Technically Speaking, November 2022

Hello Readers, and welcome to another edition of Technically Speaking.

In case you were wondering, the CMT APAC Summit 2022 was a success!!

We were all in Mumbai in the first week of November and the energy and excitement were palpable. People were thrilled to be meeting each other in person again. I had been working alongside quite a few CMT charter holders for close to three years, and met them only a couple of weeks back! Covid turned our lives around, but another year around the sun seems to have done the trick. Now that we are all back to our respective geographical locations, I have a question for you: How often do you reach out to market technicians from a different part of the world? We live in a world dominated by social media, so mode of communication is really a problem only if you make it one.

I have been lucky to be in a position where I have interacted with people across the globe, thanks to my job. I do realize that not many are in that position. But guess what? The CMT community does not care about your designation! And if anything, the recently concluded APAC Summit proved just that. I am repeating myself here, but you won’t find a more supportive professional community. All you have to do is reach out. We often focus on ‘what’s the worse that could happen’. Just imagine what were to be if we began approaching challenges/people with- ‘what’s the best that could happen?’ Same situation, different end of the spectrum but a stark transformation in approach and confidence; and all it takes is replacing a few words. Give your mind the right thoughts to obsess about and watch the magic unfold. One big advantage of expanding the horizon of your interactions is how quickly your notions take a hit. We are after all a product of our surroundings. With those surroundings come inherent biases. These biases are stubborn, let me tell you. It takes deliberate, conscious effort to steer clear from them. And the easiest way to do that is to talk to people, preferably from the other side of the world.

Speaking of the world, how has the market been treating you lately? Did the US Dollar rolling over catch you off guard? Did you ride the Dow30 ripper move we got to witness since October? There are divergences in the market that are playing at out the moment such as Energy (XLE) vs Crude oil, India’s outperformance vs global indices. How do you think these will resolve? Over the past few weeks, we saw 90% global indices climb above their 50-day moving averages (all when the DXY and rates halted). A sustained breadth confirmation over a three-month time period will do more to confirm this trend going forward. Financials too are catching a bid. Nifty Bank is trading at an all-time high. Talk about leadership coming through! While these are all signs to watch out for, the market sure has a lot of ground to cover to prove its bullishness. And we’ll just have to wait for the weight of the evidence to point us to the right direction.

In the meantime, here are some memories from the APAC Summit 2022. Images and videos will be available soon, so watch out for that!

Until next time,

Think Technically!

[ngg src=”galleries” ids=”11″ display=”basic_thumbnail” show_slideshow_link=”0″]

What's Inside...

President's Letter

by Brett Villaume, CMT, CAIA

On page 1 of the CMT Association’s Constitution, our Mission statement is written (Article 2: Purposes). The Mission has three parts — strategic goals, really — which are equal in...

What Is a ‘Breadth Thrust’ and What Are the Risks?

by Drew Wells, CMT, CIMA

The Technical Analysis community has a nearly endless number of loose definitions for what specifically constitutes a “Breadth Thrust.” While Technicians almost universally understand this term,...

The Bullish Case for Gold

by David Keller, CMT

While gold has not done much in 2022 in terms of absolute returns, the SPDR Gold Shares (GLD) has indeed outperformed the SPDR S&P 500 (SPY) by about 11% year-to-date. Why has gold not done...

The Bull Case for Stocks

by Austin Harrison, CFA, CMT

I don’t know which direction the stock market – or any other asset class – is headed next. No one does for sure. But whether your portfolio is prepared for impending doom or positioned for...

Spotlight on the Board | Gina Martin Adams, CMT, with Rashmi Bhatnagar, CMT

by Gina Martin Adams, CMT, CFA & Rashmi Bhatnagar, CMT

...

President's Letter

President's Letter

On page 1 of the CMT Association’s Constitution, our Mission statement is written (Article 2: Purposes). The Mission has three parts — strategic goals, really — which are equal in importance regarding the future success of the Association as we aim to be the standard-bearer of Technical Analysis worldwide. In this month’s President’s Letter, I want to explain further how we execute on the third item that composes our Mission:  Establish, maintain and encourage the highest standards of professional competence and ethics among technical analysts. If you are a candidate in the CMT Program, then you are already very aware that the CMT Association partners with the CFA Institute to follow a single Code of Ethics and Standards of Professional Conduct. Since 2015, the CMT Association has licensed the CFAI’s well developed and highly respected Code and Standards for use in all three levels of our curriculum.  Moreover, CMT 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)

Brett Villaume, CMT, CAIA

What Is a ‘Breadth Thrust’ and What Are the Risks?

What Is a ‘Breadth Thrust’ and What Are the Risks?

The Technical Analysis community has a nearly endless number of loose definitions for what specifically constitutes a “Breadth Thrust.” While Technicians almost universally understand this term, it might confuse many investors about what this development is and how it can be utilized. To start, we need to go over what we mean by “breadth” before we dive into the Breadth Thrust development. Put simply, “breadth” is either the number or percentage of index components or basket of assets per the user’s choice that are meet some type of specified criteria. For example, a commonly quoted breadth metric for the S&P 500 is the percentage of stocks trading above their 200-day moving average. It’s important to note that while the definition of breadth itself is quite specific, many financial news pundits will often refer to breadth as simply good or bad without providing any real context on what is measured. “Breadth…

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)

Drew Wells, CMT, CIMA

The Bullish Case for Gold

The Bullish Case for Gold

While gold has not done much in 2022 in terms of absolute returns, the SPDR Gold Shares (GLD) has indeed outperformed the SPDR S&P 500 (SPY) by about 11% year-to-date. Why has gold not done better as a safe haven? It’s all about the U.S. dollar.  First, let’s review gold’s role as a “safe haven” during bear market phases. While gold has struggled in absolute terms, it has handily outperformed the S&P 500 Index ($SPX) year-to-date. GLD is down about 4% in 2022, while SPY is down 15% over the same time period. If you had informed me at the end of 2021 that 2022 was going to be a raging bear market for stocks due to concerns about inflation, I would have told you that one of the surest bets would be gold. Gold is often considered one of the best inflation hedges around. So why has gold not been a better safe…

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)

David Keller, CMT

The Bull Case for Stocks

The Bull Case for Stocks

I don’t know which direction the stock market – or any other asset class – is headed next. No one does for sure. But whether your portfolio is prepared for impending doom or positioned for equities to rocket higher, it’s always important to understand both the bull and bear cases. By understanding where the risks to your thesis are, you’re more likely to know when your thesis could be wrong. Only then can you take corrective action With stocks on pace for one of their worst years ever, the bear argument isn’t hard to see. Trends are down in most asset classes. Inflation is running rampant, cutting into consumer savings and crushing consumer confidence. War rages in eastern Europe. China clings to a Covid-zero approach that continues to wreak havoc on global supply chains. Central banks around the world are pushing for tighter financial conditions. Our own Federal Reserve started…

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)

Austin Harrison, CFA, CMT

Spotlight on the Board | Gina Martin Adams, CMT, with Rashmi Bhatnagar, CMT

Spotlight on the Board | Gina Martin Adams, CMT, with Rashmi Bhatnagar, CMT

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)

Gina Martin Adams, CMT, CFA

Rashmi Bhatnagar, CMT

New Educational Content This Month