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Technically Speaking, March 2016

LETTER FROM THE EDITOR

Recently the MTA annual award recipients were announced.

  • Annual Award: Louise Yamada, CMT
  • Memorial Award: Paul Macrae Montgomery
  • Service Award: Ron Meisels
  • Charles H. Dow Award: Charlie Bilello, CMT & Michael A. Gayed, CFA

Each of the award winners will be recognized at the Annual Symposium and will be featured in Technically Speaking. This month we provide some brief information on several of the winners and look back at the previous Charles H. Dow Award that Charlie and Michael won. This is their second Dow Award-winning paper and they now join Charlie Kirkpatrick, Jr., CMT, as the only two-time winners.

There are a number of submissions for the Dow Award every year and winning in any year is an accomplishment. Charlie and Michael spend a great deal of time researching new ideas and their efforts can be seen in their papers. I would not be surprised if they are hard at work on new ideas and I would expect them to prepare more papers in the future. They may even win a third Award but I am confident that won’t be an easy task. Papers submitted for the Award always include a variety of unique insights into technical analysis.

Next year’s Dow Award deadline is at the end of the year but that date is rapidly approaching. If you have an idea, now might be the time to start drafting a paper so you have a chance at winning.

We’ll learn more about this year’s winning paper at the Symposium next month. Charlie Kirkpatrick will also be a speaker at the Symposium sharing his recent work with attendees. I know I say it every year but this year’s line-up of speakers is the best yet and I hope to have the chance to meet many of you at the events.

Sincerely,

Michael Carr

What's Inside...

MTA ANNUAL AWARD WINNER: LOUISE YAMADA, CMT

Louise Yamada, CMT, is Managing Director of Louise Yamada Technical Research Advisors (LYA), the firm she founded in 2005 after a 25-year career at Smith Barney (Citigroup) where she had been...

MTA MEMORIAL AWARD: PAUL MACRAE MONTGOMERY

Paul was a nationally-renowned forecaster of stock and bond markets who chose to stay put in his home town of Newport News, a serious student of statistics whose sense of the ridiculous led to his...

MTA SERVICE AWARD WINNER: RON MEISELS

Editor’s note: Below are the latest thoughts on the stock market from this years’ Service Award winner. FEBRUARY WAS A CAUTIOUSLY OPTIMISTIC MONTH FOR THE BULLS; BUT THERE IS MORE WORK TO DO TO...

FOUR TRENDING INDICATORS TO REPLACE THE MOVING AVERAGE

by Cory Mitchell, CMT

Editor’s note: This article was originally posted at VantagePointTrading.com. It offers a useful review for CMT candidates as they prepare for their next exam. Here are four trending indicators you...

ARE THE MARKETS UP A CREEK?

by Joshua Silverman

Editor’s note: this was originally posted at the Global Financial Data blog. It provides a historical perspective of the current market action. This year started weak. So weak in fact that the...

OIL AND THE DOMINOES 2016

by Greg Schnell, CMT, MFTA

Editor’s note: this article was originally published at StockCharts.com on February 24, 2016. Market conditions may have changed since then and the information below is not intended to be...

CHART OF THE MONTH

The Charles H. Dow Award is presented annually for outstanding research in technical analysis. As the 2014 winners, Michael Gayed, CFA, and Charles Bilello, J.D., CPA, CMT, demonstrated, research can...

MTA ANNUAL AWARD WINNER: LOUISE YAMADA, CMT

MTA ANNUAL AWARD WINNER: LOUISE YAMADA, CMT

Louise Yamada, CMT, is Managing Director of Louise Yamada Technical Research Advisors (LYA), the firm she founded in 2005 after a 25-year career at Smith Barney (Citigroup) where she had been Managing Director and Head of Technical Research. In order to have a long career, it is important to offer valuable market insights and Louise continues to do that. Louise has developed a framework for analysis that could be followed by anyone. Many readers of Technically Speaking will be familiar with the long-term and innovative nature of Louise’s work. Her book, Market Magic: Riding the Greatest Bull Market of the Century (John Wiley & Sons, 1998) walks readers through a process that applies standard tools of technical analysis in unique ways, often using relative strength analysis and charts that contain data spanning several decades. An example of this technique is shown below: The Capital/Consumer (C/C) ratio is shown at the bottom 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.

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MTA MEMORIAL AWARD: PAUL MACRAE MONTGOMERY

MTA MEMORIAL AWARD: PAUL MACRAE MONTGOMERY

Paul was a nationally-renowned forecaster of stock and bond markets who chose to stay put in his home town of Newport News, a serious student of statistics whose sense of the ridiculous led to his lighthearted discovery of the women’s hemlines indicator of stock prices. Paul passed away in October 2014 at the age of 72. Details of Paul’s life beyond his financial work can be found in his obituary. In the August 2007 issue of this magazine, Bernie Schaeffer noted “Paul Macrae Montgomery is an analyst and money manager who for many years has published a weekly newsletter called Universal Economics, first under the auspices of Legg Mason and then independently. Paul is certainly an accomplished technician but that would be far too restrictive a description of his work. The best way I can describe him is as a student of behavior – whether it be the behavior of 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.

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MTA SERVICE AWARD WINNER: RON MEISELS

MTA SERVICE AWARD WINNER: RON MEISELS

Editor’s note: Below are the latest thoughts on the stock market from this years’ Service Award winner. FEBRUARY WAS A CAUTIOUSLY OPTIMISTIC MONTH FOR THE BULLS; BUT THERE IS MORE WORK TO DO TO COMPLETE THE CORRECTIVE PHASE After a negative start to the year, the month of February clarified two things.  First, bearish forces are not going to have an easy time in defeating the 7-year bull market.  The S&P 500 was able once again to defend the key 1,800 – 1,850 support zone and then launch a good rally. Second, the status of the markets at the 1,810 low on February 11th suggests that the February low was an important event.  The bears suggest that the November to February action is the first leg down in a bear market.  Therefore, the 8% rally off the February low is just a minor counter-trend move that will be soon followed by another down leg

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.

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FOUR TRENDING INDICATORS TO REPLACE THE MOVING AVERAGE

FOUR TRENDING INDICATORS TO REPLACE THE MOVING AVERAGE

Editor’s note: This article was originally posted at VantagePointTrading.com. It offers a useful review for CMT candidates as they prepare for their next exam. Here are four trending indicators you can use to isolate the trend when trading. They include ATR Stops, MA Envelopes, Turtle Channels and TTM Trend. Moving averages are a popular trending indicator, but I don’t find them useful and don’t use them. I prefer the indicators discussed below. In my opinion they are better, and you’ll occasionally see these indicators on the charts I publish…although I typically trade off price action alone (no indicators). “Better” is subjective in this case. As with everything in trading, it’s how we use a tool, and not necessarily the tool itself. Ultimately each trader must decide which tools they will use, formulate a trading plan and then stick to that plan. If you are still deciding which tools you want to use though, these indicators may help you spot the 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)

Cory Mitchell, CMT

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ARE THE MARKETS UP A CREEK?

ARE THE MARKETS UP A CREEK?

Editor’s note: this was originally posted at the Global Financial Data blog. It provides a historical perspective of the current market action. This year started weak. So weak in fact that the first ten trading days of January were the worst in US history.  The television is rife with talking heads exuberant over who they can point the finger at. “Oil,” one shouted. “Tech,” said another. A third bemoaned turbulence on the other side of the pond in European banks staring down a dry well of capital. Lastly, on February 10, 2016, Janet Yellen, the Chairman of the Board of Governors of the Federal Reserve Bank, faces tough questions from the White House on Capitol Hill, discussing the condition of the economy and interest rate hikes. Countries all over the world feel the crunch. Venezuela, with oil declines, is near bankruptcy. Brazil is buried under a staggering amount of debt. Japan has

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)

Joshua Silverman

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OIL AND THE DOMINOES 2016

OIL AND THE DOMINOES 2016

Editor’s note: this article was originally published at StockCharts.com on February 24, 2016. Market conditions may have changed since then and the information below is not intended to be investment advice. It is reprinted here as an example of a comprehensive market analysis combining chart patterns, indicators and intermarket principles. This article details the domino effect from the Energy Sector collapse as it rolled to other industries and sectors. As the problem continues on in time, it also continues to dramatically impair more industry groups and sectors. I think this series of charts serves to illustrate how tenuous the current market position is. I used ETF’s to show how the investor in actual trades might have been affected. The red line shows the highest week on the chart. The charts are in chronological order as the industry groups made their final highs.  All charts have the same dates from beginning to end, so you can see

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)

Greg Schnell

Greg Schnell, CMT, MFTA

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CHART OF THE MONTH

CHART OF THE MONTH

The Charles H. Dow Award is presented annually for outstanding research in technical analysis. As the 2014 winners, Michael Gayed, CFA, and Charles Bilello, J.D., CPA, CMT, demonstrated, research can be put to practical use. They have used the analysis presented in their paper to manage mutual funds and separately managed accounts and have now created an index to track the results of their analysis. In their 2014 Charles H. Dow Award winning paper “An Intermarket Approach to Beta Rotation,” they outlined an indicator that switches in and out of the S&P 500 based on the recent price action of the utilities index. The chart below demonstrates that this idea could be used to time the market and also demonstrates Gayed and Bilello’s idea continues to work in the current market environment.

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.

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New Educational Content This Month

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