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Technically Speaking, January 2014

LETTER FROM THE EDITOR

This month’s newsletter begins with an article that covers the past and the present. Ralph Acampora, CMT, was present at the beginning of the MTA and has been a part of every major development in the organization during the past 40 years. He looks forward to the next 40 years of the MTA and expects much to change over that time. However, he also expects some things to remain as they are. Ralph, like so many others, expects the MTA to continue to be a professional organization where ideas are freely shared. The MTA will continue advancing the profession of technical analysis on Wall Street.

In addition to taking a long-term look into the future, we are also looking just a few months ahead in this issue. Although it is only January, the planning for this year’s Annual Symposium is well underway. In this month’s issue of Technically Speaking we are offering insights from two of the scheduled speakers, Perry Kaufman and John Murphy, CMT.

We hope that you will be planning to attend the Symposium and to participate in your local MTA Chapter in the coming year. We also hope you will share your work through the newsletter. Submissions can be sent at any time to editor@mta.org.

Michael Carr

What's Inside...

LOOKING BACK AND LOOKING AHEAD: A CONVERSATION WITH RALPH ACAMPORA, CMT

by Amber Hestla-Barnhart

In late-December, I had the chance to speak with Ralph Acampora, CMT, about the early days of the MTA, the organization’s growth over the past 40 years and his thoughts on where the MTA will be 40...

THE STOCK AND THE COMPANY

by Ralph Acampora, CMT

Editor’s note: This article originally appeared in the May 1982 MTA Journal, issue 13. It is still timely and offers useful information for technicians almost 32 years after it was written. One...

TRADING PHILOSOPHY AND STRATEGY OVERVIEW

by Perry J. Kaufman

Editor’s note: This article was published at KaufmanSignals.com and is reprinted here worth permission of the author. Understanding Systems and Markets Algorithmic trading systems bring the...

INTERMARKET ANALYSIS

by Arthur Hill, CMT

Editor’s note: This article originally appeared at StockCharts.com and is republished here with permission. Introduction Intermarket analysis is a branch of technical analysis that examines the...

INTEREST RATES AND STOCK PRICES

by Stan Lipstadt

Editor’s note: Stan Lipstadt, Vice President of the MTA in 1976-1977, and Vice President for seminars for the MTA on multiple occasions between 1978 and 1983, died on October 30, 2013 at the age of...

LONG-TERM ELLIOT WAVE ANALYSIS OF GOLD

by Lara Iriarte, CMT

Editor’s note: This article is presented as an example of a comprehensive approach to Elliott Wave analysis. Main Wave Count. Monthly Chart My main monthly wave count expects that a grand super...

A FORECAST FOR THE NIFTY

by Purab Shah

The Nifty is a benchmark index for the stock market in India. This index, along with many other global markets, reached a top in January 2008 at a high of 6357.10. On a closing basis, the Nifty made...

CHART OF THE MONTH

by stockcharts.com

...

LOOKING BACK AND LOOKING AHEAD: A CONVERSATION WITH RALPH ACAMPORA, CMT

LOOKING BACK AND LOOKING AHEAD: A CONVERSATION WITH RALPH ACAMPORA, CMT

In late-December, I had the chance to speak with Ralph Acampora, CMT, about the early days of the MTA, the organization’s growth over the past 40 years and his thoughts on where the MTA will be 40 years from now. In the early 1970’s, a young Ralph Acampora kept running into John Brooks while running errands on Wall Street. At that time, technical analysts relied on hard copy data services and chart books. As junior analysts at the firms, Ralph and John stood in line together to pick up the books directly from the publisher. While waiting in line for the data they needed to update their point and figure charts by hand, they realized technicians were probably the only group on Wall Street without a formal society where they could exchange ideas. The New York Society of Security Analysts (NYSSA) was the largest group of analysts. Analyst meetings were common on

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THE STOCK AND THE COMPANY

THE STOCK AND THE COMPANY

Editor’s note: This article originally appeared in the May 1982 MTA Journal, issue 13. It is still timely and offers useful information for technicians almost 32 years after it was written. One diagram says it all: For a well-rounded approach, one should integrate technical and fundamental analysis; when joined together, they create the whole picture.  The perennial battle between supply and demand is what makes markets, but unfortunately there is still ferment in the investment community. Some make it their sworn duty to pit the technicians against the fundamentalists. As moderator of the panel entitled “Integrating Technical Analysis with Other Research Disciplines,” the author of this article feels that his experience as an educator and a professional technician may provide some fresh insights into the meshing of these two investment disciplines. As an instructor in the basic tenets of technical analysis at the New York Institute of Finance for the last 12 years,

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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)

Ralph Acampora, CMT

Ralph Acampora, CMT

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TRADING PHILOSOPHY AND STRATEGY OVERVIEW

TRADING PHILOSOPHY AND STRATEGY OVERVIEW

Editor’s note: This article was published at KaufmanSignals.com and is reprinted here worth permission of the author. Understanding Systems and Markets Algorithmic trading systems bring the investor good returns and increased predictability. Compared to discretionary trading it is analogous to the turtle and the hare. You can’t rush a system or make it do anything other than what it was intended for. Each strategy has a particular profile: trend systems have more small losses and fewer large profits, and mean-reverting systems have many small profits and a few large losses. While you can alter these numbers somewhat, you cannot change the big picture, nor should you, and you cannot force a market to produce a profit on demand. It’s a matter of accepting the way a system performs, and the way prices move, and working with them. Of course, among the many trending and mean-reverting methods there are better ones. The best always

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)

Perry J. Kaufman

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INTERMARKET ANALYSIS

INTERMARKET ANALYSIS

Editor’s note: This article originally appeared at StockCharts.com and is republished here with permission. Introduction Intermarket analysis is a branch of technical analysis that examines the correlations between four major asset classes: stocks, bonds, commodities and currencies.  In his classic book on Intermarket Analysis, John Murphy notes that chartists can use these relationships to identify the stage of the business cycle and improve their forecasting abilities.  There are clear relationships between stocks and bonds, bonds and commodities, and commodities and the Dollar. Knowing these relationships can help chartists determine the stage of the investing cycle, select the best sectors and avoid the worst performing sectors. Much of the material for this article comes from John Murphy’s book and his postings in the Market Message at Stockcharts.com. Inflationary Relationships The intermarket relationships depend on the forces of inflation or deflation.  In a “normal” inflationary environment, stocks and bonds are positively correlated. This means they both

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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)

Arthur Hill, CMT

Arthur Hill, CMT

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INTEREST RATES AND STOCK PRICES

INTEREST RATES AND STOCK PRICES

Editor’s note: Stan Lipstadt, Vice President of the MTA in 1976-1977, and Vice President for seminars for the MTA on multiple occasions between 1978 and 1983, died on October 30, 2013 at the age of 72. Stan was the president and CEO of PSM Investors Inc., an investment advisory firm he founded in 1976. He first worked as securities analyst and economist at First National Bank of Chicago from 1967 to 1969. He also worked as a securities analyst with Keystone Custodian Funds from 1969 to 1972 and as an assistant vice president at Endowment Management & Research Corp. from 1972 through 1979. The most important factor in Lipstadt’s model was the tracking of daily points up, points down, volume up and volume down, numbers collected from the Lowry Report Service, West Palm Beach, FL. Buy and sell rules were based on long-term moving averages and the system averaged three to four

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)

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LONG-TERM ELLIOT WAVE ANALYSIS OF GOLD

LONG-TERM ELLIOT WAVE ANALYSIS OF GOLD

Editor’s note: This article is presented as an example of a comprehensive approach to Elliott Wave analysis. Main Wave Count. Monthly Chart My main monthly wave count expects that a grand super cycle wave completed at 1,921.15, and a grand super cycle correction began there.  Within the correction the first five down is incomplete. The parallel channel drawn about super cycle wave (V) is clearly breached by downward movement indicating this wave is over, and the next wave is underway. This is my main wave count because this fifth wave fits so nicely within its channel, and the channel is breached. Ratios within super cycle wave (V) are: cycle wave (III) has no Fibonacci ratio to cycle wave (I), and cycle wave (V) is 21.44 short of 1.618 the length of cycle wave (III). Ratios within cycle wave (III) are: primary wave 3 has no Fibonacci ratio to primary wave 1, and primary wave 5

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)

Lara Iriarte, CMT

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A FORECAST FOR THE NIFTY

A FORECAST FOR THE NIFTY

The Nifty is a benchmark index for the stock market in India. This index, along with many other global markets, reached a top in January 2008 at a high of 6357.10. On a closing basis, the Nifty made an all-time high in December 2007 when it closed at 6138.60 The bear market that followed found a low at 2252.75 in October 2008.  After reaching its bottom, the Nifty consolidated for a period of four months until February 2009. The rally that began in March 2009 pushed the index back to its previous high, reaching 6338.50 in November 2010 forming a double top pattern. Double tops are a trend reversal signal. A correction followed the double top and the Nifty pull backed to a low of 4531.15 in December 2011. This was a higher low than the previous low set in October 2008. The Nifty has been confined to a trading range pattern since

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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)

Purab Shah

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CHART OF THE MONTH

CHART OF THE MONTH

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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