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Technically Speaking, March 2012

LETTER FROM THE EDITOR

This issue starts with a small preview of the upcoming Annual Symposium.  Michael Covel will be the keynote speaker and we are presenting a small sampling of his philosophy. Covel is an expert on trend following and is able to explain the strategy along with its rich history. His writings are a valuable source of information for traders and his talk will certainly be valuable for traders and those interested in market psychology and history. Also in this issue, Scott Hathaway offers another insightful article with another technique that he has developed. Last month he presented pentagonal analysis with detailed examples and a complete explanation of how you could apply the ideas to any chart. Scott recently explained his investing philosophy to me. He believes that “the mechanism behind the market is the collective unconscious of the trading community is a whole entity existing in our universe conforming to mathematical properties like everything else. Geometry of price and time helps to reveal these underlying fundamentals of this collective energy.” We are

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What's Inside...

THE PHILOSOPHY OF TREND FOLLOWING - ADAPTED FROM MICHAELCOVEL.COM

by Michael Covel

Michael Covel has studied trend following and written extensively on exactly how this trading strategy works. His research may be the most comprehensive look at what trend following is and the most...

INTERVIEW WITH SAM HALE, CMT

by Sam Hale, CMT & Amber Hestla-Barnhart

This month, I had the opportunity to ask Sam Hale about his life in the markets. Sam came to the markets after a very successful career in radio, which is documented at Reel Radio, a repository of...

BACK TO THE DRAWING BOARD: PARABOLIC CURVES & THE DOW

by Scott Hathaway, CFTe

As the Dow keeps climbing higher (although not yet outside of the external circle of the pentagon from last month’s article), I am pondering the possibilities of a new all-time high, as well as...

A LOOK AT INTERNATIONAL MARKETS

by Ramy Rashad, CMT

From Egypt, Ramy Rashad offers insights into markets in the Middle East. Tadawul All Share Index (Saudi Stock Exchange)BOTTOM LINE: (Last Price: 7,031 Pt.) Wow, the monthly chart is about to speak. A...

2011 CUSTOMER SERVICE SURVEY RESULTS SUMMARY

by Tyler Wood

Thank you for your feedback and comments on the 2011 Annual Member Survey. This Survey was distributed to the entire MTA membership. We would like to thank those of you that took the time to provide...

MTA HIRES DIRECTOR, CMT STUDIES

The Market Technicians Association, Inc., the leading global organization for technical analysis professionals and the governing body for the Chartered Market Technician (CMT) designation, has hired...

SCHULTZ AT - THE MISNAMED INDICATOR

by George A. Schade, Jr., CMT

Tracing an indicator’s origin is an exciting hunt. Gregory Morris and Robert Colby have written about the “Schultz AT” measure of market breadth. Morris asked who Schultz was but did not get a...

THE PHILOSOPHY OF TREND FOLLOWING - ADAPTED FROM MICHAELCOVEL.COM

THE PHILOSOPHY OF TREND FOLLOWING - ADAPTED FROM MICHAELCOVEL.COM

Michael Covel has studied trend following and written extensively on exactly how this trading strategy works. His research may be the most comprehensive look at what trend following is and the most detailed history of how well it works.

Trend following trading reacts to the markets. Trend followers make no effort to forecast or predict markets or price levels. Trend trading is a disciplined approach to entering and exiting markets with precise rules that define a risk management. Covel believes that it is a system that money management can be easily incorporated into trend following systems and long-term success can be achieved by almost any trader willing to strictly follow a sound trend following system.

Success comes from following the rules of the strategy and giving the discipline to ignore the emotions that make it difficult to execute any trading strategy. Trend followers try

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Contributor(s)

Michael Covel

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INTERVIEW WITH SAM HALE, CMT

INTERVIEW WITH SAM HALE, CMT

This month, I had the opportunity to ask Sam Hale about his life in the markets. Sam came to the markets after a very successful career in radio, which is documented at Reel Radio, a repository of classic radio, http://go.mta.org/258. His thoughts on the markets are below. It is interesting to note that Sam has enjoyed success in three fields – radio, the markets, and now helping others who have been victimized in the markets (you’ll see what I mean at the end).

Sam’s thoughts:I developed an interest in the stock market as a hobby when I was deep in my first career, which was broadcasting. The interest became more intense as I mastered the few books and instruction courses available in 1960. I even took by correspondence the courses from the New York Institute of Finance.

In 1985, when my earnings from the market were multiples of my radio salary, I

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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)

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BACK TO THE DRAWING BOARD: PARABOLIC CURVES & THE DOW

BACK TO THE DRAWING BOARD: PARABOLIC CURVES & THE DOW

As the Dow keeps climbing higher (although not yet outside of the external circle of the pentagon from last month’s article), I am pondering the possibilities of a new all-time high, as well as large chart patterns such as a double top or a 5 wave expanding pattern. This naturally stirs the desire to establish large-scale frameworks of effective support and resistance of the major tops and bottoms that extend into the future.

Therefore, I would like to present some of my large-scale parabolic curves and structures along with upcoming dates and prices for possible major reversals: a ‘parabolic perspective’, so to speak. And here’s the kicker:

It all comes from the low of August 1982.

(Concerning parabolic theory and my techniques, I will describe these as we go along. First, I want you to see these curves in action.)

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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)

Scott Hathaway, CFTe

Scott Hathaway, CFTe

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A LOOK AT INTERNATIONAL MARKETS

A LOOK AT INTERNATIONAL MARKETS

From Egypt, Ramy Rashad offers insights into markets in the Middle East.

Tadawul All Share Index (Saudi Stock Exchange)BOTTOM LINE: (Last Price: 7,031 Pt.)

Wow, the monthly chart is about to speak. A bullish monthly candle finally came to complete the H&S pattern that we pointed to previously. Bullish signals on the RSI and K%D showing the market’s strength and its ability to do more and more. The 7,000 level was the gate to the 8,000 level then the 9,650 level. You are advised to Buy Dips with a firm stop below 6,800.

Dubai Major IndexBOTTOM LINE: (Last Price: 1,608 Pt.)

It seems that the UAE stock market will be a profitable

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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)

Ramy Rashad, CMT

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2011 CUSTOMER SERVICE SURVEY RESULTS SUMMARY

2011 CUSTOMER SERVICE SURVEY RESULTS SUMMARY

Thank you for your feedback and comments on the 2011 Annual Member Survey. This Survey was distributed to the entire MTA membership. We would like to thank those of you that took the time to provide us with feedback that will help the MTA to improve our offerings and better serve you, the membership. This year’s Survey included six major sections:

  1.  Demographic Data
  2. Member Services
  3. Future Directions
  4. Advocacy
  5. CMT Program Improvement
  6. Volunteering with the MTA

There were a few key points that impact the overall direction of the MTA that we would like to highlight. The three (3) graphs below represent important demographic trends about the memberships’ level of education, professional occupation and country of residence.

Career Development

A

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Contributor(s)

Tyler Wood

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MTA HIRES DIRECTOR, CMT STUDIES

MTA HIRES DIRECTOR, CMT STUDIES

The Market Technicians Association, Inc., the leading global organization for technical analysis professionals and the governing body for the Chartered Market Technician (CMT) designation, has hired Robert Johnson, Ph.D., CFA, CAIA, in a consulting capacity as Director, CMT Studies. This position has been created to enhance the professionalism of the CMT Program. Dr. Johnson will direct the development and integration of CMT study materials, including the development of Learning Outcome Statements and eventually a customized curriculum for our candidates.

“The CMT has seen significant growth in recent years, and this lends to the credibility of technical analysis,” said David Keller, CMT, President of the MTA. “The MTA has worked hard to establish the CMT as the leading global designation for technical analysis. The hiring of this position clearly confirms the commitment of the MTA Board of Directors to elevate the learning experience of

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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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SCHULTZ AT - THE MISNAMED INDICATOR

SCHULTZ AT - THE MISNAMED INDICATOR

Tracing an indicator’s origin is an exciting hunt. Gregory Morris and Robert Colby have written about the “Schultz AT” measure of market breadth.

Morris asked who Schultz was but did not get a complete answer, while Colby suggested that AT had been named after John W. Schulz (no “t” in the surname).[i]

AT’s formula is simple, namely, the total number of advancing issues is divided by the number of total issues traded. The unaccumulated ratios are charted daily or smoothed preferably with a short term moving average.

Neither Harry D. Schultz nor John W. Schulz originated the AT indicator, but both popularized it. Harold M. Gartley created AT and wrote about it in 1935.

I. John W. Schulz

John W. Schulz was an early member of the Market Technicians Association (“MTA”). In 1979, he received the MTA Annual Award. According to Ralph Acampora, Schulz was a primary drafter of the charter MTA Constitution. In 1972,

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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)

George A. Schade, Jr., CMT

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New Educational Content This Month

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