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Technically Speaking, July, 2005

Technology Update

Right now my brain feels a little like it is made of mayonnaise. With Shelley Lebeck retiring, Marie moving into her role, Tom MacMahon’s position being eliminated (they have given their full cooperation to this effort) and two new people joining us soon, (one of them starts Tuesday) your MTA staff has been giving the full court press to our technology changeover.  The new technology platform will make it possible to serve the membership better and to know the history of member activity completely. With 149 pages of standard reports and the ability to track every contact from the membership and from prospects, this new tool will provide far more opportunities to the membership and facilitate MTA future growth on a world-wide basis. It will make the MTA a more virtual organization than we ever thought possible. However, no transition is ever as simple or straight forward as one would like it to be. Everything happens at once. With staff changes happening, it makes sense for current staff to have input for the history and for new staff to be trained

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What's Inside...

Summer Movement

by Jordan Kotick, CMT

While the summer may suggest a slowdown in many areas of our business, this does not include the MTA. Last month I mentioned two Board members leaving, this month I want to welcome Steve Poser and...

The 4-year Cycle In Practice-Major Low Expected In 2006

by Matthias Geissbuhler, CFA

Time is an important but often neglected factor in technical analysis. It’s not only important to determine which way the market will go and by how much it will move but also to examine when this...

Technical Analysis of Foreign Exchange Markets

by William J.P. Dale CIM, DMS, FCSI

The Foreign Exchange (forex) Market is the largest, most liquid market in the world. It is best described as a decentralized, continuous auction place. A unique feature of forex markets is that they...

Relative Strength in the Real World

At the May seminar, Jeff Parent introduces the concept of relative strength and then builds upon that concept to develop a framework for identifying the strongest stocks. In simplest terms, relative...

MTA Welcomes... Tim Licitra

I have recently graduated from the University of Rhode Island with a Bachelor’s degree in Marketing. I entered URI on a Centennial Scholarship and appeared on the Dean’s List. I enjoy following...

Introduction to Technical Analysis

by Ralph Acampora, CMT

Ralph is a founding member of the MTA. At the recent seminar in New York, he presented an overview of the basics of technical analysis. This article summarizes that presentation. The full...

Technical Analysis for Fixed Income

by Rob Kepler, MKP

Beginning with a simple checklist and moving through charts to develop a complete trading model, Kepler left the audience with an understanding of what it takes to succeed in the fixed income...

Newmont Mining (NEM) Bullish Case

by Nicolas Di Carlo, CMT

The stock of Newmont Mining bottomed on May 16th this year and proceeded higher, forming an inverted Head & Shoulder pattern. It has successfully broken above its neckline and come back to test...

Summer Movement

Summer Movement

While the summer may suggest a slowdown in many areas of our business, this does not include the MTA. Last month I mentioned two Board members leaving, this month I want to welcome Steve Poser and Charlie Kirkpatrick to our Board. Both are seasoned veterans of the market and bring a lot of experience and insight to our group. Internally, as I mentioned Saturday night at the MTA Conference in my speech to everyone, John Kirby has been hired back as our Executive Director for the next  year, Shelley Lebeck has retired and we are in the process of going through the chairs of our committees, reassessing our goals and objectives. As you can see, money never sleeps and it would seem, neither does the MTA. On another note, it is likely not much of a surprise with everyone that we have ongoing issues and disputes with IFTA. These issues

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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.

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The 4-year Cycle In Practice-Major Low Expected In 2006

The 4-year Cycle In Practice-Major Low Expected In 2006

Time is an important but often neglected factor in technical analysis. It’s not only important to determine which way the market will go and by how much it will move but also to examine when this will happen. One way to answer the last question is by looking at time cycles.

Cycles are determined by the period and amplitude. The period represents the time that passes between two consecutive wave troughs (bottoms) and is meant to be constant. The amplitude represents the height of the wave. The Principle of Proportionality states that cycles with longer periods (lengths) should have proportionally wider amplitudes. In the world of financial markets a great quantity of cycles exist. In the following notes I will examine the so called “4 year cycle”, or “Presidential Cycle”. The idea behind this cycle is, that government will actively seek to influence the economic cycle in such a way that

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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)

Matthias Geissbuhler, CFA

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Technical Analysis of Foreign Exchange Markets

Technical Analysis of Foreign Exchange Markets

The Foreign Exchange (forex) Market is the largest, most liquid market in the world. It is best described as a decentralized, continuous auction place. A unique feature of forex markets is that they are actually a double auction where all trades are pairs trades involving a simultaneous buy and sell of a currency pair.

Average daily turnover in the forex spot market is $1.9 Trillion, with another $130 Billion traded in the futures markets. The US Dollar is on one side of 89% of all spot transactions, with the Dollar / Euro currency pair accounting for 28% of all transactions. The United Kingdom is the largest trading center, with 39% of transactions originating there. The popularity of these markets is growing, with spot volume up 36% since 2001, and futures volume up 77%.

Many factors affect forex rates, including:

  • Supply and Demand
  • Psychology
  • Interest Rate Differentials
  • Inflation / Commodity Prices
  • Economic Activity / Productivity
  • Balance of Payments 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)

William J.P. Dale CIM, DMS, FCSI

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Relative Strength in the Real World

Relative Strength in the Real World

At the May seminar, Jeff Parent introduces the concept of relative strength and then builds upon that concept to develop a framework for identifying the strongest stocks. In simplest terms, relative strength (RS) compares the change in value of one price against another over the same time frame. In common use, the relative strengths of a stock is compared to the value of all other stocks in the market, and each value is assigned a percentile rank to aid in comparison. This is one of the cornerstones of William O’Neil’s CAN SLIM strategy, and RS rankings are one of the features of Investor’s Business Daily. In this strategy, only stocks with a RS value greater than 80, on a scale of 1 to 99, are considered as candidates for purchase. O’Neil does not disclose how he calculates RS.

James O’Shaughnessy provided quantitative evidence that RS works in What Works on Wall

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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.

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MTA Welcomes... Tim Licitra

MTA Welcomes... Tim Licitra

I have recently graduated from the University of Rhode Island with a Bachelor’s degree in Marketing. I entered URI on a Centennial Scholarship and appeared on the Dean’s List. I enjoy following various sports such as football, baseball, and hockey, and like to keep busy by playing golf, running, watching movies, and reading. I am deeply interested in marketing and am looking forward to my time here with MTA.

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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Introduction to Technical Analysis

Introduction to Technical Analysis

Ralph is a founding member of the MTA. At the recent seminar in New York, he presented an overview of the basics of technical analysis. This article summarizes that presentation. The full presentation can be downloaded from the MTA web site.

The entire study of all aspects of technical analysis is based upon three logical assumptions:

  1. The stock market is a discounter: Price movement precedes the actual event. There is a constant battle between sellers and buyers that quantifies the forces of supply and demand. This results in market activity known as accumulation (when buyers create demand for the limited supply) or distribution (when sellers create an excess supply).
  2. The amount of buying or selling activity over a designated period of time indicates the magnitude of upside or downside potential, a concept referred to as relativity. Major buying (base building) precedes a major advance; a minor top (distribution) foreshadows a minor decline, and vice

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)

Ralph Acampora, CMT

Ralph Acampora, CMT

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Technical Analysis for Fixed Income

Technical Analysis for Fixed Income

Beginning with a simple checklist and moving through charts to develop a complete trading model, Kepler left the audience with an understanding of what it takes to succeed in the fixed income markets. The checklist is deceptively simple:

  • What is the trend? Up, Down, Sideways
    • Chart patterns, trendlines, moving averages, breakouts.
  • How good is the trend?
    • ADX, volume trend, open interest trend
  • What is momentum (market velocity) doing?
    • Confirming price, or diverging? Extended?
  • What is the landscape?
    • Sentiment, flow of funds, COT.
  • Risk Management
    • Where do we enter? Where do we exit? On long-term charts, the trend can usually be spotted without difficulty:

It may also be useful to analyze both price and yield charts. Sometimes a pattern may form earlier or appear better defined in one when compared to the other. At point A in the example below, the yield trendline seen at the bottom of the chart broke one day before

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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)

Rob Kepler, MKP

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Newmont Mining (NEM) Bullish Case

Newmont Mining (NEM) Bullish Case

The stock of Newmont Mining bottomed on May 16th this year and proceeded higher, forming an inverted Head & Shoulder pattern. It has successfully broken above its neckline and come back to test it. Before completing the inverted H&S formation, NEM had already broken above the downtrend line drawn from the March top, tested it and resumed its way higher.

As shown in the bottom clip of Figure 1, the RSI stood up to its reputation of being a leading indicator as it also developed an inverted Head & Shoulders pattern and broke its neckline well in advance of price. The indicator also demonstrated a bullish divergence with the price. At the moment, the RSI is above its rising uptrend line and shows yet no sign of a possible top.

The horizontal lines on the

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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)

Nicolas Di Carlo, CMT

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New Educational Content This Month

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