Technically Speaking, November 2018

From the Editor

Well, October certainly lived up to its spooky and quite volatile reputation. From leading momo tech stocks tanking to multiple multi-percentage point intraday moves everywhere else, I am sure antacid makers made a tidy profit. Of course, coffee, sugar and crude oil had their own action and did you see palladium’s all-time high?

This is my second edition of the new Technically Speaking and once again I must ask for volunteers to help us deliver a well-rounded offering with:

  • seminar reviews
  • book reviews
  • software reviews
  • articles on how you analyze, trade or “do” the technical analysis business
  • suggestions for interviews with industry titans
  • your own career move announcements.

Drop us a line at We welcome everyone, including newly minted members.

In this edition, we offer another of our member interviews with Phil Roth, CMT, a legend in the field and one of the most generous members with his time. And if I have not hit you over the head enough about getting involved, I’m re-running a piece I did a while ago called “Thoughts on Volunteering.”

We also have part 2 in a series that ran back in the 1990s called “Lessons from Dead Pilots,” written by Mark Eidem CMT, CFA, which gives a fascinating comparison with traders. And a report from Clint Sorenson, CMT, CFA on how an investment advisor incorporates technical analysis into an otherwise fundamentally-driven business.

Rounding it all out will be news from around the association – chapters, strategy, CMT news and events.

Michael Kahn, CMT

What's Inside...

President’s Corner

This is your association and it is important that you let us know what you think.

Let me ask an...

Read More

Factor Investing is Simple but Not Easy

Summary of Wes Gray, PhD Presentation to the Denver Chapter

Wes Gray, PhD, the founder of Alpha Architect,...

Read More

New York Chapter Meeting - Speaker Summary

The New York chapter of the CMT Association met October 18, 2018 with featured speaker Craig Johnson, CMT, CFA, Managing...

Read More

Paul Desmond Memorial

Paul Desmond, the President of Lowry Research and one of the most influential figures in technical analysis over the past...

Read More

Judgment for Traders: Lessons from Dead Pilots, II

Originally published August 2000

Last month, I examined the parallels between flying and trading; especially how the process of judgment...

Read More

Thoughts on Volunteering

The following originally ran in the March 2007 newsletter. Forgive the references to the MTA.

I had the honor of...

Read More

Note for CMT Candidates

As we approach the next administration of the CMT exams, here are a few reminders for our candidates.

  • By...
Read More

Chapter Report: Toronto, October 2018

The Toronto area is one of the hotbeds of technical analysis in North America. Southern Ontario is home to the...

Read More

How an Investment Advisor Uses Technical Analysis

While CMT Association members know the value of technical analysis, there are still many areas of the money management business...

Read More

Member Interview – Phil Roth, CMT

Phil Roth, CMT, retired in 2012 from a 46-year career writing technical research but that has not slowed him down....

Read More

Chapter Report: Minnesota, Fall 2018

The Minnesota chapter met on Ralph Acampora’s farm on October 28. It was a wonderful time to relax, take in...

Read More

Submissions for The Dow Award Are Now Open

The 2019 Dow Award, which highlights outstanding research in Technical Analysis, is open for submission! Since its first year in...

Read More

President’s Corner

This is your association and it is important that you let us know what you think.

Let me ask an important question: What do you think about the CMT Association, and would you please take the time to share your thoughts with us?

Why do I ask?  We, as an organization, want to get better at serving our members’ needs.  We want to be responsive as possible to what is happening in your world, literally!

This is not just idle talk. We mean it.

While our Board is forward-thinking and has good intentions, our plan for the future is solid and our staff is competently executing our plan, we don’t know everything at the grass roots level. We do our best but our intelligence can be incomplete.  That’s where we need your help.  That’s why we need you to take this request seriously. 

There’s only one ground rule – think BIG!  How could we better serve our members in a better, more timely way?  Think three to five years.  Where do we need to be?  What do we need to do now to get us there? How do we effectively grow our organization across the world?

[Note: For smaller day-to-day issues, please contact the staff to discuss.  They will be glad to help you!]

With respect to your thoughts about the CMT Association and our strategic (3-5 year) plan:

  • What CMT Association membership benefits are most valuable to you?
  • Are there other membership benefits that would add value to you professionally?
  • Do you find the content we produce (e.g. webcasts, Technically Speaking, chapter events) relevant and insightful?
  • Is there other content you want to see in our programming and publications?
  • Does our brand marketing, communications, and industry positioning resonate with you?

Now, with respect to getting your ideas to us, ACT!  Put it on your to-do list.  Make it a priority!  Don’t wait!  Have a plan to get us your feedback. Don’t assume someone else will – or that someone else has better ideas.  We want to hear from you! 

When you have your ideas ready, please email me at or, if you prefer, answer a 5-question online survey.   I promise we will review and respond to your feedback.  Again, think BIG and provide some reasoning for your ideas. 

I appreciate your thoughtful submissions!  Together we can make our CMT Association better for all members!  Continued success and prosperity!




Scott G. Richter, CMT, CFA, CHP

Scott Richter, CMT, CFA, CHP is a senior portfolio manager for Westfield, which manages over $4B in AUM.  He is the lead portfolio manager for alternative assets and is also responsible for investments in the energy and utility sectors.  He was formerly...

Factor Investing is Simple but Not Easy

Summary of Wes Gray, PhD Presentation to the Denver Chapter

Wes Gray, PhD, the founder of Alpha Architect, spoke to the Denver chapter of the CMT Association in September.  Alpha Architect is an investment management firm grounded in academic and quantitative research with an emphasis on educating investors and managing money.  Wes Gray earned an MBA and PhD from the University of Chicago and a B.S. from Wharton.  His PhD advisor was Nobel Laureate Eugene Fama.

A Practical Academic

Wes delivered his presentation with straight talk and a refreshing practical approach.  Attendees were from varied backgrounds including members of the CMT Association, and CFA Association and QWAFAFEW (Quantitative Work Alliance for Applied Finance, Education, and Wisdom) organizations. This led to a detailed question and answer session bringing nuances to light about turnover, taxes, and investor behavior.

Much of Wes’ presentation surrounded his belief that investors can beat the market by exploiting investor behavior from career risk, and closet indexing.  He emphasized the two most important factors of quant investing in equities – value and momentum.  He summarized research that suggests that both of these factors can add excess returns to the bottom line after transaction costs and taxes

Even God Can’t Remove Risk

According to Wes, in order to reap excess returns, a certain amount of pain is necessary.  Investors can concentrate significantly in stocks that possess value and momentum factors to capture excess gains over the long run.  With that said, when investors take this approach, the tracking error from the benchmarks can be huge, lasting for multiple years.  Many investors can not stomach the pain. 

His investment philosophy is summarized in the following formula:

High Risk Strategies + Tough to Exploit Mispricing = Excess Returns

Wes used an example of managing money with perfect hindsight, buying only the very best performers.  Even with this foreknowledge, the drawdowns in performance were huge.  Another example is the performance of Warren Buffet, the famed investor in Omaha.  An analysis of his track record revealed multiple large drawdowns in the 50% range.  These examples punctuate that when it comes to outperforming the market – no pain, no gain.  This leads investors to the need for managing their own behavior. 

Outperformance from Education

Wes believes that education is critical to reap rewards from value and momentum factor investing.  An investor that is well educated will be more likely to understand the risks of factor investing and to stomach the long periods of time when they underperform.  For this reason, Alpha Architect invests a larger amount of their time and resources in educating investors.  Their website blog is filled with articles written about factors, performance, risks, and other morsels of delight for those people who are quant-inclined.

Career Risk Leads to Closet Indexing

Wes pointed out that many managers are concerned about “career-risk” which keeps them from managing concentrated portfolios.  Managers have an incentive to weight sectors more closely to the index and to invest in too many stocks.  Managers are less likely to lose their job if they perform similar to the index while not severely underperforming.  If a manager significantly underperforms for several years, investors and consultants are likely to pull the plug and exit the portfolios at the wrong time.  This tendency leads to “closet indexing” as managers hug the benchmark weights and managed tracking error to be smaller than required to make excess returns. 

On the other hand, a disciplined investor willing to think long term, can stick to their guns so they have a chance to beat the market by a wider margin.  Part of the strategy of Alpha Architect is to concentrate on fewer holdings and to rebalance frequently.  This technique is implemented in exchange traded funds which may hold closer to 40 or 50 stocks.  This approach is a stark contrast with many ETFs that hold more stocks with a moderate tilt toward momentum and value factors.  This, of course, waters down the return and creates a return stream that is much closer to the index

Turnover, Taxes, and Concentration

The table below shows the compounded annualized returns of value and momentum portfolios from 1970 – 2016.  They are tabulated by the number of stocks in the portfolio and how often the portfolio is rebalanced.  The returns clearly show that excess returns are higher in portfolios with less stocks that are rebalanced more often.  But this leads to the question of taxes for individual investors. 

Typically, investors assume that higher turnover leads to short term gains which is taxed at a higher rate and thus reducing after-tax returns.  Wes pointed out that exchange traded funds can dramatically reduce taxes, even with higher turnover and large realized gains.  Due to the nature of the various entities and accounting methods, gains are not distributed as much to ETF holders.   If these accounting standards remain, investors could benefit from higher excess returns from faster turnover with less stocks without losing a large portion to taxes.

The tables also illustrate the effect of closet indexing.  Value and momentum strategies that have more stocks with lower turnover tend to perform very closely to the index.  This approach has historically aligned with many of the ETF vehicles in the market today.  Wes believe this is a key differentiator of his ETFs.

Value Portfolios & Momentum Portfolios

Crisis Alpha and Managing Systematic Risk

Wes also touched on strategies for reducing systematic stock market risk by using long-term moving averages, as well as by diversifying into managed futures portfolios that have low correlation to equities.  Both of these strategies can add value but in two different ways. 

First, managed futures can provide “crisis-alpha.” Crisis alpha is a term coined by Kathryn Kaminski, who also spoke to the Denver Chapter a few months earlier.  The concept is that trend-following futures contracts in a widely diversified universe, both long and short, can have large returns when volatility increases.  The good news is that volatility tends to increase when equities decline. This leads to a smoother return stream in the context of a diversified portfolio of equities and managed futures. 

Second, managing systematic risk by hedging portfolios when the momentum of the market shifts negative.  This can be accomplished with simple moving average indicators.  This technique attempts to reduce systematic overall market risk that can not be diversified away in the equity markets.  In short, a combination of increased diversification and the management of overall stock market risk can potentially add value compared to a long only equity strategy.


Wes Gray’s presentation challenges the common belief of many portfolio managers and the industry as a whole. Specifically, turnover can be good, taxes can be managed more effectively in active strategies through ETF, and concentration is important. 

He also emphasized that career risk and other investor behaviors make it difficult to implement factor investing.  It takes mental and emotional fortitude to carry through and hold on to your strategy when times get tough.  He noted that in order to outperform it is inevitable that severe drawdowns will occur. 

Finally, he made some important points regarding diversification through managed future and lowering overall stock market risks through hedging.  All in all, this was a superb presentation that can help both individual and institutional investors improve their own playbook for making money in the markets.


Louis Llanes, CMT, CFA

Louis Llanes is a technical analyst and the Founder & Managing Principal of Wealthnet Investments, LLC. Wealthnet is an asset management and research firm. In 1997, Louis founded Blythe Lane Investment Management and later merged the firm with Centric Investment Group, which...

New York Chapter Meeting - Speaker Summary

The New York chapter of the CMT Association met October 18, 2018 with featured speaker Craig Johnson, CMT, CFA, Managing Director and Senior Technical Research Analyst at Piper Jaffray. He is also Chapter Chair of the Minnesota Chapter and a past President of the CMT Association. The Dow closed at 25,379 that day and the S&P 500 closed at 2769.

Craig was able to set aside some time from his busy trip to stop by the CMT Association NY office and fill us in on some of his most recent work. After being bullish for the vast majority of the longest bull market on record, Craig has been looking for some more volatility this past year. This is based on a number of concerns.

Fixed Income: Treasury yields put in a double bottom on long term charts and rising rates will now act as a headwind if the speed of the rise is not contained. A nearly flat yield curve hasn’t been helpful either. Credit spreads remain healthy but will be closely monitored.

Weakening Breadth: Stock market participation narrowed over the past few months, as measured by Craig’s 40-week technique, which is the number of stocks trading above the 40-week moving average.

Global Performance: Major global indexes have seen more intense sell offs than the U.S. with the Shanghai Composite in China 20% off its highs and taking out a major trendline support. The DAX in Germany was down 13% and took out the neckline of a head-and-shoulders top. This implies another 13% to the downside. And many emerging markets have been broken for quite some time. Can the U.S. continue to outperform to such a degree with the rest of the world trading so poorly?

Craig’s predictions were for the S&P to find some support in the high 2600s on the S&P with the potential to break down to a major support line at 2500 in the short term. However, there is still room for al rally to finish at 2850 by the end of the year.


Mike Sroga, CMT

Mike Sroga, who holds a Chartered Market Technician (CMT) designation, is a Convertible Bonds Trading Associate at Jefferies. Previously, he was an institutional trading professional at Needham and Co. He uses technical analysis on a daily basis to provide optimal execution for...

Paul Desmond Memorial

Paul Desmond, the President of Lowry Research and one of the most influential figures in technical analysis over the past half century, passed away on Oct. 1, 2018.

Paul’s beginnings with the Lowry Analysis started in the periodical room of a library in Miami, Florida. He was intrigued by the way L.M. Lowry’s unique methods revealed the forces of Supply and Demand at work, providing unbiased evaluations of stock market conditions.

In 1964, Paul learned that L.M. Lowry’s offices were located nearby. Determined to meet the man in person, Paul drove across town to find only a locked front door and a lonely gardener trimming a row of hedges. Dismayed, Paul left. When he returned a short time later, however, the gardener was still at his task. Paul approached him, inquiring whether he knew where he could find Mr. Lowry. The gardener responded: “You’ve found him,” extending his hand to introduce himself as L.M. Lowry. 

From those early beginnings, Paul dedicated his professional life to the stewardship of Lowry Analysis and the study of technical analysis. Paul worked alongside L.M. Lowry for eight years until 1972, when he purchased Lowry Research. For the next 46 years, Paul served as the company’s President, making groundbreaking research advances, and becoming a world-renowned authority in technical analysis.

Paul was known as a “technician’s technician.” His accomplishments and accolades were many, including:

  • Winner of the 2002 Charles H. Dow Award for his work on Lowry’s 90% Upside and 90% Downside Days.
  • Winner of the 2009 Technical Analyst of the Year award from Technical Analyst
  • Frequent contributor to major financial news outlets, including Barron’s, The Wall Street Journal, Wall Street Week, CNBC, Yahoo! Finance, and Fox Business News.
  • President of the Market Technicians Association from 1997 to 1999.

In addition to his extensive work on Lowry Analysis, Paul launched two money management operations: Lowry Financial Services Corporation (sold in 1990 to Pacific Mutual Life Insurance Co.), and Lowry Capital Management. 

Perhaps Paul’s greatest legacy, however, was the generosity of spirit he gave to training and mentoring financial professionals of all stripes—from those cutting their teeth in technical analysis, to the world’s most influential and successful money managers. He had a unique ability to elucidate even the most complex issues. His ability to educate people on financial markets through the simple lens of Supply and Demand will be among his most enduring accomplishments. 

We at Lowry are committed to carrying on Paul’s legacy as an independent and objective provider of technical analysis to our subscribers and financial community.


Richard A. Dickson

Richard A. Dickson, former Senior Market Strategist, Senior VP and market commentator for Lowry Research, was a technical market analyst for more than 33 years. His analysis emphasized longer-term market trends and prioritized the identification of major changes in market leadership. Prior...

Judgment for Traders: Lessons from Dead Pilots, II

Originally published August 2000

Last month, I examined the parallels between flying and trading; especially how the process of judgment is identical for pilots and traders.  I also introduced “The Five Hazardous Attitudes” that each of us possess to some degree, as well as how to deal with the hazardous attitudes that affect us individually.

This month, I will examine the three factors that comprise the “Judgment Environment,” or the framework within which pilots and traders make decisions.  I will focus closely on the “human factors” and introduce a method to evaluate the status of our individual readiness for decision-making on any given day.

The Judgment Environment

There are three aspects to the framework pilots and traders operate within to make decisions.  The first is Environmental; those things that define or affect the big picture, such as the weather for a pilot or the markets for traders.  The second aspect is Mechanical; things that affect our airplanes or offices, our flight instruments or computers.  Finally, the third aspect is Human; things that affect us individually and could cause us as pilots or traders to perform poorly. 

Environmental Factors are the big picture items we cannot control in any way.  However, we need to be aware of how these uncontrollable factors affect our psychology and hence our judgment.  We need to be aware of how we react emotionally to either positive or negative environments.  How does either stress or elation affect our judgment and thought processes? 

Just as we did last month to determine which of the hazardous attitudes affects us to the greatest degree, we must examine some of our trades that did not work out as expected.  In this case, look primarily at trades that originally went according to plan but then were derailed by an unexpected adverse move in the markets.  How did you react?  If it was a simple long or short, did you honor your stop?  More importantly, is there a pattern to your reactions in similar situations? 

Mechanical Factors are those things that either work or do not work.  For the pilot they are the operational condition of his airplane – the engine, instruments, radios, etc.  Airline pilots spend the majority of their training time in simulators flying aircraft with one or more system failures.  This training has two purposes: to master the procedures required to overcome the system failure as well as to instill confidence and minimize the emotional reactions in the event of an actual system failure in a real aircraft. 

For the trader, Mechanical Factors are the communications, computer and data feed systems.  We can take a page from the airline pilots guide to minimizing potential judgment errors regarding Mechanical Factors.  First, make sure we have backup systems that are truly independent.  As an example of independent, I mean a backup system that will not be affected by the same major problem – a power failure for instance. 

In order to minimize potential errors in judgment induced by Mechanical Factors” we need to exercise our contingency plans just as airline pilots do in their simulator training.  Occasionally we need to implement a simulated failure of our primary systems and actually use the backup phone, computer and data feed systems.  Just like the airline pilot, we instill confidence and minimize the emotional reactions in the event of the real thing by knowing that our backup systems really work.

Human Factors are those things affecting the human system – us.   Pilots use acronyms as simple devices to remember things – a mental checklist, if you will.  They love acronyms:  ARROW, CIGARS, GIRLS and GUMPS to cite a few.  There is even an acronym to evaluate our status with regard to the major “Human Factors” that will degrade our performance: I’M SAFE

I Illness Am I feeling poorly in any way?
M Medication Am I taking anything that could impair my performance?
S Stress Am I under any ABNORMAL life stress? 
A Alcohol Am I under the effect (or after-effect) of alcohol?
F Fatigue Am I getting enough sleep?  Am I well rested?
E Eating Am I properly fueled for today’s effort?


It is obvious that a pilot or trader that has a cold (Illness), takes antihistamine (Medication), does not feel like eating (Eating) and slept fitfully (Fatigue) last night will not perform as well as one who experiences none of these effects.  Yet how often do we push ourselves through these situations? 

I’M SAFE should be used to evaluate our readiness for the decisions to be made today.  If we are not 100 percent ready, it may be enough to realize that we are not at our best today and therefore concentrate harder before taking action.  However, our self-evaluation may be more serious, to the point that we should take no action today if possible (Realizing that existing positions have to be managed).  There is a time to be cautious, yet tough it out and a time to realize that today is not our day. 

Pilots have a saying: “It is better to be safe on the ground wishing you were flying, than to be flying wishing to God you were safe on the ground?”  By evaluating our “Human Factors,” using I’M SAFE; training on our backup systems to minimize Mechanical Factors; and being aware of how Environmental Factors affect our decisions we as traders can better judge when we should be trading and when we should be wishing we were trading.

Next month I will introduce “The Poor Judgment Chain” and tie all the pieces together by examining the tragic crash that killed John F. Kennedy Jr.

Note:  This article is adapted from a publication “Pilot Judgment,” by the Federal Aviation Administration, now out of print.


Mark Eidem, CMT, CFA

Mark Eidem, who holds the Chartered Market Technician (CMT) designation, is a Regional Manager with Charles Schwab Trading Solutions. He is a 1978 graduate of West Point and was previously a retail broker in Anchorage for over a decade. He has served as...

Thoughts on Volunteering

The following originally ran in the March 2007 newsletter. Forgive the references to the MTA.

I had the honor of moderating a “walkabout” table at the recent MTA winter retreat in Miami Beach with the topic of “The MTA.” For those who do not know, the walkabout is a takeoff of the Australian journey of discovery, brought to us by the late Ian Notley. At the seminar, attendees are guided from table to table to not only discuss various topics in technical analysis but to quickly meet dozens of colleagues in short order. Think of it as the MTA’s version of speed dating.

One fact dawned on me as we pondered the things we liked about the MTA and the things we could do better. It was my own personal journey from seminar exhibitor to member to the Board of Directors. Along the way, I joined a few committees, ran the newsletter for four years and was part of numerous planning and management meetings.

I was part of the marketing team that designed and purchased the MTA’s first tradeshow booth and exhibited at the Futures Expo in Chicago several years ago. I have been a judge for the Charles H. Dow award representing Barron’s and the MTA at various times. I have been on the Awards committee. That’s a lot of “I” but it is really a lot of volunteering for the MTA.

I have also had the privilege of knowing just about every person of fame in our profession – at least the ones that were active in the late 1990s and beyond. Go ahead, name someone. They know me, too and not because of whom I am. It is because of how I have participated in the organization.  There is no doubt in my mind that I can contact the giants at any time to ask a question or solicit help with any MTA issues. And while not a giant myself, I plan to pay that forward to any member or affiliate.

Past President Fred Meissner, after years of dedication to the MTA, has decided put himself back into service yet again by becoming “Volunteer Czar.” He will be encouraging members and affiliates to get involved and streamlining the process for both them and the areas of the organization that need their help. I urge everyone to contact him before he contacts you to tell him that you want to do something. Join a committee. Take a survey. Comment on the library, the office, things you like and do not like.

My own term on the Board of Directors will end in June but my involvement will not. I credit the MTA for many of the good things that have happened to me professionally – maybe not for a job but certainly for networking and knowledge. 

My message is to get involved and not to wait to do it. If you think you are too new or too unimportant in the profession – which you are not – then what better way to boost your profile and your skills than by working directly with the veterans of the MTA?

Serve on a committee. Visit the new office in New York. Attend a seminar. And if you are really passionate, serve on the Board of Directors. The old timers want your ideas and your energy even if you are still a newbie to the business.

Do something. Get involved. You never know where it might lead.


Michael Kahn, CMT

Michael Kahn, who holds a Chartered Market Technician (CMT) designation, is a seasoned financial services strategist, analyst, columnist, educator and speaker.  Michael has been working with charts and technical analysis since 1986. He is the author of three books on technical analysis...

Note for CMT Candidates

As we approach the next administration of the CMT exams, here are a few reminders for our candidates.

  • By now, you should have reserved your seat at a test center near you. If not, do so as soon as possible.  Contact the CMT Association staff if you need assistance.
  • Time allotted for the exams is two hours for Level I and four hours for Levels II and III. (There are some extra notes for Level III candidates in the CMT Candidate Network.
  • Questions on the Levels I and II exams are all multiple choice. Level III has some multiple-choice questions but is mostly short answer.
  • The results of the Levels I and II exams are scheduled for release the week of January 16. We understand that candidates are anxious for the results, but this delay is important in reviewing and verifying the exams.  Level III results will be released in late January, following grading by a team of select charterholders overseen by subject matter experts.
  • Undoubtedly, candidates are busy studying during these final weeks before the exams. But Level III candidates should also consider starting the application process for professional membership  In addition to passing the three exams, professional membership status is required before being granted the CMT charter.  Many of those who are successful on Level III have yet to begin this process – but there’s no need to wait until after the exam before arranging for sponsors and submitting your application.

Good luck on the exams!


Stanley Dash, CMT

Stanley Dash is the CMT Program Director at the CMT Association, a global credentialing body. In this role, Mr. Dash works with subject matter experts, candidates, and the Association’s members to maintain and improve the curriculum, the test experience, and the value...

Chapter Report: Toronto, October 2018

The Toronto area is one of the hotbeds of technical analysis in North America. Southern Ontario is home to the second largest group of CMT charter holders worldwide and we have five chapters holding regular meetings; Toronto Downtown, Oakville, Kitchener-Waterloo, Toronto North and Durham.

This summer, we were delighted to host presentations by U.S. CMT Association members Bill Strazzullo, CMT and JC Parets, CMT, while they were visiting Toronto.

This fall, we had another strong presence at the Money Show Toronto where the Canadian Society of Technical Analysts (CSTA) had a booth to promote membership and the CMT Program. A number of CMT Association members gave presentations at the show and/or volunteered at the booth, including Don Vialoux, CMT, Greg Schnell, CMT, Patrick Ceresna, CMT and Keith Richards, CMT. Thanks to everyone for your support of the technical analysis community in Canada.

We are pleased to announce that Dan Shkolnik, CMT, has joined me as Assistant Chapter Head for Toronto. Volunteering with the CSTA and CMT Association is a great way to meet other technicians and give back to the community. I encourage any Ontario CMT Association members who would be interested in helping out with one of our chapters or giving a presentation to contact us at

The Toronto Chapter continues to build relations with the Toronto CFA Society and CFA Societies Canada. Later this year, we will be holding a luncheon with Tyler Wood, geared toward promoting the CMT program and the CMT I exemption for CFA charter holders.

If you are planning a trip to Toronto and would like to meet with our members, please contact Barbara Terry,, or me


Colin Cieszynski, CMT, CFA

Colin Cieszynski, who holds a Chartered Market Technician (CMT) designation, is the Chief Market Strategist at SIA Wealth Management. He has over 25 years of experience in the financial industry, producing market commentary newsletters and trading recommendations to investors around the world...

How an Investment Advisor Uses Technical Analysis

While CMT Association members know the value of technical analysis, there are still many areas of the money management business that do not hold the same opinion. Little do their clients know that many managers and the outsourced advisors on which they rely are closet technicians.

I cannot speak for others but here is how we incorporate technical analysis in our investment advisory process, especially within the context of a business cycle framework. 

First, we start with fundamental valuations to determine the current position in the secular market cycle. However, we apply technical indicators (where price is the numerator), including cyclically adjusted price to earnings ratios and price to revenue indicators, to determine the current trend of those valuations, and relative positions to long-term rolling median values.

Next, we analyze Fed policy. We look at moving averages of the yield curve between 10-year and 3-month Treasuries to determine the trend in the curve.  It is important to know if it is flattening, steepening, or remaining static.  We also use moving averages on the 2-year Treasury yield and Fed Funds rate to determine whether the Fed is tightening or easing policy. 

As for economic growth analysis, we use the 12-month Rate of Change on several leading indicators, study the copper/gold ratio, and high yield spreads relative to key moving averages to determine the trend in economic growth. It is important to know whether the economy is growing or slowing.

Lastly, we rely on trends in market indexes and intermarket relationships such as stocks to gold, stocks to bonds, large-cap to small-cap, international developed to emerging markets, and others to determine whether market trends are supportive of risk assets.

We also incorporate relative strength between domestic and international, large cap to small cap, growth and value, high yield bonds and high-quality bonds to determine tactical tilts within our asset allocation framework. 

While we rely heavily on fundamental analysis, technical analysis still reverberates throughout every aspect in our framework.  Trend following indicators, such as moving average and relative momentum, are the most common approaches applied.


Clint Sorenson, CMT, CFA

Clint Sorenson is a Co-Founder of WealthShield LLC, and has long been dedicated to innovating and accelerating the investment landscape. His unique system leverages proprietary quantitative strategies, by fusing together behavioral finance, fundamental and technical analysis. He authored the methodology behind the Pacer...

Member Interview – Phil Roth, CMT

Phil Roth, CMT, retired in 2012 from a 46-year career writing technical research but that has not slowed him down. He is currently Vice President of the Technical Analysis Educational Foundation and an Adjunct Professor in the Graduate School of Business at Fordham University.

Members might also recognize him as Chief Technical Market Analyst at Miller Tabak + Co. and as Chief Market Technician at Morgan Stanley, Dean Witter, Shearson Lehman, EF Hutton, and Loeb Rhodes before that. He is a three-time past President of the CMT Association, as well as a former director of the New York Society of Security Analysts.

In 1966, after a year of graduate school, and out of money, Phil decided it was time to try to get a job.  He sent out resumes to many banks and brokerage firms and got exactly one response – from Merrill Lynch.  It was an invitation to its research training program.

At the end of the one-year program, trainees got the opportunity to move into jobs in research or portfolio management.  The first opening, as luck would have it, was in the technical department, working for Wall Street legend Bob Farrell.

Farrell served as his mentor and he learned quite a bit about analysis and specifically technical analysis. As they say, the rest is history.

Phil credits “The Technical Analysis of Stock Trends,” by Edwards and Magee as one of his greatest influences as he developed his understanding of technical analysis.

But he likes reading other books, as well. When he is not looking at markets, he like to read history and biographies, as well as watch films from the classic era of Hollywood.

As for his involvement in the CMT Association, Phil likes to say he was a member before there was an MTA. He helped start the MTA, although he was not a “founding member.” Bob Farrell, who was a founder, did not want his staff to join at the beginning. The reason was that Merrill Lynch had 10 technicians and he did not want the organization to be the “Merrill Lynch Technical Association.” Phil finally was able to join two years later. 

Members of the young organization learned from the master (Farrell) and from each other and from doing hands-on work with indicators.  “And I mean HANDS-ON,” Phil emphasized, because those were the days before computers. 

Roth also helped start the CMT program in the early 1980s. It took a number of years to get the program going, since many key members did not want to do it; mainly because they thought it was insulting to be tested by their peers.  I was MTA (CMT Association) President in 1989 when the first CMTs were given. 

Though there are many, Phil said that the most useful benefit of membership was the long-lasting friendships that developed with friendly competitors. He named Bob Farrell, Ralph Acampora, John Brooks, Charles Comer, Alan Shaw, Joe Generalis, Don Kimsey, Newton Zinder, David Upshaw, Bob Simpkins, Ken Tower, Bernadette Murphy, Gail Dudack, Dave Krell, Bob Prechter, Phil Erlanger, Bruce Kamich, Mike Epstein, Fred Meissner, and Paul Desmond.  Note that this “who’s who” list of industry giants includes many CMT Association Past-Presidents.

Phil has donated more of his time to the Association over the years than almost anyone else. He stepped in when leadership was needed. He spearheaded projects that needed to get done. And he served as a great advocate for both the CMT Association and for technical analysis in general.

It is hard to separate the organization from Phil. He should be an inspiration for all members.


Phil Roth, CMT

Philip J. Roth, who holds the Chartered Market Technician designation, was the Chief Technical Market Analyst at Miller Tabak + Co. from 2001 until April 2012. Phil was a Wall Street professional for 46 years, and has been in the industry for...

Chapter Report: Minnesota, Fall 2018

The Minnesota chapter met on Ralph Acampora’s farm on October 28. It was a wonderful time to relax, take in “tons of history,” enjoy a fantastic BBQ meal, visit with the horses and network with all of our great local members.

We started Ralph’s “tour of history” by walking down a path in front of the exterior north metal wall of his barn – it is 70 feet long by 16 feet high and exhibits the largest hand-painted chart of the Dow Jones Industrial Average in history (it appeared in a Wall Street Journal article, dated October 18, 2017). Specifically, it was a monthly bar chart that also depicted the seven recessions, ten Presidents, a 48-month moving average and three historic events per year, between 1967 and 2017.

It ended with the Dow literally “going thru the roof” when it crossed the 23,000 level. In 1967 the Dow traded in the 900 area and ended with the intraday high of 24,719.22 on December 29, 2017 (actually painted the metal roof). Ralph’s motto at this meeting, after his 50+ years on the Street, was: “It pays to be an optimist”.

Inside the barn, was Ralph’s framed-corked-wall (60 feet long by 10 feet high) upon which hangs American history and stock market charts, and more.

  • American revolution – many facsimiles came from Ralph’s visit to the American Revolution Museum, in Philadelphia, Pennsylvania. It contains the Colonists’ Flag, the British “Brown Bess” rife, a version of George Washington’s three-sided hat and much more.
  • S. Presidents – Ralph’s ‘bucket-list’ is to visit all the Presidents’ homes, burial sites, libraries and/or museums and he has only ten sites left to see. Versions of Presidents Abraham Lincoln’s and Harry Truman’s hats hang of hooks with descriptions of each location visited.
  • Civil War – written descriptions of all of the battles, a real canon ball, a facsimile of a Colt revolver and toy models of the Monitor and Merrimac (Union and Confederate iron-clad ships).
  • “Ralph’s First Computer” – This was an 8-foot high by 22-foot long, hand-plotted daily chart of various technical market data (DJTA, DJTA, Odd-Lot Short Sales, Advance/Decline Overbought/Oversold, 10-Day New High/New Lows, etc. dating between January 1970 thru December 1988. It was one of four wall charts that hung in Ralph’s ‘Technical War Room’ when he worked for Kidder Peabody at 10 Hanover Square, in lower Manhattan, in the 1980s. The sister chart of this large graph (the daily bar charts of the DJ Industrial, DJ Transportation & DJ Utility Averages dated between 1970 and 1988) is now in the Smithsonian Institute.
  • On the internal east door of this barn hangs four authentic New York Stock Exchange banners – one of them was created to honor the NYSE’s Bi-Centennial celebration: 1772-1992 banner.
  • A Dow Jones & Co. ticker machine that printed daily business/world event news (Broad Tape)
  • The American Stock Exchange hammer that Ralph used one day to ‘ring-the-bell’
  • MTA Banners – the former name of our CMT Association – Ralph was able to coerce the CMT administrators in New York to send him the old banners before they were discarded.

The trip to the farm has now become an annual event and Acampora promised his fellow members that they will be treated to another view of history next year. However, he told them that they will have to take off their shoes to see it because next time it will be exhibited in his carpeted farm house. The exact historical subject will remain under wraps until then for dramatic effect. So, stay tuned they all must come back in 2019. In fact, he invites all of the other members of the CMT Association to join us!

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Ralph Acampora, CMT

Ralph Acampora, CMT is a pioneer in the development of market analytics. He has a global reputation as a market historian and a technical analyst, providing unique insights on market timing and related investment strategy issues to a wide audience within the...

Submissions for The Dow Award Are Now Open

The 2019 Dow Award, which highlights outstanding research in Technical Analysis, is open for submission! Since its first year in 1994, the Award has received over 160 submissions, and recognized 20 papers for their excellence. Of the winning submissions, eight have gone on to publish books based on their research for the Charles H. Dow Award. The Award carries a prize of $5,000 and is presented at the CMT Symposium held in New York City each April.

The competition is open to all practitioners and academics and will be judged based on its ability to enhance the understanding of market action, the concepts of technical analysis, and thorough research. Additional information on the Standards of Judgment, included within the Guidelines for Submissions

Deadline December 7, 2018.


Timothy Hayes, CMT

Timothy Hayes, CMT, is NDR’s Chief Global Investment Strategist. He has been with the firm since 1986. Tim directs NDR’s global asset allocation services, develops strategy and major investment themes, and establishes NDR’s weightings for global asset allocation, presenting his views on...