public

Technically Speaking, July 2017

MTA becomes CMT ASSOCIATION

Beginning July 15th, after nearly 50 years of service to the financial industry, the Market Technicians Association is becoming the CMT Association and updating the organization’s brand. As members of the organization, we cannot thank you for creating this remarkable home for the advancement of technical analysis. Committed volunteers and engaged participants are the reason our discipline has the professional respect we enjoy today. As we strive to uphold the vision of our founders while adapting to the rapidly changing industry, we hope that you will help us extend the reach of the organization by sharing this news with your colleagues, clients, and professional contacts.

The Association’s leadership including Board Members, founding members, and senior staff, recommended that members approve changing our organization’s name. Having carefully considered all implications of the legal name change, the leadership felt that it is imperative to rationalize the number of acronyms out in the industry. Pending approval by a vote of the Membership, you’ll see the new look and name anywhere we’re out in public, like our website, publications, digital webcasts, LinkedIn, Facebook and Twitter. Very soon you’ll see new signage and materials at your local chapters, as well. The new brand name better matches what we’ve become since the early 1970s: the preeminent global designation for financial professionals committed to advancing the discipline of technical analysis.

When our association began, we operated for years without a credentialing body, exam process, or charter. Since our legal incorporation in 1973, we’ve stuck with the Market Technicians Association. Although we slightly altered our colors in late 2015 as we built out the new website, we did not consolidate our two acronyms – MTA and CMT. Today, the CMT Program is central to the value of the Association as well as the professional identity of nearly all Members. The new name reflects our continued commitment to our global members and unique capacity to advance the discipline of technical analysis among industry professionals. Aligning with best practice allows us to consolidate the MTA and CMT acronyms for renewed clarity and notoriety of our CMT charterholders worldwide. Other than these visible changes, the association will continue to operate in its current structure with no change in staff or volunteer leadership. Your contacts for all ongoing projects and initiatives will remain unchanged. Furthermore, the mission and goals of the association remain unchanged. The CMT Association will continue to be a place for collegial discourse and exchange of ideas amongst like-minded professionals. Whether you are a charterholder or not, your Membership status will not change.

Our brand goal was to align with industry best practice. In our field, the notable organizations are all designation-centric (CFA Institute, CFP Board, CAIA Association, etc..) We also aimed to reduce confusion in the marketplace around our multiple acronyms; better matching our name to our core value proposition and the users we serve. A small team of staff and volunteers worked with professional designers to find something that appeared crisp, approachable, professional, modern, and connected.

The “M” of the logo creatively represents a barchart, but it’s stylized and emphasized through color to connote the importance of Markets within our name. The study of price  behavior is about markets in comparison to the study of fundamentals and the assessment of companies. Our decision to use the acronym in the logo was inspired by the diversity of our members. A “CMT” is a portfolio manager, a research analyst, a financial advisor, an asset allocator, a quantitative trading system developer, and many more things – but always a professional committed to advancing the discipline of technical analysis and upholding the highest ethical standards in the industry.

We hope you like this new look for the CMT Association! Look out for more updates and a broader industry presence as we continually try to better serve our members with the preeminent global designation and highest member value in all our programming and initiatives.

What's Inside...

NORTHERN CALIFORNIA MTA CHAPTER MEETING - JUNE 22, 2017, SAN FRANCISCO, CA

Steven Moffitt, PhD presented to an enthusiastic crowd during the meeting of the Northern California MTA chapter at the Le Meridien Hotel located in the heart of the San Francisco financial...

BUYING OUTPERFORMERS IS TOO LATE

by Mathew Verdouw, CMT, CFTe

Editor’s note: this paper was originally published in the Research section at Optuma.com. ABSTRACT: We are told two rules in finance: “buy low and sell high” and also “past performance is not...

THINK & TRADE LIKE A CHAMPION: THE SECRETS, RULES & BLUNT TRUTHS OF A STOCK MARKET WIZARD

by Mark Minervini & Michael Carr, CMT

“I have always said that trading triggers the same neurological impulses as going into the jungle unarmed and having a tiger rush out at you! The same adrenaline rush, the same pressure, elevated...

“MAYDAY!” CALL FOR EUR/USD?

by Howard Friend, CMT

Editor’s note: this analysis was originally prepared on May 1, 2017. Students of market price action, commonly known as market ‘technicians’ or sometimes more confusingly ‘technical...

EASY AND SUCCESSFUL MACROECONOMIC TIMING

by William Rafter

Editor’s note: This paper was originally published at MathInvest.com and is reprinted with permission. Abstract: When the economy takes a turn for the worse, employment declines, right? Well, not...

THE DIFFERENCE BETWEEN STATISTICS AND STRATEGY

by Charlie Bilello, CMT

Editor’s note: this article was originally published in the Pension Partners blog on June 1, 2017 and is reprinted with permission. Statement 1: the average year has between 3 and 4 corrections...

CHART OF THE MONTH

For additional perspective on the average drawdown the following chart is reposted from Pension Partners June Market Webinar. To sign up for Pension Partners’ free newsletter, click...

NORTHERN CALIFORNIA MTA CHAPTER MEETING - JUNE 22, 2017, SAN FRANCISCO, CA

NORTHERN CALIFORNIA MTA CHAPTER MEETING - JUNE 22, 2017, SAN FRANCISCO, CA

Steven Moffitt, PhD presented to an enthusiastic crowd during the meeting of the Northern California MTA chapter at the Le Meridien Hotel located in the heart of the San Francisco financial district. The meeting began when co-chair of the local chapter, Rick Leonhardt, CMT, provided an update about the MTA along with the recent changes and current growth of the CMT program. After this overview, another one of the chapter’s co-chairs, Rick Lehman, gave an introduction and bio of the event’s speaker. Steven D. Moffitt holds a Ph.D. in Statistics, an MA in Mathematics and is currently an Adjunct Professor of Finance in the Stuart School of Business at the Illinois Institute of Technology. He has assisted in the development of an index arbitrage system for one of the largest index arbitrageurs in the United States, developed and tested risk management systems for the largest options clearing firm and for 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.

Back to top
BUYING OUTPERFORMERS IS TOO LATE

BUYING OUTPERFORMERS IS TOO LATE

Editor’s note: this paper was originally published in the Research section at Optuma.com. ABSTRACT: We are told two rules in finance: “buy low and sell high” and also “past performance is not a guarantee of future returns”. Yet many advisers and investors will recommend the best performing securities based on that very assumption. This paper will show that to maximize returns, there has to be a different way to examine when a security should be bought. We do this by using the Relative Rotation Graphs (RRG) to test if absolute returns can be improved by responding the relative trend performance on the RRG charts. The paper will also explain the basic concepts behind the RRG and give the results from many tests. INTRODUCTION It’s a commonly used adage that investors should buy low and sell high. Everyone who is interested in the capital appreciation of their investments is trying to live by that

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)

Mathew Verdouw

Mathew Verdouw, CMT, CFTe

Back to top
THINK & TRADE LIKE A CHAMPION: THE SECRETS, RULES & BLUNT TRUTHS OF A STOCK MARKET WIZARD

THINK & TRADE LIKE A CHAMPION: THE SECRETS, RULES & BLUNT TRUTHS OF A STOCK MARKET WIZARD

“I have always said that trading triggers the same neurological impulses as going into the jungle unarmed and having a tiger rush out at you! The same adrenaline rush, the same pressure, elevated heart rate, difficulty thinking clearly, etc. That makes the panic even worse, and often at the exact wrong moment. How can a trader manage such a situation and help minimize the emotional hijacking that takes place under stressful trading scenarios?” That question is at the end of the book and it is completely answered in the pages of this book. This is truly one of the rare books about trading that offers something new. Mark Minervini has been a trader for nearly 30 years. He is featured in Jack Schwager’s Stock Market Wizards; Conversations with America’s Top Stock Traders. Schwager is an expert on traders and is not easily impressed. He wrote, “Minervini’s performance has been nothing short 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)

Mark Minervini

Michael Carr, CMT

Michael Carr, CMT

Back to top
“MAYDAY!” CALL FOR EUR/USD?

“MAYDAY!” CALL FOR EUR/USD?

Editor’s note: this analysis was originally prepared on May 1, 2017. Students of market price action, commonly known as market ‘technicians’ or sometimes more confusingly ‘technical analysts’, often find themselves by the very nature of their discipline pouring over historical price charts in a detective-like manner looking for clues as to future market direction. Technical theory has it that financial markets tend to move in trends and that those trends can often persist long enough for the technically-based trader to make profit from accurate market timing. One of the most important tools a technician has at his or her disposal are so called ‘support’ and ‘resistance’ levels. These are inflection points on the price charts where after an advance the price starts to fall leaving behind a high watermark or ‘resistance’ level while a support level is the same thing but in reverse with regards to a market decline. A rising trend

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)

Howard Friend, CMT

Howard Friend, CMT

Back to top
EASY AND SUCCESSFUL MACROECONOMIC TIMING

EASY AND SUCCESSFUL MACROECONOMIC TIMING

Editor’s note: This paper was originally published at MathInvest.com and is reprinted with permission. Abstract: When the economy takes a turn for the worse, employment declines, right? Well, not all employment. Certainly, full-time employment declines during recessions, but concurrently part-time employment rises strongly during economic downturns. An adept fiduciary can contrast the two types of employment, as well as a variety of other data, and get good broad-brush investment timing decisions before an official determination of a Recession. Using the described method enables an investor to seriously reduce drawdowns and greatly improve the reward-to-risk ratio. This works well as a stand-alone improvement to Buy & Hold or as an initial screen prior to other fundamental or technical analysis. Decisions can be made monthly, weekly or even daily for those willing to do a bit more work. What are the implications of recessions on investments? A good rule for investment success is to avoid

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 Rafter

Back to top
THE DIFFERENCE BETWEEN STATISTICS AND STRATEGY

THE DIFFERENCE BETWEEN STATISTICS AND STRATEGY

Editor’s note: this article was originally published in the Pension Partners blog on June 1, 2017 and is reprinted with permission. Statement 1: the average year has between 3 and 4 corrections greater than 5%. Statement 2: every year has between 3 and 4 corrections greater than 5%. Statement 1 is a true statistic regarding the S&P 500 going back to 1928. It can serve as a helpful reminder that there is no reward without risk and that equity securities are inherently volatile (the current period notwithstanding). Corrections happen, even in good markets. Problems start to arise when investors assume that because Statement 1 is true that Statement 2 must be true as well. Markets, unfortunately, don’t operate that way. The actual environment rarely looks like the average environment. Since March 2009, there have been 21 corrections greater than 5%, but they were not evenly distributed. In 2009 and 2010, we saw 4. In 2013

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)

Charlie Bilello, CMT

Charlie Bilello, CMT

Back to top
CHART OF THE MONTH

CHART OF THE MONTH

For additional perspective on the average drawdown the following chart is reposted from Pension Partners June Market Webinar. To sign up for Pension Partners’ free newsletter, click here.

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.

Back to top

New Educational Content This Month

Back to top