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Technically Speaking, July 2012

LETTER FROM THE EDITOR

In this month’s issue, we provide summaries of several additional presentations that were made at the Market Technicians Association Annual Symposium in April. We included several summaries in last month’s issue. Speakers included some of the best minds in the technical analysis community and the presentations are filled with actionable ideas. The presentations we’ve summarized over the past two months along with several additional presentations can be viewed online at http://go.mta.org/505. We are always appreciative of your feedback and look forward to hearing your thoughts on Technically Speaking. You can email us at editor@mta.org. Michael Carr

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What's Inside...

TREND FOLLOWING: TRADING FOR EXCEPTIONAL RETURNS

by Michael Carr, CMT & Michael Covel

This is a summary of Michael Covel’s keynote presentation made at the 2012 Annual Symposium on April 19th – 20th, 2012 in New York City. In a nutshell, Michael Covel set out to show that...

EXECUTION OPTIMIZATION USING TECHNICAL ANALYSIS

by Michael Carr, CMT & Greg Bender, CMT & Brian W. Barry, CMT

This is a summary of a presentation by Greg Bender, CMT and Brian Barry, CMT that was part of the 2012 Annual Symposium on April 19th – 20th, 2012 in New York City. Brian spoke about the...

OPTIONS INTELLIGENCE: PUTS AND CALLS AS ANALYTICAL TOOLS

by Michael Carr, CMT & Scott Fullman

This is a summary of by Scott Fullman’s presentation made at the 2012 Annual Symposium on April 19th – 20th, 2012 in New York City. Scott first started teaching at the New York Institute of...

INSIGHTS IN MARKET PROFILE: UNDERSTANDING AND APPLYING THE MARKET PROFILE METHODOLOGY TO TODAY’S MARKETS

by Michael Carr, CMT & Steven B. Hawkins

This is a summary of Steven Hawkins’ presentation made at the 2012 Annual Symposium on April 19th – 20th, 2012 in New York City. Market Profile™ is a hybrid of the statistical bell curve...

SPECIAL THANKS TO THE MTA MEMBERS WHO PARTICIPATED IN THE MTAEF’S SUCCESSFUL SILENT AUCTION

by Phil Roth, CMT

The MTAEF’s silent auction at the MTA’s April 19-20 2012 symposium was very successful. The great venue of Chelsea Piers was a big help. We had plenty of room to display our offerings, and right...

INTERVIEW WITH ANDY GARCIA

by Andy Garcia & Amber Hestla-Barnhart

How would you describe your job? Currently I am a partner at TideTraders. We provide online broadcasts that cover live market commentary as well as educating new and struggling traders. My primary...

A SPECIAL THANK YOU TO THE MTAEF

by MTAEF INTERN MARCELO KIM

My name is Marcelo Kim and I have been an intern for the MTAEF for the past six months. Through the program, I was able to meet and shadow professionals who use technical analysis. I met...

THREE PEAKS AND A DOMED HOUSE BY ED CARLSON, CMT

by Michael Carr, CMT & Ed Carlson

George Lindsay was a well-regarded technical analyst in the 1970’s and 1980’s. He had developed timing models that allowed him to forecast market turns with great accuracy. In the days before...

TREND FOLLOWING: TRADING FOR EXCEPTIONAL RETURNS

TREND FOLLOWING: TRADING FOR EXCEPTIONAL RETURNS

This is a summary of Michael Covel’s keynote presentation made at the 2012 Annual Symposium on April 19th – 20th, 2012 in New York City.

In a nutshell, Michael Covel set out to show that “Surprise events, uncertainty, chaos, and even primal fear might not appear to be the states needed for market success, but they are. Great investing, great trading, great trend following embraces the shock and so should you.”

Michael began his presentation by pointing out that trend following is one component of technical analysis. While there might be many who want to deny that technical analysis works, there is really no denying that trend following and other tools of technical analysis do work based on the data. A long-term chart of almost any major stock market index from around the world, like the Nikkei or the S&P 500, will show that buy-and-hold strategies don’t always work. Many savers have

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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)

Michael Carr, CMT

Michael Carr, CMT

Michael Covel

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EXECUTION OPTIMIZATION USING TECHNICAL ANALYSIS

EXECUTION OPTIMIZATION USING TECHNICAL ANALYSIS

This is a summary of a presentation by Greg Bender, CMT and Brian Barry, CMT that was part of the 2012 Annual Symposium on April 19th – 20th, 2012 in New York City.

Brian spoke about the applications of technical analysis in algorithmic equity trading. Greg discussed ways to analyze market sentiment using the VIX, new implied volatility benchmarks and tradable products.

Brian began the presentation with an overview of the increasingly complex decision process that traders face. At the macro level, traders must decide what and when to trade. They must then decide how to trade, a decision that requires traders to select an execution algorithm.

Some traders use scheduled algorithms, which include VWAP (volume weighted average price) and TWAP (time weighted average price). VWAP is defined as the ratio of the value traded (price * volume) to total volume traded over a particular time frame, and is usually defined for one

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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)

Michael Carr, CMT

Michael Carr, CMT

Greg Bender, CMT

Brian W. Barry, CMT

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OPTIONS INTELLIGENCE: PUTS AND CALLS AS ANALYTICAL TOOLS

OPTIONS INTELLIGENCE: PUTS AND CALLS AS ANALYTICAL TOOLS

This is a summary of by Scott Fullman’s presentation made at the 2012 Annual Symposium on April 19th – 20th, 2012 in New York City.

Scott first started teaching at the New York Institute of Finance in 1989 where he met Ralph Acampora, CMT. While spending time with Ralph, Scott realized that options are a time sensitive product and that technical analysis is a valuable tool for timing. He used these insights to focus on how to use options.

Exchange traded options have a history dating back to 1973 and have enjoyed incredible growth over that time as the chart below shows.

Options are the fasted growing exchange traded products in the industry.  There are now options available on nearly 4,000 stocks. Some of this increase in market activity is because of advances in

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 Carr, CMT

Michael Carr, CMT

Scott Fullman

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INSIGHTS IN MARKET PROFILE: UNDERSTANDING AND APPLYING THE MARKET PROFILE METHODOLOGY TO TODAY’S MARKETS

INSIGHTS IN MARKET PROFILE: UNDERSTANDING AND APPLYING THE MARKET PROFILE METHODOLOGY TO TODAY’S MARKETS

This is a summary of Steven Hawkins’ presentation made at the 2012 Annual Symposium on April 19th – 20th, 2012 in New York City.

Market Profile™ is a hybrid of the statistical bell curve that presents a unique view of the price activity in a market. This tool was jointly developed by renowned trader, software developer and author J. Peter Steidlmayer and the Chicago Board of Trade. Over the years this unique tool has helped traders gain unparalleled understanding of markets and allowed traders to identify profitable trading opportunities. The trading tool is often described as “simple in concept yet complex in detail.” Market Profile™ charts organize a number of elements into an easily understood graphic form. This makes it possible to spot trading opportunities that other methodologies may miss.

In general, the technique starts with the concept that trades follow a standard distribution that is turned on its side.

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 Carr, CMT

Michael Carr, CMT

Steven B. Hawkins

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SPECIAL THANKS TO THE MTA MEMBERS WHO PARTICIPATED IN THE MTAEF’S SUCCESSFUL SILENT AUCTION

SPECIAL THANKS TO THE MTA MEMBERS WHO PARTICIPATED IN THE MTAEF’S SUCCESSFUL SILENT AUCTION

The MTAEF’s silent auction at the MTA’s April 19-20 2012 symposium was very successful. The great venue of Chelsea Piers was a big help. We had plenty of room to display our offerings, and right alongside the refreshment tables made it easily accessible for the symposium participants. As a result, we sold virtually everything.

Among the items sold were four stock certificates, a half dozen books, some charting packages, a couple of bottles of unusual wines, and a test drive of the hot Audi A8. This was the first time we had a fund raiser at an MTA activity; we will make it a regular event.

The MTAEF Board thanks everyone who participated for their generosity.  Remember, much of your donation will be tax deductible. Our plans are to use the proceeds to fund student scholarships for the CMT program. We were able to

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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)

Philip J. Roth, CMT

Phil Roth, CMT

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INTERVIEW WITH ANDY GARCIA

INTERVIEW WITH ANDY GARCIA

How would you describe your job?

Currently I am a partner at TideTraders. We provide online broadcasts that cover live market commentary as well as educating new and struggling traders. My primary focus is helping others develop chart literacy. So, in a nutshell, I teach others how to trade and use technical analysis. I am in charge of the Forex division of the website. I give analysis and market commentary about the major currencies as well as a more in depth market commentary each weekend. In addition I help run the website.

What led you to look at Forex instead of stocks or another tradable?

I primarily trade the Forex market, but got my start in the futures market.  My very first trade in college was in the soybeans market. I had no clue what I was doing. Looking back it was not a wise idea, but the experience was worth its weight

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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)

Andy Garcia

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A SPECIAL THANK YOU TO THE MTAEF

A SPECIAL THANK YOU TO THE MTAEF

My name is Marcelo Kim and I have been an intern for the MTAEF for the past six months. Through the program, I was able to meet and shadow professionals who use technical analysis. I met professionals in different areas of finance who all used technical analysis in one way or another. This internship was very helpful to me, especially since neither my family nor friends have careers in the financial markets, so my experience prior college and joining the MTA was very limited.

At first, I was not sure what to expect from this internship but I am glad I applied for it. From my education I have an understanding of charts, patterns and indicators, but I have not had the experience to see how professionals are utilizing these tools in their day-to-day jobs. Being given the opportunity to participate in this internship, I was able to witness the use

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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THREE PEAKS AND A DOMED HOUSE BY ED CARLSON, CMT

THREE PEAKS AND A DOMED HOUSE BY ED CARLSON, CMT

George Lindsay was a well-regarded technical analyst in the 1970’s and 1980’s. He had developed timing models that allowed him to forecast market turns with great accuracy. In the days before CNBC, Wall Street Week with Louis Rukeyser was a weekly television show on PBS that brought the financial markets into the homes of individual investors.

Rukeyser was a pleasant host who challenged his guests when necessary. In the case of Lindsey, Rukeyser delivered praise for his work and called him “uncannily accurate”. The Stock Traders Almanac called his work “the finest long-term forecast we have ever seen.”

Despite precisely forecasting the start of the long bull that started in 1982, Lindsay’s work was largely forgotten after his death until Ed Carlson researched Lindsay’s life and work and presented the details in his book, “George Lindsay and the Art of Technical Analysis.” That book

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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)

Michael Carr, CMT

Michael Carr, CMT

Ed Carlson

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New Educational Content This Month

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