Letter from the Editor
This month, we are simply highlighting the success of technical analysis. The MTA remains at the forefront of the field and its general acceptance throughout the investment community. In this issue, the success of another regional seminar is detailed. These one-day seminars play host to over 200 attendees and will undoubtedly continue to be well-attended wherever they are held.
We also feature an article highlighting the technical analysis of noted analysts Jeremy Grantham and David Rosenberg. While Grantham may not admit to being a technician, his work is easily recognized to members of the MTA as technical analysis. Rosenberg has a large audience and frequently offers technical analysis, helping to increase the acceptance of technical analysis among institutional investors.
It seems obvious now that the widespread acceptance of technical analysis in the investment community took a giant step forward when the CMT exam process was introduced. Two articles detail parts of that process: Lance McDonald describes studying and Brad Herndon describes grading.
Academia frequently looks at technical concepts and uses different terms to describe well-know concepts. As one example, academic papers about momentum are easily recognized as relative strength strategies by practitioners of technical analysis. An article by George Rahal bridges the divide between behavioral finance (in academic terms) and technical analysis.
Please let us know what you’d like to see in future issues of Technically Speaking.
Sincerely,
Mike Carr, CMT
What's Inside...
A Successful MTA Regional Seminar
by Derek HernquistOn January 29th, 175 individuals gathered at the Hilton Charlotte Center City to attend the MTA’s Southeast Regional Seminar. The morning started with a live webcast presentation from Keynote...
Cognitive-Behavioral Analysis of Financial Markets
by George RahalIn this article, I explore investor psychology and investment themes within a framework borrowed from the branch of psychology known as cognitive-behavioral theory. Studies have found...
CMT Exam Prep
by Lance McDonald, CMTThe CMT exam process requires passion and stamina, but I have found that it is not too different from real life. Just this week there was a debate among our floor traders about whether to hedge a...
Grading the CMT Exams
by Brad Herndon, CFA, CMTRecently, Level 3 exams were graded in a standard hotel conference room near New York City. We’ve all spent too many hours in those rooms and know all the mind numbing details – plain walls...
Interview with Trevor Neil
by Trevor Neil, MSTA, MCSI & Amber Hestla-BarnhartHow would you describe your job? I am a fund manager and use my long market experience to offer market timing skills courses for institutional clients. I have a prestigious list of intuitional...
Intermarket Analysis with John Murphy, CMT
by John Murphy, CMT & Michael Carr, CMTJohn Murphy, CMT made a presentation to the New York chapter on June 14, 2004. It is available on the interactive On Demand Video Archives. Murphy’s 1990 book, Intermarket Analysis, was one of the...
Technical Analysis Does Get Respect
by Michael Carr, CMTJeremy Grantham is a well-regarded stock market analysts and portfolio manager. His quarterly letters are read by many investment professionals, and are available at http://www.gmo.com/America (free...
MTA Announcements
Spring 2011 CMT Exam Administration – Sign Up Now Registration for the Spring 2011 CMT Administration is open for all three levels! Sign up today to ensure your preferred time, date, and...
On January 29th, 175 individuals gathered at the Hilton Charlotte Center City to attend the MTA’s Southeast Regional Seminar. The morning started with a live webcast presentation from Keynote Speaker, Ralph Acampora, CMT, who unfortunately was unable to make the trip. In his webcast he shared with us some timeless lessons as well as his bullish outlook for the coming year. We were then treated to a panel kicked off by Joseph Mertes, whose presentation on Auction Market Theory generated many questions and audience interaction. Joe also demonstrated the use of market profile charting, instead of traditional bar/candlestick charting, which drew interest for its unique depiction of price data. Following Joe was Cody Tafel, CMT, who described the major asset classes and provided his outlook for each one. Following Cody’s discussion of the risks and rewards underlying each macro theme, Chuck Dukas finished the panel discussion when he presented his approach
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)

Derek Hernquist
Derek Hernquist is a behavioral financier and the Head of Advisor Experience at Aptus Capital Advisors, where he works to simplify the investment process for the firm's clients. Previously, Derek was a Portfolio Manager at D. Scott Neal, Inc. where he focused...
In this article, I explore investor psychology and investment themes within a framework borrowed from the branch of psychology known as cognitive-behavioral theory. Studies have found cognitive-behavioral therapy to be one of the most effective forms of therapy. Its concepts and tools are extremely powerful and I believe that they are just as applicable for investing. In the context of financial markets, cognition refers to the mental representation and attitude towards information, fundamental or otherwise. (The “mental representation of and attitude towards” information can be abbreviated to the “perception of” information.) Stated simply, cognition deals with how an investor interprets new information, namely, whether it is fundamentally positive or negative, and the investor’s attitude towards it, namely, whether the market has overvalued, undervalued, or fully valued its significance. Over/under/fully valued is equivalent to being over/under/fully discounted. These perceptions translate to three possible behaviors, choosing to buy, sell, or hold. A change
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)

George Rahal
George Rahal has been writing about financial markets for several years. He began his career in Lazard Capital Markets’ equity research department. He has since been involved in technical research and trading, which he applies in his current role at Landor Capital...
The CMT exam process requires passion and stamina, but I have found that it is not too different from real life. Just this week there was a debate among our floor traders about whether to hedge a portfolio or not. The head portfolio manager walked over to my desk and said, “Should we hedge or not? You have 10 minutes.” I had better have a solid opinion quickly because in 10 minutes somebody will be happy with me and somebody will be upset with me. No time to pull out Kirkpatrick, Murphy, Pring, etc. You either know it or you don’t. The happy ending to this story is that with my recommendation I gave risk-reward numbers along with profit targets and stop loss levels. Everyone quickly became comfortable with the defined risk and reward. You must study for the CMT exam expecting challenging questions in a tight timeframe and you must
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)

Lance McDonald, CMT
Lance McDonald, CMT is a technical analyst at Lexington Capital, LLC, which he founded in 2011. Lance has been investing in stocks, futures, and FOREX since 2003, and has been publishing market views since 2006. Prior to the creation of Lexington Capital, LLC, Lance worked for...
Recently, Level 3 exams were graded in a standard hotel conference room near New York City. We’ve all spent too many hours in those rooms and know all the mind numbing details – plain walls with a dry erase board mounted at the front of the room; inexpensive light fixtures that they call chandeliers; tables with chips on the edges from being stored roughly over the years; chairs that don’t look very comfortable, and actually aren’t very comfortable. The only thing notable about the room was the seriousness of the graders. As the candidate’s answer sheets were handed out early in the morning, the joking among old friends and new volunteers came to a halt. For hours, about two dozen CMTs would be silently reading, the only sound being the turning of pages and the occasional discussion in an effort to ensure fairness to the candidate. Fairness dominated the process. No identifying
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)

Brad Herndon, CFA, CMT
BIO
How would you describe your job? I am a fund manager and use my long market experience to offer market timing skills courses for institutional clients. I have a prestigious list of intuitional clients from all over the world. I manage a small £14 million fund. This is a closed fund and includes my own money. This started in July 2010 and has done well so far, ahead of its benchmark. I have managed hedge funds twice previously in my career. I enjoy the training side of my work very much. Most of my seminars are in-house for dealers, fund managers, prop traders or analysts within banks, hedge funds and other institutions. I also run a few open seminars but these are aimed at an institutional audience. The seminars are popular and successful with desk managers and HR departments and allow me to travel extensively. Last year I worked in companies 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)

Trevor Neil, MSTA, MCSI
Trevor Neil is a Director of RRG Research BV. He is considered Europe's leading Quantitative/Technical Analysis expert who has spent over 40 years in the financial industry. Trevor began his career as a soft commodity floor trader for Merrill Lynch in 1974. Since then, he...

Amber Hestla-Barnhart
Bio coming
John Murphy, CMT made a presentation to the New York chapter on June 14, 2004. It is available on the interactive On Demand Video Archives. Murphy’s 1990 book, Intermarket Analysis, was one of the most important books in the field of technical analysis. The book was updated and a second edition was published in 2004. In this presentation, he updates his original work, in a unique way for a technician. He didn’t use any charts, choosing to focus on the concepts of intermarket analysis which at that time he felt could have an impact on the future of technical analysis. Since the original publication of the book, he noted that markets had changed. Deflation concerns dominated the markets in 1997-1998. The link between bonds and stocks is a cornerstone of intermarket analysis, and their positive correlation had been prominently discussed in the original edition. Deflation threats have continued to impact stocks over
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)

John Murphy, CMT
John Murphy, Chief Technical Analyst at StockCharts.com and former technical analyst for CNBC, is author of several popular books including the best-selling Technical Analysis of the Financial Markets. His books on intermarket analysis created a new...

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...
Jeremy Grantham is a well-regarded stock market analysts and portfolio manager. His quarterly letters are read by many investment professionals, and are available at http://www.gmo.com/America (free registration is required to access the newsletters). Grantham was also a keynote speaker at the 2010 CFA Institute Annual Seminar, and a value investor. His firm, GMO, manages over $100 billion, using fundamental analysis. But in his most current newsletter, published in January 2011, Grantham offers insights into the Presidential Cycle and illustrates the idea of bubbles using numerous charts and standard deviation bands. The chart is similar to the excellent and well known work produced by Ned Davis Research, a leader in technical analysis. Grantham also features dozens of charts of bubbles in his newsletter and describes the psychology behind the large price moves. He comments that the aftermath of a price bubble can be hazardous to even the best selected Graham and Dodd
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
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...
Spring 2011 CMT Exam Administration – Sign Up Now Registration for the Spring 2011 CMT Administration is open for all three levels! Sign up today to ensure your preferred time, date, and location. Contact Marie Penza, 646-652-3300, for information on the CMT Program or if you are having trouble scheduling your exam with our outside test center administrator, Prometric. For detailed instructions on how you can register online, please click here. 2011 Annual Symposium – Space is Limited, Register Today The 2011 Annual Symposium will truly be the most memorable in MTA Symposium history. In addition to some of the world’s most recognized presenters, this two day event also includes two networking cocktail receptions: one on the floor of the New York Stock Exchange and the other at the Museum of American Finance. The tentative agenda for the 2011 Annual Symposium is now available online! The first day of the Symposium includes presentations by Ken Winans,
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.
New Educational Content This Month
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November 22, 2023
Utilizing Trend & Mean Reversion in Breadth Studies to Gauge Market Conditions
Presenter(s): Victor Riesco
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November 18, 2023
Beating the Bench
Presenter(s): Scott Brown, CMT
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October 25, 2023
Equity Risk & Potential – Q4, ’24 & Beyond
Presenter(s): Timothy Hayes, CMT