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Technically Speaking, May, 2006

From the Editor’s Desk

I am honored that Phil Roth, the new President of the MTA, accepted my offer to volunteer as interim editor of Technically Speaking. Carrying on the tradition of delivering a high quality newsletter each month is quite a challenge. My immediate predecessor, John Kosar, certainly set a high standard, and he followed in the footsteps of those before him, including Michael Kahn and Anthony Dwyer. Only with your help and contributions can I begin to approach the level of publication they attained month after month.

In each issue, you’ll learn about the latest happenings within the MTA. And, while news from our organization is nice to read, I always enjoy the technical analysis articles the most. So, we need your analysis and research to continue delivering trading ideas and market insights. As you may remember, I will never quit asking for your input to make your newsletter the best it can be.

Over the next several months, this newsletter will include more discussion from local MTA Chapters including recaps of speaker presentations, and profiles of the Chapters and how they reach MTA constituents and the investment community. In this issue, Garry Rissman expertly summarizes the most recent presentation at the New York Chapter’s monthly
meetings.

Meanwhile, the Rocky Mountain Chapter is getting back into the swing of things, and chapter member Jason Meshnick offers some timely analysis of the tobacco sector. Over the next few months, we’ll get an opportunity to hear from every MTA Chapter in the country. (That’s a hint that I’d like your input.)

I hope you enjoy the newsletter, and I look forward to your comments.

Mike Carr, CMT

Editor

What's Inside...

From the President’s Desk

by Phil Roth, CMT

Members and Affiliates: The President of the MTA, Jordan Kotick; the Vice President, John Kosar; and the Secretary, Barry Sine, resigned last month. Prior to resigning, Jordan Kotick proposed, and...

The Kiwi: A Global Market Canary?

In this article, some troubling developments in two of the smallest economies of the OECD are examined. Referred to in John Mauldin’s Weekly E-Letter entitled Fingers of Instability, it will be...

Analysis of the Dow Jones US Tobacco Index (DJUSTB)

by Jason Meshnick, CMT

Intro: Since hitting an all-time high in December, the Dow Jones Tobacco Index (DJUSTB) has fallen as much as 11% before rebounding during the final weeks of April. Despite this recent action, and...

Combining Fundamental and Technical Approaches

Richard T. Williams, CFA, CMT, Director of Research, ICAP (formerly Garban Institutional Equities), spoke at the New York Region Monthly Educational Meeting on April 10, 2006. The video of his...

New MTA Board

MTA PRESIDENT Philip J. Roth, a Chartered Market Technician (CMT) is currently the Chief Technical Market Analyst at Miller Tabak + Co. He is in his fortieth year as a Wall Street professional,...

Philadelphia Chapter April Meeting

The Philadelphia Chapter had its inaugural meeting on April 5 at the Pyramid Club in downtown Philadelphia. The event was well attended with more than 25 members turning out to hear Philip J. Roth,...

From the President’s Desk

From the President’s Desk

Members and Affiliates: The President of the MTA, Jordan Kotick; the Vice President, John Kosar; and the Secretary, Barry Sine, resigned last month. Prior to resigning, Jordan Kotick proposed, and Charles Kirkpatrick seconded a motion that the nominees for office in the 2006-2007 year be installed in place immediately. The motion carried. As a result, the new officers are Phil Roth, President; Larry Berman, Vice President; Tim Snavely, Secretary, and Julia Bussie, Treasurer. Of course, the election will be held, and the results will be announced at our annual meeting. I realize that this turnover of officers is odd and unprecedented for the MTA, but the immediate turnover of responsibilities will maintain the continuity in managing our organization. Contrary to what some members may believe, I am not bringing a grand new agenda to the MTA. Many of our current initiatives are valuable and must be maintained. The CMT program has blossomed

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)

Philip J. Roth, CMT

Phil Roth, CMT

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The Kiwi: A Global Market Canary?

The Kiwi: A Global Market Canary?

In this article, some troubling developments in two of the smallest economies of the OECD are examined. Referred to in John Mauldin’s Weekly E-Letter entitled Fingers of Instability, it will be published in full by Traders Mag. It may be accessed at http://www.TradingEducation.com/kiwi With the release of final fourth-quarter 2005 Gross Domestic Product (GDP) data for emerging and industrialized nations around the world, market watchers got another indication of the state of the global economy. Not surprisingly, China led the list with a GDP growth rate of 9.9%, followed by Hong Kong (7.6%) and India (7.6%). Eastern European stars Estonia (10.5%), Latvia (10.5%) and Lithuania (8.2%) also shone brightly. But a quintessential star performer that has benefited from strong commodity prices in the last few years provided a warning that could be the beginning of a global market ripple effect. After 21 consecutive quarters of gains, New Zealand surprised economists both at home

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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Analysis of the Dow Jones US Tobacco Index (DJUSTB)

Analysis of the Dow Jones US Tobacco Index (DJUSTB)

Intro: Since hitting an all-time high in December, the Dow Jones Tobacco Index (DJUSTB) has fallen as much as 11% before rebounding during the final weeks of April. Despite this recent action, and the weakness that appears set to follow over the coming months, the tobacco stocks should not be overlooked. In fact, they are expected to continue to outperform the broad equity indexes over, at least, the next year. The Macro View and Case for Defensive Issues: There are two, interrelated, reasons why tobacco stocks should outperform the broad equity markets during the next 1-2 years. First, the Four Year, or Presidential, Cycle is at a point where stocks are expected to be weak. When stocks are weak, investors run for the shelter of defensive issues, specifically those paying high dividends, like the 4.5% current yield on Altria Group (MO is 99.7% correlated with DJUSTB). Second, Stovall’s sector rotation model postulates 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)

Jason Meshnick, CMT

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Combining Fundamental and Technical Approaches

Richard T. Williams, CFA, CMT, Director of Research, ICAP (formerly Garban Institutional Equities), spoke at the New York Region Monthly Educational Meeting on April 10, 2006. The video of his presentation may be accessed via the MTA web site, at http://209.114.199.248/movies/wmv/.  Many years ago Richard recalled his surprise by the emotional reaction of a fundamental money manager who became furious at the notion that any rational person would use technical analysis. This conversation led Richard to seek an answer to the question of why technical analysis could be such a heated issue in the unemotional arena of investment management. He observed that technicians truly believe in what they do, while fundamentalists, mostly on the sell side, seem to publicly believe that technical analysis is equivalent to voodoo. Richard began his career as a fundamentalist. His first professional stock recommendation promptly plunged 50%, before going on to become an 85-bagger. Shaking his head

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 MTA Board

New MTA Board

MTA PRESIDENT Philip J. Roth, a Chartered Market Technician (CMT) is currently the Chief Technical Market Analyst at Miller Tabak + Co. He is in his fortieth year as a Wall Street professional, having been the chief market technician at Morgan Stanley, Shearson Lehman, EF Hutton, and Loeb Rhodes. A former director of the New York Society of Security Analysts and past President and former director of the Market Technicians Association, he has been voted No. 1 in Charting and Technical Analysis in the Reuters survey. He is a frequent commentator in the printed and electronic media. He is an Adjunct Professor in the Graduate School of Business at Fordham University, and has lectured at Baruch, Columbia, Cornell, Georgia Tech, Howard, Rutgers, Tulane, and the University of Richmond. MTA VICE PRESIDENT Biography currently not available. MTA TREASURER Ms. Bussie has been involved in the futures and financial markets since the early 1970’s. As a member

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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Philadelphia Chapter April Meeting

Philadelphia Chapter April Meeting

The Philadelphia Chapter had its inaugural meeting on April 5 at the Pyramid Club in downtown Philadelphia. The event was well attended with more than 25 members turning out to hear Philip J. Roth, Chief Technical Market Analyst at Miller Tabak + Co., LLC speak. Mr. Roth ‘s review of the markets, from the secular to the short term, was followed by a lively Q and A session.

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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