets another 8% decline in the US broad market before its larger May decline (with some assistance from the US economy) may be completed. Although extremes in some near term breadth statistics suggest the potential for a minor rebound first, perhaps over the next week or so, relative underperformance by the PHLX Semiconductor Index and a bearish nonconfirmation according to Dow Theory (among other indicators) suggest that the May decline in the US stock

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)

John Kosar, CMT

Michael Carr, CMT

Michael Carr, CMT

COLUMBUS DAY PRESENTATION AT ADELPHI UNIVERSITY

COLUMBUS DAY PRESENTATION AT ADELPHI UNIVERSITY

Recently, the MTA Educational Foundation presented the basics of technical analysis to an audience at Adelphi University. This is the oldest institution of higher education for liberal arts and sciences on Long Island, and the University serves more than 5,000 undergraduate students and over 2,900 graduate students in a variety of programs. The MTAEF presentation was held at the Garden City, New York campus. The presentation was made by Ralph Acampora, CMT, Bruce Kamich, CMT, and Jeanette Young, CMT, CFP, MS.

The three gave a very elementary introduction to technical analysis showing the group how the same information can be interpreted in many ways. Ralph did a wonderful job explaining and speaking about Dow Theory and Bruce did a terrific job opening the audiences mind to Japanese Candlestick Analysis. I used a power point to demonstrate how information can be translated to charts. Line charts, point and figure, candlestick, bar, 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)

Jeanette Schwarz Young CMT, CFP, CFTe, MS

Ralph Acampora, CMT

Ralph Acampora, CMT

Bruce Kamich, CMT

New Educational Content This Month

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