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Technically Speaking, May 2011

Technically Speaking, May 2011 - 2023Letter from the Editor

This issue covers several basics of technical analysis. It’s often helpful to step back from the complexity we create in our field and review the time tested ideas that technical analysis has been built on.

George Schade, CMT, offers a historical perspective on the widely used stochastic oscillator. He has painstakingly researched the origin of this indicator and shows us how it was developed and explains the history of the indicator. We often forget that there was time before computers and data was difficult to obtain, and very expensive when it was found. This article takes us back in time to those simpler times, which in many ways required deeper market analysis and a greater understanding of how prices moved.

Phil Roth, CMT, details his recent experience of teaching technical analysis at a university. Phil is a major contributor to the course developed by the MTA Educational Foundation, and those wanting to learn more about the Foundation’s work can stop by their workshop at the Annual Symposium, or they can contact the Foundation directly. The ready-made course is a comprehensive summary of technical analysis, and is a tribute to Phil and those he worked with on its development.

I am hoping to meet many of our readers at the MTA Symposium this month. My opinion is that this annual event is one of the most valuable benefits of membership, and judging from the fact that the event has sold out, I am not alone in that assessment. Please let me know when we meet what articles you’d like to see in upcoming issues of the newsletter, or email me at editor@mta.org.

Sincerely,
Mike Carr, CMT

What's Inside...

Larry Katz

Very unexpectedly, and well before his time, Larry Katz passed away on April 11. 2011. Known to many in the Market Technicians Association and other professional organizations, Larry had spent...

Seeking Editor for Journal of Technical Analysis

The MTA Journal of Technical Analysis (JTA) Steering Committee, comprised of Julie Dahlquist, Ph.D., CMT, Michael Moody, CMT and George Schade, Jr., CMT, has created the job specifications for the...

The Origins Of The Stochastic Oscillator

by George A. Schade, Jr., CMT

This article answers the longstanding question who originated the %K and %D stochastic oscillator used by market technicians. The question has been debated for years. In center stage are the roles of...

Technical Analysis In Academia: The University Of Virginia

by Phil Roth, CMT

The MTA Educational Foundation has again been able to expand its university penetration in the Mid-Atlantic area. I made two presentations to students at the McIntire School of Commerce at the...

Interview with Ken Tower, CMT

by Ken Tower, CMT & Amber Hestla-Barnhart

How would you describe your job? To provide valuable research to portfolio and hedge fund managers in a way that helps them make money. In my spare time I look for new clients. What led you to look...

Using and Understanding Point & Figure with Jeremy du Plessis, CMT, FSTA

by Jeremy du Plessis, CMT, FSTA

On February 24, 2010, author and noted analyst Jeremy du Plessis made a presentation as aprt of the MTA Educational Web Series. His book, The Definitive Guide to Point and Figure, is an integral part...

Moving Averages: Uses and Limits

by Michael Carr, CMT

This is a standard tool for market technicians, but a review of the basics can often be helpful. The moving average, long used as market timing tool, can also be used to reduce risk. A moving average...

MTA Announcements

MTA Charles H. Dow Award – Winning Paper Announced! The Dow Award Committee is pleased to announce that coauthors Julie R. Dahlquist, Ph.D., CMT, senior lecturer, Department of Finance, at the...

Larry Katz

Larry Katz

Very unexpectedly, and well before his time, Larry Katz passed away on April 11. 2011. Known to many in the Market Technicians Association and other professional organizations, Larry had spent nearly half his life in the industry, however his career spanned less than thirty years.  Like many industry veterans, Larry began his career as a financial consultant and worked with a number of major brokerage firms. While in this position, he began using technical analysis and discovered that it offered a far better way than traditional fundamental tools to service his client base. In the early 1990’s he was hired by a small Los Angeles brokerage firm as director of technical research. In 1995 he began publishing his flagship news letter, Market Summary and Forecast, http://www.marketsummaryandforecast.com/. He found success in this endeavor, and was still publishing insights and trade recommendations sixteen years later. Larry was a recognized expert in Elliott Wave theory, which he

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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Seeking Editor for Journal of Technical Analysis

Seeking Editor for Journal of Technical Analysis

The MTA Journal of Technical Analysis (JTA) Steering Committee, comprised of Julie Dahlquist, Ph.D., CMT, Michael Moody, CMT and George Schade, Jr., CMT, has created the job specifications for the open position of journal editor. Please see below for details. Characteristics The editor should be a reasonably longtime Member of the MTA, preferably a CMT, who understands the objectives and goals of the MTA, has a strong appreciation for the mission of the Journal of Technical Analysis (JTA), and engenders good working relationships. The editor should have professional experience in writing and publishing. It is important that the editor appreciates the historical traditions in the field as well as be open and inquisitive about new approaches and developments. The editor needs to be someone who can appreciate a wide variety of approaches and techniques within the field of technical analysis. In addition, the editor must be fair and professional in dealing with a wide

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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The Origins Of The Stochastic Oscillator

The Origins Of The Stochastic Oscillator

This article answers the longstanding question who originated the %K and %D stochastic oscillator used by market technicians. The question has been debated for years. In center stage are the roles of C. Ralph Dystant (1902-1978) and George C. Lane (1921-2004). The %K and %D stochastic oscillator is commonly associated with Lane. For many years, Lane taught its use. While he cannot be solely credited for originating the indicator, he must be recognized for his life’s work popularizing it. I. Background Dystant owned and operated a school called Investment Educators which opened in 1948. The Chicago based school initially offered stock market courses but in the late 1950s began offering commodities courses. In Lane’s words, Investment Educators taught “charting, moving averages, and the Elliott Wave in a series of three classes” and “was the first school to teach a heavy course in Elliott Wave.” Dystant had great interest in the Elliott Wave

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 A. Schade, Jr., CMT - 2023

George A. Schade, Jr., CMT

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Technical Analysis In Academia: The University Of Virginia

Technical Analysis In Academia: The University Of Virginia

The MTA Educational Foundation has again been able to expand its university penetration in the Mid-Atlantic area. I made two presentations to students at the McIntire School of Commerce at the University of Virginia on April 2011. Thanks to my friendship with Julian Robertson I was able to get an introduction to Carl Zeithaml, Dean of the McIntire School. Dean Zeithaml put me in touch with Prof. Stefano Grazioli, who invited me to speak to two of his classes. Through a very generous donation by Mr. Robertson, the McIntire School has a new facility, Robertson Hall, where my lectures were given. The University of Virginia is probably unique in that it has two separate schools that offer graduate programs in business and finance. The Darden School grants traditional MBA’s, while the McIntire School grants undergraduate degrees in business, as well as Masters of Science degrees in several areas of finance. Many 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.

Contributor(s)

Philip J. Roth, CMT

Phil Roth, CMT

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Interview with Ken Tower, CMT

Interview with Ken Tower, CMT

How would you describe your job? To provide valuable research to portfolio and hedge fund managers in a way that helps them make money. In my spare time I look for new clients. What led you to look at the particular markets you specialize in as opposed to another tradable? We use a proprietary set of algorithms whose only input is price. This allows us to follow pretty much every tradable market of interest to our clients. Recently we have added the stocks that make up the Shanghai Composite and some new commodity based ratio charts (similar to relative strength charts). Do you look at any fundamental or economic inputs to develop your opinions? Knowing the fundamental and economic story helps to describe our opinions to clients and especially to the media. What technique do you rely on the most? Can you describe this tool? Although I grew up (in the business, that is) on Point and

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)

Ken Tower, CMT - 2023

Ken Tower, CMT

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Using and Understanding Point & Figure with Jeremy du Plessis, CMT, FSTA

Using and Understanding Point & Figure with Jeremy du Plessis, CMT, FSTA

On February 24, 2010, author and noted analyst Jeremy du Plessis made a presentation as aprt of the MTA Educational Web Series. His book, The Definitive Guide to Point and Figure, is an integral part of the CMT curriculum, and this webcast offers CMT candidates a valuable review resource. Members can view it at anytime in the MTA On Demand Video Archives. This presentation was designed to introduce the concept of point and figure and help explain what makes the charts useful. The basics are well known to most technicians. It is a chart comprised of Xs and Os, although Jeremy also explains a less widely known technique that uses only Xs. There is no time scale on the chart. Each X or O represents only price movement, and price moves less than the box size are ignored. Jeremy noted that P&F charts originated in the 19th century as a way to

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)

Jeremy du Plessis, CMT, FSTA - 2023

Jeremy du Plessis, CMT, FSTA

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Moving Averages: Uses and Limits

Moving Averages: Uses and Limits

This is a standard tool for market technicians, but a review of the basics can often be helpful. The moving average, long used as market timing tool, can also be used to reduce risk. A moving average is a well known technique to smooth market price data and help to identify the trend. Among the earliest references to this time-tested strategy can be found in the classic introductory text, Technical Analysis of Stock Trends by Robert Edwards and John Magee. In the first edition of their book, in 1948, they wrote: And, it was back in 1941 that we delightedly made the discovery (though many others had made it before) that by averaging the data for a stated number of days…one could derive a sort of Automated Trendline which would definitely interpret the changes of trend…It seemed almost too good to be true. As a matter of fact, it was too good

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

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MTA Announcements

MTA Announcements

MTA Charles H. Dow Award – Winning Paper Announced! The Dow Award Committee is pleased to announce that coauthors Julie R. Dahlquist, Ph.D., CMT, senior lecturer, Department of Finance, at the University of Texas at San Antonio College of Business, and Richard J. Bauer, Jr., Ph.D., CFA, CMT, Professor of Finance at the Bill Greehey School of Business at St. Mary’s University in San Antonio, Texas, have been selected by the Market Technicians Association to receive the 2011 Charles H. Dow Award. Their paper, titled “Analyzing Gaps for Profitable Trading Strategies,” presents a detailed template for analyzing gaps filtered for various market conditions to identify actionable trading opportunities while focusing on relative market performance. To view the complete press release, please click here. Board Elections Open Members, Honorary Members and Emeritus Members, please note the following: Online proxy voting for the upcoming election of MTA At-Large Directors positions (3) is moving along well. However, we

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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