public

Technically Speaking, May 2009

Letter from the Editor

In Technically Speaking we try to bring you money making ideas and news that impacts the field of technical analysis each month. This month, both are combined into the most difficult article I have ever had to write. Mike Epstein passed away in April. To those who knew him, his death is an enormous loss since Mike’s outsized personality always left you feeling optimistic after discussing the markets or life with the philosopher-trader. In the brief article we include in this newsletter, we attempt to provide a picture of his life. We also attempt to offer a glimpse into the wisdom he shared from his lifetime of experience. Mike knew how to trade, and he traded for a living and for enjoyment. Whenever he spoke, there was an opportunity to learn. Older traders and analysts offer that opportunity. And the MTA facilitates those meetings. It is an incredible organization from that respect – no where else do I see experienced members, some of whom are highly seasoned citizens, so willing to share their

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.

What's Inside...

Remembering Mike Epstein

by Michael Carr, CMT

On April 22, 2009, Mike Epstein passed away. He was known by many as a great trader and everyone who met him thought of him as a great person. Mike symbolized all that the trading community should...

Letter from David Keller, CMT, MTA Regions Chair

by David Keller, CMT

I wanted to give the membership a brief update on some exciting developments on the chapter front. As many of you know, the local chapter meeting can be one of the most important benefits of MTA...

Dow Theory Unplugged: Charles Dow’s Original Editorials and Their Relevance Today, Contributors: Richard Russell, Charles Carlson and Paul Shread

by Richard Russell & Charles Carlson & Paul Shread, CMT & Michael Carr, CMT

The tenets of Dow Theory are well known to all market technicians: The averages must confirm each other. The averages discount everything. The market has three trends. Major tends have three...

Interview with Brad Herndon, CFA, CMT

by Brad Herndon, CFA, CMT & Yevgen Avramych

This month I had the pleasure of speaking with Brad Herndon about his path towards becoming a CMT and some of his opinions on the financial markets and future careers in technical analysis. Brad...

Blogs of Note

by Jason Goepfert

With our new electronic format, it is easier for Technically Speaking to highlight valuable resources available to traders on the internet. Blogs often express nothing more than opinions, but some...

Dow Theory Update

Each stock market rally or decline leads to the inevitable question of whether or not a Dow Theory signal is generated. This theory is among the earliest technical analysis techniques and has...

MTA Announcements

CMT Exam Test Takers To all of the registrants sitting for the CMT Exam during the 2009 Spring Test Administration, the MTA Staff would like to wish you all the best of luck! We would also like to...

Remembering Mike Epstein

Remembering Mike Epstein

On April 22, 2009, Mike Epstein passed away. He was known by many as a great trader and everyone who met him thought of him as a great person. Mike symbolized all that the trading community should be. He started simply, and throughout a life well-lived, he never forgot that he was just a kid from Brooklyn. Hard work landed him a spot at Wesleyan University where he completed a B.A. in Economics in June 1953. From there, he entered the US Navy. Starting in the enlisted ranks, Mike rose to the rank of Lieutenant before he left the service in 1958.

While in the Navy, Mike was a deep sea diver (wearing the old bell diving suit), a salvage officer, and Commanding Officer (acting) USS Grasp ARS-24. While no one knows exactly what all Mike did in the Navy, several friends told a similar

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

Michael Carr, CMT

Back to top

Letter from David Keller, CMT, MTA Regions Chair

I wanted to give the membership a brief update on some exciting developments on the chapter front. As many of you know, the local chapter meeting can be one of the most important benefits of MTA membership. You have the opportunity to connect with other like-minded professionals in your area. You are able to hear some of the top experts in technical analysis discussing their approaches to a tumultuous market environment. You get to hear about some of the newest methods being
developed, as well as review the tried-and-true best practices of technicians from around the country and around the world.

A number of MTA members have taken on new leadership roles in their local chapters, and many others have reached out regarding starting a new chapter in their area. I’d like to congratulate Brandon Wendell on his new role as Chair of the San Diego Chapter, and extend a warm

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)

David Keller, CMT

Back to top
Dow Theory Unplugged: Charles Dow’s Original Editorials and Their Relevance Today, Contributors: Richard Russell, Charles Carlson and Paul Shread

Dow Theory Unplugged: Charles Dow’s Original Editorials and Their Relevance Today, Contributors: Richard Russell, Charles Carlson and Paul Shread

The tenets of Dow Theory are well known to all market technicians:

  1. The averages must confirm each other.
  2. The averages discount everything.
  3. The market has three trends.
  4. Major tends have three phases.
  5. Volume must confirm the trend.
  6. A trend is assumed to be in effect until it gives definite signals that it has reversed.

The theory is known mostly from the sixteen Charles Dow columns published by S. A. Nelson in his 1902 book, The ABC of Stock Speculation. In Dow Theory Unplugged, 220 of Dow’s original columns are presented, organized around the six tenets identified above. The opportunity to read Dow’s contemporaneous thoughts offers insight into the Theory, and the market itself at the turn as the twentieth century dawned. The book also includes charts of the indexes from the timeframe when Dow was writing which allows analysts to see what Dow saw and develop a feel for applying

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)

Paul Shread, CMT

Michael Carr, CMT

Michael Carr, CMT

Back to top

Interview with Brad Herndon, CFA, CMT

This month I had the pleasure of speaking with Brad Herndon about his path towards becoming a CMT and some of his opinions on the financial markets and future careers in technical analysis. Brad started his career as a portfolio manager in a regional bank. At the time he used the fundamental approach towards securities analysis. He went on to obtain a CFA as did many of his fellow co-workers, and later on in his career he became a director of stock research while managing a number of fundamental analysts.

Brad’s introduction to technical analysis came from colleague Mark Cremonie, CFA, CMT. The intrigues of Technical Analysis led Brad to an MTA seminar in Chicago wjere he met Ralph Acampora, CMT. After the seminar Brad was convinced that technical analysis was a very powerful and useful tool which could potentially allow him to make more money and be better equipped at

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)

Yevgen Avramych

Back to top
Blogs of Note

Blogs of Note

With our new electronic format, it is easier for Technically Speaking to highlight valuable resources available to traders on the internet. Blogs often express nothing more than opinions, but some contain detailed research or valuable summaries of news and views from around the investment community.

Jason Goepfert, President and CEO of Sundial Capital Research maintains a blog at http://sentimentrader.blogspot.com/. Jason has been trading stocks, stock and index options, index futures, currencies and commodities for over 10 years. He holds several securities licenses (Registered Representative, General Securities Principal and Options Principal) and has most recently managed the operations of a large hedge fund and top-10 online brokerage (Gomez rankings).

Jason founded sentimenTrader in 1998, and began a web presence in 2001. Currently, the site has subscribers in all 50 states and more than 40 foreign countries. Jason is also a contributing writer to Minyanville.com.

The posts are original, well researched, and deeply detailed:

Bullishness Breaks

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 Goepfert

Dow Theory Update

Dow Theory Update

Each stock market rally or decline leads to the inevitable question of whether or not a Dow Theory signal is generated. This theory is among the earliest technical analysis techniques and has withstood the test of time. While Dow Theory is well defined, its interpretation is actually highly subjective. Many practitioners will disagree on the precise timing of signals.

Robert W. Colby, CMT, refined Dow Theory by providing precise rules for buy and sell signals in his book The Encyclopedia of Technical Market Indicators (Second Edition, McGraw-Hill Publishing, 2003). The details of his refinements can be found at http://www.robertwcolby.com/dowtheory.html.

In mid-April, Colby wrote, “The Dow Theory reconfirmed a Primary Tide Bear Market on 3/9/09, when both the Dow-Jones Industrial Average and the Dow-Jones Transportation Average closed below their previous lowest closing prices of 2004-2009. These two Averages originally signaled a Primary Tide Bear Market on

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.

MTA Announcements

MTA Announcements

CMT Exam Test Takers
To all of the registrants sitting for the CMT Exam during the 2009 Spring Test Administration, the MTA Staff would like to wish you all the best of luck!

We would also like to remind you that as a “best practice”, as you continue through the CMT Program, please commence early the Membership and Sponsor process. Once the application process is completed and the sponsors identified, they can work as mentors to you through the overall process of CMT certification and, once the examination process is completed, we can move quickly to ensuring the designation is granted. If you have any questions on these two processes, please click here or call Cassandra Townes at 646-652-3300. She would be pleased to help you.

MTA May Symposium – Emerging CMT and Market Forecast Panels Announced!

The MTA is pleased to inform you that the panelists

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

Back to top