
LETTER FROM THE EDITOR

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What's Inside...
MAGAZINE COVERS AT MARKET TURNS?
by Thomas Vician, CMTSkewed sentiment is an important coincident indicator at market turns. By definition, financial markets are most bullishly optimistic at major tops and most bearishly pessimistic at major bottoms....
TRADE LIKE A STOCK MARKET WIZARD - HOW TO ACHIEVE SUPERPERFORMANCE IN STOCKS IN ANY MARKET BY MARK MINERVINI
by Lance McDonald, CMTMark Minervini’s new book Trade Like A Stock Market Wizard – How To Achieve Superperformance In Stock In Any Market (McGraw Hill, 2013) is a look into the mind and strategy of a top stock...
WHY IS MY STOCK GOING DOWN? THE SUPREME FUNDAMENTAL
by Mark MinerviniEditor’s note: This was originally published at Mark Minervini’s Official Blog and is republished here with permission. “What’s making the market go up?” “Why is my stock going...
GEORGE LINDSAY TRAINING COURSE: 1921- 1942 LONG CYCLE BY ED CARLSON, CMT
by Michael Carr, CMTGeorge Lindsay’s work was largely lost to time until several years ago when Ed Carlson located old newsletters and pieced together the methods that Lindsay used. The reason Lindsay’s work was...
EQUITIES, BONDS, AND THE DOLLAR: A STRATEGIC ANALYSIS
by Rafael Diamond, CFAEditor’s note: This report was prepared by Archaea Capital Research for release in October 2013 and is reprinted here with permission. It begins with comments made by leading figures in investment...
CHART OF THE MONTH: INDICATOR SUMMARY
by Susan BergerEditor’s note: This was originally published in the beginning of October and is republished here to demonstrate how effective chart analysis can be. The NASDAQ is a classic Major Base Breakout and...
Skewed sentiment is an important coincident indicator at market turns. By definition, financial markets are most bullishly optimistic at major tops and most bearishly pessimistic at major bottoms. Magazine covers can act as a sentiment thermometer at market turns of different time constants. Covers are one tool hanging in the trader’s workshop that can help spot a heavily bunched herd. With this white paper, I intend to place a general, stylized framework around the use of magazine covers as contrarian market indicators to better define their usefulness. Topics include: magazine types, magazine cover content, and the noise problem.
Magazine Types
The most coincident covers tend to come from broad, national news/commentary magazines because they rarely touch upon economics and mirror hot trending topics to draw the widest viewership. Time and Newsweek fit this category. Both appeal to a vast common audience and channel the current public zeitgeist in their cover
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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)

Thomas Vician, CMT
Tom Vician, who holds the Chartered Market Technician (CMT) designation, manages fully quantitative fixed income, broad equity, and dividend income programs along with a semi-systematic growth equity strategy for the $100M SHC Financial. This includes system design,...
Mark Minervini’s new book Trade Like A Stock Market Wizard – How To Achieve Superperformance In Stock In Any Market (McGraw Hill, 2013) is a look into the mind and strategy of a top stock trader. Minervini will be a recognizable name to many whether they know him as a 1997 U.S. Investing Champion, a regular guest on financial television or being in the elite group of
traders to be featured in Jack Schwager’s Stock Market Wizard series of books.
Minervini goes beyond strategy and throughout the book sprinkles wisdom gained through decades of experience, along with motivation. It is like having a coach giving you “atta boys” as you learn a new skill. This is a very quotable book, so have a fresh highlighter when you read it.
The core of Minervini’s investment success is what he calls the SEPA Strategy, which 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)

Lance McDonald, CMT
Lance McDonald, CMT is a technical analyst at Lexington Capital, LLC, which he founded in 2011. Lance has been investing in stocks, futures, and FOREX since 2003, and has been publishing market views since 2006. Prior to the creation of Lexington Capital, LLC, Lance worked for...
Editor’s note: This was originally published at Mark Minervini’s Official Blog and is republished here with permission.
“What’s making the market go up?” “Why is my stock going down when the company has a great product and they just reported good earnings?” I’m asked questions like these all the time. Making money and controlling risk depends far more on discerning a stock’s probable price direction than knowing the “why” behind that movement. Indeed, often you will learn the “why” well after the opportunity to avoid loss or reap gain has passed. The only true answer for why your stock is moving up or down is that more dollars are bidding than offering and vice versa.
Armed with an appreciation of the law of supply/demand, you can learn how to position your portfolio in stocks that have a good chance of attracting willing buyers who will bid your shares up—even though you may
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)

Mark Minervini
Mark Minervini is a technical analyst, acclaimed author, instructor, and independent trader. He has over 30 years of experience in finance, and was featured in Jack Schwager's Stock Market Wizards; Conversations with America's Top Stock Traders. Schwager wrote: "Minervini's...
George Lindsay’s work was largely lost to time until several years ago when Ed Carlson located old newsletters and pieced together the methods that Lindsay used. The reason Lindsay’s work was lost was simply that he had never published a comprehensive description of how he forecast price moves. Instead, Lindsay wrote newsletters that offered real-time examples of his work. His forecasts were accurate and his work was important but like many analysts from that time, his work was not fully explained.
Ed searched for copies of those newsletters and confirmed that Lindsay’s work was useful. He also discovered that Lindsay’s work was difficult to understand. Lindsay was a great market forecaster but he was not great at writing about what he did so that others could apply his techniques. In the past several years, Ed Carlson has done his best to correct 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)

Michael Carr, CMT
Mike Carr, who holds a Chartered Market Technician (CMT) designation, is a full-time trader and contributing editor for Banyan Hill Publishing, a leading investment newsletter service. He is an instructor at the New York Institute of Finance and a contributor to various...
Editor’s note: This report was prepared by Archaea Capital Research for release in October 2013 and is reprinted here with permission. It begins with comments made by leading figures in investment analysis and builds on those ideas to develop unique insights into the economy and the markets. It is reprinted here as an example of how charts and intermarket analysis can be applied to economic analysis.
Reflecting on Bill Gross’ recent investor letter re: Ray Dalio’s “Beautiful Deleveraging”
“The last time the U.S. economy was this highly levered (early 1940s) it took over 25 years of 10-year Treasury rates averaging 3% less than nominal GDP to accomplish a ‘beautiful deleveraging.’” – Bill Gross
Starting with the big picture.
We constructed this chart of the S&P, U.S. Nominal GDP Growth, and U.S. 10-Year Treasury Yields:
- Since the 2000 peak in Stocks, the U.S. has experienced two major deleveraging / deflationary
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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)

Private: Rafael Diamond, CFA
Rafael Diamond, CFA, is Founding Partner of Archaea Capital Research. Archaea specializes in discretionary and quantitative macro investment analysis for institutional investors. Archaea employs proprietary global macro, asset allocation, fundamental, quantitative, and technical...
Editor’s note: This was originally published in the beginning of October and is republished here to demonstrate how effective chart analysis can be.
The NASDAQ is a classic Major Base Breakout and you would expect to see the uptrend continue.
On the weekly chart, you can see that the trend is accelerating. The huge percentage blast out of tight trading ranges propelled a lot of large cap stocks recently. It looks like the acceleration will continue.
The S&P 500 also broke out of a Major Base and should continue to go higher.
The uptrend continues to be intact 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.
Contributor(s)

Susan Berger
Susan Berger worked with John Magee from 1968 until his retirement and then worked as a technical analyst at Fidelity Investments. She now provides independent research and additional information can be found at
New Educational Content This Month
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December 10, 2020
Using Pattern Recognition in Contraction and Expansion Phases
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December 2, 2020
Identifying Opportunities and Managing Risk with the Tactical Composite Trend Model
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November 25, 2020
Optimizing Inefficiencies in Technical Analysis
Presenter(s): Jake Wujastyk