public

Technically Speaking, May 2019

Just when everyone pooh-poohs our beloved “Sell in May” saw, it somehow starts to work. Or maybe it was just that the S&P 500 hit resistance on waning momentum? Hmm. I, for one, do not blame a tweet. And I also don’t expect this series of coincidences to dictate my summer outlook. By the way, as I write this, the Dow is right where it was when it (and the Spoo) scored their golden crosses in late March. The truth is that the markets have changed since some of our indicators were created or discovered, and we have to change with them.  That’s why it is so important to keep learning. And keep respecting your “stops” on indicators that no longer produce results. What better place to learn that at the CMT Association annual symposium? This year’s is in the books, but even if you were unable to attend, you’ll be able to get a few insights from the presenters. We’ve got summaries of several of them in this newsletter edition. If you were there and took notes, we’d love to get a

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...

Copyright Basics, Part 2

by Joyce L. Miller & Dr. C. Daniel Miller

In our first article, in last month’s edition of Technically Speaking, we touched on the need to determine whether certain uses of copyrighted content require copyright permission. We briefly...

Stephen Cox Memorial

by Michael Kahn, CMT

Longtime CMT Association member, Stephen Cox, passed away on April 6, 2019, at age 69. Steve and his wife, Kate, met in Chicago in 1981, then moved to Brooklyn, where he landed a job with the...

Member Interview with John Kosar, CMT of Asbury Research

by John Kosar, CMT

Please tell us what you do professionally. I am Chief Market Strategist for Asbury Research, an investment research firm I launched in 2005, and a Managing Principal of Asbury Investment Management...

2019 Symposium Speaker Summaries: Behavioral Finance Panel Discussion: “Navigating the Behavioral Gap”

by Brett Villaume, CMT, CAIA

Panelists: Clare Flynn-Levy, Jason Voss, CFA, C. Thomas Howard, Ph.D., and Brett Whysel Moderated by Rick Lehman — Behavioral Finance and its application was the topic of discussion at the...

2019 Symposium Speaker Summaries: The Power of Momentum

by Brett Villaume, CMT, CAIA

Speaker: Julie Dahlquist, Ph.D., CMT — Often cited as a tool that bridges the gap between fundamental and technical analysis, Momentum has been mentioned many times at the Symposium, but...

2019 Symposium Speaker Summaries: Yes, There IS Alpha in the Marketplace

by Dave Lundgren, CMT, CFA

Speaker: Chris Cain The premise of Chris Cain’s presentation was to build a portfolio of ETFs combining several separate technical models. Of course, this is not a new concept, nor was it my...

2019 Symposium Speaker Summaries: Cognitive and Emotional Biases - Mitigate or Accommodate?

by Brett Villaume, CMT, CAIA

Speaker: Dr. Greg Filbeck, CFA, FRM, CAIA, CIPM, PRM — Behavioral biases are issues we deal with when we work with clients, but we also display them ourselves as money managers and...

2019 Symposium Speaker Summaries: FICC strategy and Intermarket overview

by James Brodie, CMT

Speakers: George Davis, CMT and Paul Ciana, CMT — George Davis started with a brief evolution of the changes witnessed in technical analysis during his career. These included the evolution...

2019 Symposium Speaker Summaries: Point & Figure Chart Construction – Tracking Supply and Demand

by Brett Villaume, CMT, CAIA

Speaker: Tom Dorsey — Tom’s career began in 1974 as a stock broker for Merrill Lynch, just at the end of the worst bear market since the Great Depression. Early in his career he read...

2019 Symposium Speaker Summaries: Future Trends in Investment Management

by James Brodie, CMT

Speaker: Stavros Iatridis — Stavros strongly believes we are on the cusp of dramatic changes in our industry. We are seeing slower growth and a continued decline in the workforce as global...

2019 Symposium Speaker Summaries: Integrating Technical Analysis into a Fundamental Framework

by Salma Abdulla, CFA, CMT

Speaker: Blaze Tankersley, CMT, CFA — There is a myth that technicals and fundamentals should be separate, but Blaze’s take on this logic is that “technical things happen for...

2019 Symposium Speaker Summaries: Technical Market Analysis: Industry Perspectives

by Brett Villaume, CMT, CAIA

Speaker: Michael Santoli — As the opening presentation of the CMT Association’s 46th Annual Symposium, Mike Santoli presented his view of Technical Analysis over the course of his career,...

2019 Symposium Speaker Summaries: The Role of Technical Analysis in Portfolio Construction and Position Sizing

by Salma Abdulla, CFA, CMT

Speaker: Louis Llanes, CMT, CFA Topic: How do quantitative technical techniques improve decision making for portfolio managers in a multi-disciplinary environment? Goal: to improve portfolio...

“Ethics” Video Series Available from CFA Institute

by Stanley Dash, CMT

CMT Association members know that the Association has adopted the CFA Institute Code of Ethics and Standards of Professional Conduct.  The CMT Association website reads, in part: Code of Ethics...

2019 Annual Meeting Notice

by Robert Palladino, CMT

The Annual Meeting of the CMT Association, Inc. membership is fast approaching and will take place on Tuesday, June 11, 2019 at 10:00 am New York Time. Online proxy voting for the annual meeting...

Membership News for May 2019

by Marie Penza

The CMT Association would like to congratulate the following members on their new positions:  Miguel Rito, Trainee Departamento Comercial at Juniscap Business Solutions Michael Stroud, CFP,...

Copyright Basics, Part 2

Copyright Basics, Part 2

In our first article, in last month’s edition of Technically Speaking, we touched on the need to determine whether certain uses of copyrighted content require copyright permission. We briefly identified two categories in which permission may not be required: fair use and public domain. In this article, we will discuss the first of these: fair use.

Fair Use

Last month, we introduced the fair use doctrine as a means to foster the free flow of ideas in society.  It is an attempt to balance the protection of intellectual property rights with the right of free speech given in the 1st amendment to the U.S. Constitution.  Because this balancing act is complex and involves subjective decisions made on a case by case basis in a court of law, a cautious decision to count on a claim of fair use requires careful consideration. An intelligent determination by the user or their publisher of whether

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)

Joyce L. Miller

Dr. C. Daniel Miller

Dr. C. Daniel Miller

Back to top
Stephen Cox Memorial

Stephen Cox Memorial

Longtime CMT Association member, Stephen Cox, passed away on April 6, 2019, at age 69.

Steve and his wife, Kate, met in Chicago in 1981, then moved to Brooklyn, where he landed a job with the Commodities Research Bureau. They married in 1983. While at the CRB, Steve became intrigued by technical analysis and eventually founded his own market advisory service, Heaviside Economics.

In 1986, they bought a house in Stillwater Township, NJ. He worked for Dow Jones Newswires in New York, and was the first technical analyst employed by the company. He retired in 2013 after 20 years of service.

Steve was instrumental in the creation in 1994 of the Charles H. Dow Award recognizing outstanding research in technical analysis. As a representative of the namesake Dow Jones and Company, he was part of the committee that defined the award and served as the committee chair for several years.

He became an association

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 Kahn, CMT

Back to top
Member Interview with John Kosar, CMT of Asbury Research

Member Interview with John Kosar, CMT of Asbury Research

Please tell us what you do professionally.
I am Chief Market Strategist for Asbury Research, an investment research firm I launched in 2005, and a Managing Principal of Asbury Investment Management (AIM), an asset management firm I co-founded in 2018.

How did you get there?
After working 17 years on the floor of the Chicago Mercantile Exchange in the 1980s and 1990s learning the business, I took a job as the fixed income technician at BridgeNews. From there, I went out on my own.

Who was an early mentor in your career?
John Murphy

What book/author was most influential in helping you understand TA?
Edwards and Magee and Murphy’s books.

What do you like to do when you are not looking at markets?
I enjoy spending time with my friends at dinners, movies and shows. Lately, I’ve been re-learning to play the piano, and, of course, being with my relatively new granddaughter.

What brought you

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)

John Kosar, CMT

2019 Symposium Speaker Summaries: Behavioral Finance Panel Discussion: “Navigating the Behavioral Gap”

2019 Symposium Speaker Summaries: Behavioral Finance Panel Discussion: “Navigating the Behavioral Gap”

Panelists: Clare Flynn-Levy, Jason Voss, CFA, C. Thomas Howard, Ph.D., and Brett Whysel
Moderated by Rick Lehman

Behavioral Finance and its application was the topic of discussion at the opening session on Thursday. The panel consisted of a diverse group of asset managers, investment advisors and consultants with broad qualifications within the study of Behavioral Finance, including authoring academic journals, textbooks, and even CFA curricula on the topic.

Rick introduced the theme of the panel as “behavioral alpha,” which is a relatively new term. One can approach the topic from both a micro and macro perspective: micro being the focus on individual’s behavioral biases, which create a negative alpha, versus the macro perspective, or the combined biases of all market participants.

The panelists provided brief introductions to themselves and their work. Clare works with money managers who are interested in recapturing the negative alpha of behavioral biases.

Tom helps clients avoid behavioral mistakes, but

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)

Brett Villaume, CMT, CAIA

Brett Villaume, CMT, CAIA

2019 Symposium Speaker Summaries: The Power of Momentum

2019 Symposium Speaker Summaries: The Power of Momentum

Speaker: Julie Dahlquist, Ph.D., CMT

Often cited as a tool that bridges the gap between fundamental and technical analysis, Momentum has been mentioned many times at the Symposium, but exactly is it?

Merriam-Webster defines it as “a strength or force gained by motion or by a series of events.”  But there are hundreds of synonyms for momentum that could mean something similar.  They all basically mean there is a force behind a price movement. Based on the laws of supply and demand, price can increase if demand increases or supply increases. So, what would cause the demand or supply to increase?

Fundamental analysis considers factors that would cause demand to increase, whereas technical analysts are more concerned with price movement. And there’s a movement in price that occurs either faster or slower. We as technicians are more concerned with the adjustment in the demand and supply equilibrium that results in the price level.

Momentum strategies

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)

Brett Villaume, CMT, CAIA

Brett Villaume, CMT, CAIA

2019 Symposium Speaker Summaries: Yes, There IS Alpha in the Marketplace

2019 Symposium Speaker Summaries: Yes, There IS Alpha in the Marketplace

Speaker: Chris Cain

The premise of Chris Cain’s presentation was to build a portfolio of ETFs combining several separate technical models. Of course, this is not a new concept, nor was it my biggest takeaway from his presentation, but it is a concept that warrants constant repetition: keep it simple. Chris grounded his audience in the notion of “first principles,” or those things that can be observed about markets that are factual, not option-based, and require no backtesting.

He cited three such principles–markets go up, markets go down, and markets go through periods of volatility—which he used to build four simple, intuitive models capturing each. The models combined to generate the alpha alluded to in the title of his presentation; however, the more important takeaway from this presentation was the fact that the results were grounded in these critical principles of market behavior.

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)

Dave Lundgren, CMT, CFA

Dave Lundgren, CMT, CFA

2019 Symposium Speaker Summaries: Cognitive and Emotional Biases - Mitigate or Accommodate?

2019 Symposium Speaker Summaries: Cognitive and Emotional Biases - Mitigate or Accommodate?

Speaker: Dr. Greg Filbeck, CFA, FRM, CAIA, CIPM, PRM

Behavioral biases are issues we deal with when we work with clients, but we also display them ourselves as money managers and investment advisors.  So it’s important to recognize whether or not the biases jeopardize the client’s goals.  Could we sit down with clients to help them avoid pitfalls?

There are two types of biases, cognitive and emotional. How do you distinguish between the two? What steps can we take to mitigate them? Or, should we try to accommodate for them?

Cognitive biases are limitations that exists based on our own heuristics — out experiences that drive our perception of things.  In many instances though, these can be overcome through training.  

There are two categories of cognitive biases: belief perseverance, which is clinging to previously-held beliefs, and information processing biases, which are errors committed due to human’s limited ability to think through situations effectively.

Types 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)

Brett Villaume, CMT, CAIA

Brett Villaume, CMT, CAIA

2019 Symposium Speaker Summaries: FICC strategy and Intermarket overview

2019 Symposium Speaker Summaries: FICC strategy and Intermarket overview

Speakers: George Davis, CMT and Paul Ciana, CMT

George Davis started with a brief evolution of the changes witnessed in technical analysis during his career. These included the evolution of technology and the blending of fixed income, commodities and currencies rather than having them viewed in individual silos.  He stressed the “cross asset approach,” which included a quote from John J. Murphy’s book on Intermarket Analysis, “The basic premise of intermarket analysis is that all markets are related.”

George’s process includes:

  1. Candlestick charts on various time frames
  2. Key supply/resistance levels
  3. Relative Rotation Graphs – leaders and lagging
  4. Trend and momentum analysis
  5. Timing of trades
  6. Relative strength, correlation and fusion analysis
  7. Cross asset signals
  8. Seasonality and positioning
  9. Communicate market view as clearly as possible
  10. Establish price target and stop loss levels
  11. Review recommendations – the post mortem

His current views and concerns include: falling leading indicators globally, falling economic surprise index, bond and stock divergence, and divergence of the U.S. 10-year yield to the copper/gold ratio.

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)

James Brodie, CMT

James Brodie, CMT

2019 Symposium Speaker Summaries: Point & Figure Chart Construction – Tracking Supply and Demand

2019 Symposium Speaker Summaries: Point & Figure Chart Construction – Tracking Supply and Demand

Speaker: Tom Dorsey

Tom’s career began in 1974 as a stock broker for Merrill Lynch, just at the end of the worst bear market since the Great Depression. Early in his career he read “How to use the Three-Point Reversal Method of Point & Figure Stock Market Trading” written by A.W. Cohen. In it he found the basic premise of P&F charting: “the Law of Supply and Demand, and nothing else, governs the price of a stock.” This was the motivation he had for founding Dorsey Wright & Associates.

Tom explained that what we do in the stock market is essentially the same as the forces that drive produce prices in the supermarket, supply and demand. Point & Figure charts depict the battle between supply and demand. He walked the audience through how one plots a basic P&F chart using the three-box reversal method. Tom said, “P&F charts shout at you when other

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)

Brett Villaume, CMT, CAIA

Brett Villaume, CMT, CAIA

2019 Symposium Speaker Summaries: Future Trends in Investment Management

2019 Symposium Speaker Summaries: Future Trends in Investment Management

Speaker: Stavros Iatridis

Stavros strongly believes we are on the cusp of dramatic changes in our industry. We are seeing slower growth and a continued decline in the workforce as global population growth is decelerating and the global population ages. Japan’s population peaked in 1989, the same year as the peak in the Nikkei, and the subsequent declining and aging population is now a global phenomenon.

Also, money velocity is declining as M2 falls. An overlay of the Fed funds rate against the Japanese base rate shows a high correlation with the collapse of their curve, and he expects the Fed funds rate to head shortly back towards zero.

He highlighted the work here by Richard Koo who believes Western nations are unable to raise rates against the backdrop of increasing debt. With 83% of the world’s wealth stuck in public markets of slow growth and rising debts, Stavros believes we must expect low

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)

James Brodie, CMT

James Brodie, CMT

2019 Symposium Speaker Summaries: Integrating Technical Analysis into a Fundamental Framework

2019 Symposium Speaker Summaries: Integrating Technical Analysis into a Fundamental Framework

Speaker: Blaze Tankersley, CMT, CFA

There is a myth that technicals and fundamentals should be separate, but Blaze’s take on this logic is that “technical things happen for fundamental reasons.”  There’s been a secular change in market structure – the shift towards algorithmic trading is the driver blending fundamentals and technicals.

“Fundamental discretionary traders account for only about 10% of trading volume in stocks today,” said Marco Kolanovic of JP Morgan.  The market’s largest player, the algo, is 100% technical, so we need to make the algo our friend and understand it.  We need to know how algos work in order to compete.

Blaze notes the importance of volume confirmation in conjunction with price action when executing a fundamental idea.  He said: “Let the #1 analyst of all, the market, do your work for you.” In other words, use that information to your advantage.

We need to know the role algorithmic and systematic program traders

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)

Salma Abdulla, CFA, CMT

Salma Abdulla, CFA, CMT

2019 Symposium Speaker Summaries: Technical Market Analysis: Industry Perspectives

2019 Symposium Speaker Summaries: Technical Market Analysis: Industry Perspectives

Speaker: Michael Santoli

As the opening presentation of the CMT Association’s 46th Annual Symposium, Mike Santoli presented his view of Technical Analysis over the course of his career, explaining how the discipline has become more mainstream and relevant today than it was when he started.

The financial media often associates market moves with a news narrative, which is a source of frustration for most technicians. Compared to when Mike started in the industry, there is less “inside information” today — there’s still info getting out, but there’s less of a structure around the flow of insider information than before.  While there has always been skepticism around Technical Analysis (performing a search for “technical analysis” and “voodoo” provides hundreds of articles), technicians have very clear systems that explain price action much better than the narratives that emerge from the financial media.

An example of the slower information flow back in the early 90s was

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)

Brett Villaume, CMT, CAIA

Brett Villaume, CMT, CAIA

2019 Symposium Speaker Summaries: The Role of Technical Analysis in Portfolio Construction and Position Sizing

2019 Symposium Speaker Summaries: The Role of Technical Analysis in Portfolio Construction and Position Sizing

Speaker: Louis Llanes, CMT, CFA

Topic: How do quantitative technical techniques improve decision making for portfolio managers in a multi-disciplinary environment?

Goal: to improve portfolio construction, position sizing and managing risk.

Problems with only looking at the Fundamentals 

  1. Fundamentals continue looking good but the stock keeps falling…you only later find out there is a hidden problem that destroys your fundamental thesis.
  2. Fundamental outlook deemed attractive but the stock continues down for a number of years before it gets recognized (i.e. it’s dead-money)
  3. The investment appears overvalued but continues to rally and you miss out on significant gains (you get out too early)
  4. A stock breaks out while the fundamentals appear horrible.  You then find out the company is making a huge comeback

The Lesson learned from being “fundamentals only” is that as an analyst, it assumes my analysis is smarter than the market. 

Louis’ Process centers around thinking about his thinking as a fundamental analyst.  How do you make

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)

Salma Abdulla, CFA, CMT

Salma Abdulla, CFA, CMT

“Ethics” Video Series Available from CFA Institute

“Ethics” Video Series Available from CFA Institute

CMT Association members know that the Association has adopted the CFA Institute Code of Ethics and Standards of Professional Conduct.  The CMT Association website reads, in part:

Code of Ethics and Standards of Professional Conduct (Code and Standards) are fundamental to the values of any profession. Following a recent partnership agreement, the CMT Association and CFA Institute now follow a single Code and Standards benefiting the global financial community by setting high standards of education, integrity, and professional excellence. …

This licensing agreement makes all of the CFAI’s Code and Standards developed over several decades available to CMT Association members. …

In addition to the Code and Standards, CMT Association members have access to the CFA Institute’s Standards of Practice Handbook which contains detailed discussion and case studies related to the Code and Standards.

A series of videos explaining each item in the Code and Standards is

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)

Stanley Dash, CMT

2019 Annual Meeting Notice

2019 Annual Meeting Notice

The Annual Meeting of the CMT Association, Inc. membership is fast approaching and will take place on Tuesday, June 11, 2019 at 10:00 am New York Time. Online proxy voting for the annual meeting opened May 9 and run through June 9. Members should have already received a detailed invitation with instructions.

The Annual Membership Meeting this year will be conducted on-line. Here is the link to register. The Annual Meeting webcast is open to all Members of the CMT Association.

Agenda

Order of Business

Approval of the Minutes

  • From the June 12, 2018 Annual Meeting

Reports by the CMT Association

  • Scott Richter, CFA, CMT, CHP, President
  • Alvin Kressler, Executive Director & CEO

Election of CMT Association Directors for fiscal year starting July 1, 2019

In accordance with the CMT Association Constitution, the CMT Association Leadership Development Committee has presented the following slate of candidates for Director positions for terms as indicated below. Members should vote “YES”, “NO”, or

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)

Robert Palladino

Robert Palladino, CMT

Membership News for May 2019

Membership News for May 2019

The CMT Association would like to congratulate the following members on their new positions: 

  • Miguel Rito, Trainee Departamento Comercial at Juniscap Business Solutions
  • Michael Stroud, CFP, CMT, Investment Solutions Representative at Fidelity Investments
  • Michael Vinokur, CMT, Portfolio Manager at MV Wealth Partners of Aligned Capital Partners Inc.
  • Vishal Mehta, CMT, Independent Trader at Stealth Mode
  • Matthew Caruso, CFA, CMT, Co-Founder at Inovai Consulting

CMT Updates

Score Reporting ProcessThe results for the CMT Level I and II exams are communicated as quickly as we can possibly verify the results and upload the scores to our database. This process may require six to eight weeks. CMT Level I and CMT Level II exam scores will be emailed to the candidates by Prometric and will include a performance analysis report.

CMT Level III exam results require a manual grading process and therefore take longer. They are generally made available approximately eight weeks from the exam date. CMT Level III

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)

Marie Penza

New Educational Content This Month