
LETTER FROM THE EDITOR
At the Annual Symposium in March, Jason DeSena Trennert explained why he was bullish. He summed it up as “TINA” or “there is no alternative.” Months later, his presentation is just as timely. Large investors running pension funds or insurance companies understand stocks are expensive but they are faced with the reality that there is no alternative. This month’s newsletter includes a summary of that presentation and demonstrates the value of the Symposium. Presentations like Jason’s are both timely and timeless. As your schedule permits, I urge you to remember that videos of this year’s presentations and the previous four years are available at http://symposium.mta.org/ and can be viewed at anytime. Dr. Bryan Taylor also presents timely and timeless information. Using data going back nearly 200 years, Bryan demonstrates history is repeating in Greece. The fact that history repeats is one of the basic precepts of technical analysis. We can be certain history will repeat in the future which is why technical analysis will continue to add value to the investment decision
process. This value is being demonstrated by academic research as we explain in this issue. We also explain how the value of technical analysis is driving changes in the careers of technicians and these changes resulted in an update to the CMT program. As always, we welcome your feedback. Please let us know what you think of Technically Speaking, the MTA magazine, by emailing us at editor@mta.org.
Sincerely,
Michael Carr
What's Inside...
TINA GOES GLOBAL BY JASON DESENA TRENNERT
by Jason DeSena Trennert & Michael Carr, CMTJason DeSena Trennert is the Managing Partner and Chief Investment Strategist of Strategas Research Partners LLC and the Chairman and Chief Executive Officer of the firm’s broker-dealer subsidiary,...
IN MEMORIAM: NELSON FREEBURG
Nelson Fraser Freeburg, Jr., 63, died suddenly on June 27, 2015 while on business in New York City. Nelson Freeburg was the editor of Formula Research, a newsletter that develops systematic timing...
DÉJÀ VU AGAIN AND AGAIN: WHEN MORAL HAZARD MEETS A SERIAL DEFAULTER
by Dr. Bryan TaylorThe saga of the European Default continues with Greece playing the starring role. If this were a play, the audience would be shouting at the director “will this show ever end?” All kidding aside,...
THE CMT PROGRAM TODAY: WHY THE PROGRAM HAS CHANGED AND HOW YOU WILL BENEFIT
Editor’s note: Gordon Scott, CMT, Managing Director of the CMT Program, recently offered an information session discussing changes to the CMT program. The full presentation can be viewed here. This...
INTERVIEW WITH LESLIE JOUFLAS, CMT
by Amber Hestla-BarnhartHow would you describe your job? It’s like putting together jigsaw puzzle pieces. A lot of research and preparation for each day. It always feels like detective work to me. Markets always seem...
INTRODUCTION TO RELATIVE ROTATION GRAPHS
by Julius de KempenaerEditor’s note: these introductory articles were originally published at RelativeRotationGraphs.com and are reprinted here with permission. BACKGROUND OF RRGS Relative Rotation Graphs slowly came to...
THE MAGIC OF 150 MONTHS
by Tom McClellanEditor’s note: this article was originally published as a Chart in Focus by McClellan Financial Publications. It is reprinted here with permission. In a recent article featured in our twice...
CHARLES H. DOW AWARD 2001 WINNER: SIGN OF THE BEAR
by Peter EliadesEditor’s note: the work of Peter Eliades is referenced by Tom McClellan in the previous article. An extract of Peter’s Dow Award winning paper is presented below. To read the full paper, please...
HOW CAN I BECOME AN INVESTMENT MANAGER?
Editor’s note: many members seek answers to difficult career questions. Of course there are no easy answers for anything related to jobs in the current market but the MTA would like to offer some...
RISK-ADJUSTED PROFITS OF TRADING SYSTEMS: SHARPE VS. SORTINO
by Giorgos Siligardos, Ph.D.Editor’s note: This article was originally published by Intalus at their educational blog. The code for implementing this strategy in Tradesignal is available by clicking here. Choosing the right...
RESEARCH UPDATE: A NEW ANOMALY: THE CROSS-SECTIONAL PROFITABILITY OF TECHNICAL ANALYSIS
Editor’s note: in recent years, technical analysis has been a popular research topic. In this paper, the authors found that technical analysis can be used to generate profits in the markets. Among...
ETHICS CORNER: DUTY TO CLIENTS AND EMPLOYERS
The MTA recently licensed the CFA Institute Standards of Practice Handbook. This license allows MTA members to access the detailed standards developed by the CFA Institute over many years. The...
CHART OF THE MONTH
Relative Rotation Graphs (RRGs) can be applied in any timeframe and are a versatile trading tool. RRGs can be used to scan on a universe to show those that change quadrants, or have changed...
Jason DeSena Trennert is the Managing Partner and Chief Investment Strategist of Strategas Research Partners LLC and the Chairman and Chief Executive Officer of the firm’s broker-dealer subsidiary, Strategas Securities, LLC. He provided an economist’s view of the markets at the MTA Annual Symposium and that view includes a number of insights that are useful to technical analysts. The complete presentation is available at the MTA’s Knowledge Base, the web’s free repository for everything related to technical analysis. In March, Jason noted, “As the 2015 trading session grinds ahead, many investors are considering how changes in the global market environment will impact their investments and strategy. The collapse of energy prices, Greece’s impact on Euromarkets, U.S. interest rate speculation and slowing growth in China are just a few important macro trends that will impact asset allocation and alpha generation in the year ahead.” His presentation provided a top down approach to
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Contributor(s)

Jason DeSena Trennert
Jason DeSena Trennert is the Managing Partner and Chief Investment Strategist of Strategas Research Partners LLC and the Chairman and Chief Executive Officer of the firm’s broker-dealer subsidiary, Strategas Securities, LLC. In 2006, Mr. Trennert co-founded Strategas, which...

Michael Carr, CMT
Mike Carr, who holds a Chartered Market Technician (CMT) designation, is a full-time trader and contributing editor for Banyan Hill Publishing, a leading investment newsletter service. He is an instructor at the New York Institute of Finance and a contributor to various...
Nelson Fraser Freeburg, Jr., 63, died suddenly on June 27, 2015 while on business in New York City. Nelson Freeburg was the editor of Formula Research, a newsletter that develops systematic timing models for the stock, bond, and commodity markets, and serves investors and traders in 27 countries since 1991. He was also a research consultant working with institutional money managers to design proprietary timing models. Nelson had been an active trader since 1980 and occasionally spoke about his work to audiences around the world. He frequently spoke to MTA Chapters and his work is familiar to many members. He was born in Memphis on December 13, 1951, the first of four children of Helen Hull and Nelson F. Freeburg. He graduated from Memphis University School and then Lawrence University in Appleton, Wisconsin from which he earned a degree in philosophy. He then went on to obtain a Master of International Relations from
To view this content you must be an active member of the CMT Association.
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The saga of the European Default continues with Greece playing the starring role. If this were a play, the audience would be shouting at the director “will this show ever end?” All kidding aside, the Greek debacle is no small affair and has been making consistent headlines for more than two years. In fact, Greece has one of the worst track records of any country in Europe when it comes to default. Between 1826 and 1964, Greece was in default for 90 of those 138 years, so it should come as no surprise that Greece will most likely become the first Euro member to default. In the good old days, countries defaulted first and came to an agreement with creditors later. Unfortunately, this is not the case as the European Union acts like a nurse maid trying to protect all its countries or groups from being hurt by a default. So
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Contributor(s)

Dr. Bryan Taylor
Dr. Bryan Taylor President & Chief Economist, Global Financial Data Dr. Bryan Taylor serves as President and Chief Economist for Global Financial Data. He received his B.A. from Rhodes College, his M.A. from the University of South Carolina in International Relations,...
Editor’s note: Gordon Scott, CMT, Managing Director of the CMT Program, recently offered an information session discussing changes to the CMT program. The full presentation can be viewed here. This summary is provided as an effort to increase awareness of members about the changes. The Chartered Market Technician program has been evolving since the beginning. Among the most visible changes in recent years was the decision to change the requirement for a paper to complete the Level III requirements. That change was met with skepticism but in hindsight we know that change helped to improve the program. With a paper, CMT candidates demonstrated detailed knowledge on a single aspect of technical analysis. With the test, CMT candidates are now required to have in-depth knowledge related to a number of topics. Beginning with the next test administration in October, there are more changes to the curriculum. These most recent changes are simply the
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How would you describe your job? It’s like putting together jigsaw puzzle pieces. A lot of research and preparation for each day. It always feels like detective work to me. Markets always seem to leave “footprints” before they move, and I love to look for those signs, especially using patterns that can be early indications of a turning point and direction. What led you to look at the particular markets you specialize in? Mostly efficiency and knowing my own limitations. I have always done best with focusing on a few markets and not having a lot of open positions. For example trading an index versus individual stocks offers an opportunity to analyze one index instead of scanning through many stocks for a trading opportunity. If I am trading grains, then I will look for the clearest patterns that I use to determine which market to trade. Do you look at any fundamental or economic
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Contributor(s)

Amber Hestla-Barnhart
Bio coming
Editor’s note: these introductory articles were originally published at RelativeRotationGraphs.com and are reprinted here with permission. BACKGROUND OF RRGS Relative Rotation Graphs slowly came to life while I was working as a sell-side technical analyst for an investment bank in Amsterdam. My job as an analyst (sell-side) was to cover European equities and equity sectors from a technical perspective and provide the clients of the bank with a technical “view” and generates trade ideas on the basis of that “view.” Ultimately the bank would only generate money when the clients would actually put their orders through us and we could earn a commission on the execution of the trade. As only writing up your view in a report or an email and send it off was not enough to do the trick, every analyst had to communicate his/her view and ideas to the clients by presenting them. Sometimes this meant visiting clients in person
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Contributor(s)

Julius de Kempenaer
Julius de Kempenaer, Founder & Director, RRG Research & Sr. Technical Analyst at Stockcharts.com Julius de Kempenaer is the creator of Relative Rotation Graphs®, which have been available on Bloomberg since January 2011 under the mnemonic RRG<GO>. He is the...
Editor’s note: this article was originally published as a Chart in Focus by McClellan Financial Publications. It is reprinted here with permission. In a recent article featured in our twice monthly McClellan Market Report newsletter, we featured the chart shown this week. It was inspired by some work done recently by famed technical analyst Peter Eliades, who has been a newsletter writer for many years and is the proprietor ofwww.stockmarketcycles.com. The basic point is that a period of 150 months (12.5 years) shows up in lots of places as the time distance between several important turning points for stock prices. The price data in the chart this week is the log value of the monthly close of the DJIA. Using log scaling allows us to better see the turning points without the effect of arithmetic scaling interfering with the view. Readers should understand that this is not meant to show a 150-month cycle
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Contributor(s)

Tom McClellan
Tom McClellan has been editor of The McClellan Market Report since 1995, and is ranked as the #2 Stock Market Timer for 2016 according to Timer Digest. He is the son of Sherman and Marian McClellan, who in 1969 created the McClellan Oscillator and Summation Index. Tom was...
Editor’s note: the work of Peter Eliades is referenced by Tom McClellan in the previous article. An extract of Peter’s Dow Award winning paper is presented below. To read the full paper, please click here. From my own research, I have learned that serendipity, the aptitude for making desirable discoveries by accident, can play a big part in making meaningful technical discoveries. One of the fantasies that every serious stock market technician has probably entertained is that there must be some kind of indicator that will signal us when a major market top is being formed. There are some effective indicators for identifying market bottoms, but because market tops tend to be more diffuse, often occurring at different times for different indexes, the search for an effective tool to identify major market tops has been, for the most part, a futile one. In November 1992, I was struck by the apparent lack
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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)

Peter Eliades
Peter Eliades is the President of StockMarket Cycles, a financial advisory entity that published a periodic market newsletter from 1975 until 2015. In 2001, Peter was honored by the CMT Association with the prestigious Charles Dow Award for excellence and...
Editor’s note: many members seek answers to difficult career questions. Of course there are no easy answers for anything related to jobs in the current market but the MTA would like to offer some insights into different career strategies. Please send career questions to editor@mta.org and we will work with industry experts to find answers. The MTA is a group of established professionals and professionals seeking new career opportunities. There are unlimited opportunities in the financial industry but the position of money manager or investment manager is often cited as a career objective. This job itself consists of many different opportunities. Investment managers can serve individual clients under a Registered Investment Adviser (RIA) structure. Managers might work for firms managing assets under a mutual fund or hedge fund structure. There are many other ways a member could find themselves managing money. Just as there is no single job description for an investment
To view this content you must be an active member of the CMT Association.
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Editor’s note: This article was originally published by Intalus at their educational blog. The code for implementing this strategy in Tradesignal is available by clicking here. Choosing the right Reward/Risk metric for your strategies. Performance in terms of raw profit does not reveal all the aspects of a trading system and it is certainly not the best way to appraise it. The risk of the underlying strategy has to be regarded too. A very popular gauge, which describes the relation between return and risk is the Sharpe Ratio. This Trading Tip first describes the Sharpe Ratio and its drawbacks. Subsequently the Sortino Ratio is presented. Last but not least you will learn which of the two common gauges best reflects the system’s reward/risk. THE SHARPE RATIO Originated in 1966 by William F. Sharpe as a performance gauge for mutual funds the Sharpe Ratio is nowadays the industry standard for the evaluation and optimization of
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)

Giorgos Siligardos, Ph.D.
Giorgos Siligardos holds a PhD in Mathematics and a Market Maker certificate on derivatives from the Athens Exchange. He is a financial software developer and coauthor of academic books on finance. Giorgos has also been a research and teaching fellow to the University of Crete...
Editor’s note: in recent years, technical analysis has been a popular research topic. In this paper, the authors found that technical analysis can be used to generate profits in the markets. Among the papers published recently is A New Anomaly: The Cross-Sectional Profitability of Technical Analysis by Yufeng Han, Ke Yang and Goufu Zhou. The full paper is available at SSRN or by clicking here. Abstract: In this paper, we document that an application of a moving average timing strategy of technical analysis to portfolios sorted by volatility generates investment timing portfolios that often outperform the buy-and-hold strategy substantially. For high volatility portfolios, the abnormal returns, relative to the CAPM and the Fama-French three-factor models, are of great economic significance, and are greater than those from the well known momentum strategy. Although both the moving average timing and momentum strategies are trend-following strategies, their performances are surprisingly uncorrelated and behave differently
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The MTA recently licensed the CFA Institute Standards of Practice Handbook. This license allows MTA members to access the detailed standards developed by the CFA Institute over many years. The Handbook could serve as a guide to best practices for finance professionals. As an example, under the Standards of Professional Conduct, members owe certain duties to clients. These duties include: Loyalty, prudence, and care Fair dealing Suitability Fair accurate, and complete performance presentation Preservation of confidentiality The Standards of Practice Handbook provides additional details on the meaning of these duties, case studies to assist in understanding and studying the standards and examples that clarify how to implement the standards on the job. Members also owe certain duties to employers. These duties include: Loyalty Disclosure of additional compensation arrangements and the avoidance of a conflict of interest under any additional compensation agreement A responsibility to make reasonable efforts to detect and prevent violations of laws, regulations and ethical standards by anyone under
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Relative Rotation Graphs (RRGs) can be applied in any timeframe and are a versatile trading tool. RRGs can be used to scan on a universe to show those that change quadrants, or have changed direction. The chart below shows the S&P1500 companies that crossed or are about to cross into the Leading quadrant on a weekly basis. This chart was created on Monday, June 29, after global markets fell sharply in reaction to news about Greece. The next chart shows Russell 2000 companies more than 3 standard deviations away from the benchmark using daily data. This chart demonstrates how RRGs can be combined with price-based indicators to visually present information from scans. RRGs can also be applied to other market. The last chart uses intraday, 60-minute data on Forex markets with the US Dollar as the benchmark. To learn more about RRG, you can watch the free education video at Market Analyst by
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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.
New Educational Content This Month
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September 13, 2023
Charting and Analysis in Today’s Equity Markets
Presenter(s): Anthony F. Esposito, CMT
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September 6, 2023
Market Trend Analysis
Presenter(s): Stephen W. Bigalow
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August 30, 2023
Two New Oscillators – Volume Zone and Price Zone
Presenter(s): David Steckler