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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 editor@CMTAssociation.org. 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

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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.

What's Inside...

President’s Corner

by Scott G. Richter, CMT, CFA, CHP

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...

Factor Investing is Simple but Not Easy

by Louis Llanes, CMT, CFA

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...

New York Chapter Meeting - Speaker Summary

by Mike Sroga, CMT

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...

Paul Desmond Memorial

by Richard A. Dickson

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...

Judgment for Traders: Lessons from Dead Pilots, II

by Mark Eidem, CMT, CFA

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...

Thoughts on Volunteering

by Michael Kahn, CMT

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...

Note for CMT Candidates

by Stanley Dash, CMT

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...

Chapter Report: Toronto, October 2018

by Colin Cieszynski, CMT, CFA

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...

How an Investment Advisor Uses Technical Analysis

by Clint Sorenson, CMT, CFA

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...

Member Interview – Phil Roth, CMT

by 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...

Chapter Report: Minnesota, Fall 2018

by Ralph Acampora, CMT

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...

Submissions for The Dow Award Are Now Open

by Timothy Hayes, CMT

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...

CMT Association News

by Marie Penza

Members on the Move The CMT Association would like to congratulate the following members on their new positions: Cesar Diaz-Loyo, Head Trader at Bendio AG, and Visiting Professor at IESA Foram...

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

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)

Scott Richter, CFA, CMT, CHP

Scott G. Richter, CMT, CFA, CHP

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Factor Investing is Simple but Not Easy

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

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)

Louis Llanes, CMT, CFA

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New York Chapter Meeting - Speaker Summary

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

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)

Mike Sroga, CMT

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Paul Desmond Memorial

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

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)

Richard A. Dickson

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Judgment for Traders: Lessons from Dead Pilots, II

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

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 Eidem, CMT, CFA

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Thoughts on Volunteering

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

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

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Note for CMT Candidates

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

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

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Chapter Report: Toronto, October 2018

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

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)

Colin Cieszynski, CMT, CFA

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How an Investment Advisor Uses Technical Analysis

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

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)

Clint Sorenson

Clint Sorenson, CMT, CFA

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Member Interview – Phil Roth, CMT

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

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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Chapter Report: Minnesota, Fall 2018

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

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)

Ralph Acampora, CMT

Ralph Acampora, CMT

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Submissions for The Dow Award Are Now Open

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.

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)

Timothy Hayes, CMT

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CMT Association News

CMT Association News

Members on the Move

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

  • Cesar Diaz-Loyo, Head Trader at Bendio AG, and Visiting Professor at IESA
  • Foram Chheda, CMT, Technical Research Analyst at Investment advisory
  • Jason Money, MBA, CMT, Senior Manager at E*TRADE
  • Nerisha Farquharson, CFAs Acting Chief Investment Officer at PROVEN Management Limited

CMT News

If you plan to take a CMT Exam during the December 2018 test administration, registration is open until November 9th.

As of today, 1,079 candidates have registered for the exam, which is a record number of candidates.

If you go to Prometric (link below) to schedule your exam and there are no seats available at your chosen test center, please email Marie Penza at marie@cmtassociation.org and she will contact Prometric on your behalf.   

If you cannot locate your confirmation from Prometric that contains the date, time and location of the test center, email Marie Penza at marie@cmtassociation.org 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)

Marie Penza

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New Educational Content This Month

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