public

Technically Speaking, October, 2005

From the Editor’s Desk

As I write this, the commentators on financial television are working themselves into a frenzy as the S&P 500 has just declined below its 200-day moving average for the first time since early July. The index’s negotiation of this widely-watched major trend proxy characterizes the indecision in the financial markets right now as the marketplace ponders the economic effects of two hurricanes that recently destroyed the US gulf coast. Our cover article by Thomas Neuhaus discusses this very topic: the market’s historic reaction to natural disasters. It is both timely and interesting.  Inside, Contributing Editor Garry Rissman has provided us with the dialogue and some great photos from the question and answer session of the the MTA’s 2005 Market Forecast Panel held at the American Management Association headquarters on September 12th in New York City. Panelists included Gail Dudack, CMT, Katie Townshend, CMT, Louise Yamada, CMT, and Jeanette Schwartz Young, CFP, CMT. Also inside, Chicago Chapter Chair Ross Leinweber reports on the August 31st regional meeting in Chicago that featured Buff Dormeier, CMT’s discussion of volume as 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...

From the President’s Desk Technical Interest Continues to Trend

by Jordan Kotick, CMT

As John Kirby has pointed out in previous columns, the NYIF approached us about their goal of providing both basic and advanced technical analysis courses not only in major cities in the US but...

From the Executive Director’s Desk Member Sponsor List

by John R. Kirby

If you have 5 years experience in the business or if you have 3 years experience and have passed all 3 levels of the CMT, you deserve to be a full member of the MTA. Full members can vote on all...

Natural Disasters and the Financial Markets

by Thomas Neuhaus

Despite the catastrophic damage and unimaginable loss incurred by residents of the Gulf Coast, history shows that natural disasters have little effect on broad financial markets over the long term....

Chicago Chapter Meeting

by Ross Leinweber

On August 31st, the Chicago Chapter of the Market Technicians Association had the privilege to host Buff Dormeier, a highly respected technician and MTA member. The topic of discussion was volume as...

MTA Colorado Lobsterfest

MTA members, as everyone knows by now, always march to the beat of a different drum, so a Lobsterfest in the mountains of Colorado shouldn’t raise any eyebrows. So here’s a picture of the MTA...

2005 Women’s Market Forecast Panel

by Garry Rissman

It is no exaggeration as stated on the MTA’s website that the September 12th Spectacular held at the American Management Association in New York City was spectacular! On September 12, 2005, we were...

The Foundation For Successful Swing Trading, Part III

by Dave Landry

In Part 3 of this lesson, I’d like to answer some frequently asked questions I receive from readers: Q&A Q. When trading pullbacks, how do you know that this pullback won’t be the last? A....

Dear fellow MTA Members and Affiliates,

by Ralph Acampora, CMT

You may have heard that Prudential Securities recently had a broad scale cutback that eliminated several departments including economics, mutual funds and technicals. Since this followed a similar...

From the President’s Desk Technical Interest Continues to Trend

From the President’s Desk Technical Interest Continues to Trend

As John Kirby has pointed out in previous columns, the NYIF approached us about their goal of providing both basic and advanced technical analysis courses not only in major cities in the US but globally as well. Based on their interest, we finalized a join venture to launch the International School of Technical Analysis (ISTA). The increased interest in technical analysis and technical education is a great thing to see and partnering up with the New York Institute of Finance is a wonderful opportunity for the MTA. Again, like on so many other issues, my thanks to John Kirby for negotiating a very good deal for the MTA.

As per our contractual agreement, I appointed Ralph Acampora our “Relationship Manager” given his long history and stellar reputation with the NYIF. I have also had to appoint an advisory Board of two other people. I have asked Brad Herndon and Barry Sine

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)

Back to top
From the Executive Director’s Desk Member Sponsor List

From the Executive Director’s Desk Member Sponsor List

If you have 5 years experience in the business or if you have 3 years experience and have passed all 3 levels of the CMT, you deserve to be a full member of the MTA. Full members can vote on all issues, be chairs of committees, and sit on the board of directors. Advance your career. Become a leader in your MTA.

A list of members willing to sponsor new members and a copy of the member application is posted on your private member home page. Contact 3 of them with samples of your work and request they sponsor you for membership. You will not regret the effort.

Membership and the CMT designation are reserved for those whose professional efforts are devoted to practicing financial technical analysis. Today, more than ever you need the edge the CMT can give you. Why not start the process today?

Cassandra Townes is the MTA staff member

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)

Back to top
Natural Disasters and the Financial Markets

Natural Disasters and the Financial Markets

Despite the catastrophic damage and unimaginable loss incurred by residents of the Gulf Coast, history shows that natural disasters have little effect on broad financial markets over the long term. While certain industries such as insurance, transportation and other regional businesses are impacted significantly by major natural disasters, the broad financial markets recover swiftly after an initial shock. The economic environment, monetary policy and technical trends are much more important to the long-term direction of stock prices.

I have highlighted four of the most devastating natural disasters of the past century and the financial market’s reaction. Two of the four markets bounced back swiftly from impulsive declines and the other two never declined significantly. However, each market saw a different long-term outcome, indicating the market’s ultimate trend was probably based on a multitude of factors not related to the natural disaster.

2004 Indian Ocean Earthquake and Tsunami

On December 26, 2004, the fourth

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)

Thomas Neuhaus

Back to top
Chicago Chapter Meeting

Chicago Chapter Meeting

On August 31st, the Chicago Chapter of the Market Technicians Association had the privilege to host Buff Dormeier, a highly respected technician and MTA member. The topic of discussion was volume as a confirmation tool and an indicator Mr. Dormeier has developed called the VPCI (Volume Price Confirmation Indicator).

The VPCI analyzes the relationship of a volume weighted moving average and a simple moving average. By analyzing this relationship, price trends can be confirmed or contradicted. The indicator is then leveraged or discounted by two important factors: a short-term time frame of these same two components and a volume calculation which provides evidence of whether overall volume is increasing or decreasing.

Once the calculation has been made, there are four simple rules to follow:

  1. A rising price trend coupled with a rising VPCI confirms the trend and is bullish.
  2. A rising price trend coupled with 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.

Contributor(s)

Back to top
MTA Colorado Lobsterfest

MTA Colorado Lobsterfest

MTA members, as everyone knows by now, always march to the beat of a different drum, so a Lobsterfest in the mountains of Colorado shouldn’t raise any eyebrows. So here’s a picture of the MTA Colorado Lobsterfest.

(As embroidered on the bibs by June Arms); from left to right: Bobbie Deemer, Walter Deemer, Dick Arms, Charlie Kirkpatrick CMT, June Arms and Ellie Kirkpatrick (holding one of the six very special guests). Thanks to Dick Arms for supplying his cabin, the lobsters, and his wife June, who did all the work while Dick tracked his index.

How to follow a Lobsterfest? Only one thing could possibly do; Ellie baked an elk pie for the attendees the following night.

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.

Back to top
2005 Women’s Market Forecast Panel

2005 Women’s Market Forecast Panel

It is no exaggeration as stated on the MTA’s website that the September 12th Spectacular held at the American Management Association in New York City was spectacular! On September 12, 2005, we were honored to hear the views of the 2005 Women’s Market Forecast Panel moderated by Vincent Catalano, CFA, President and Chief Strategist of ViewResearch, LLC. Many experts have written that women are better investors than men, partially because instead of viewing investing as a horse race they can more clearly recognize long-term trends.

Seeing that this is my first submission to the newsletter, I will start off by paraphrasing my question to Louise Yamada and then provide excerpts of the panels’ closing remarks:

Question from Garry Rissman: I have been reading over the past few days regarding your description of the inverse head and shoulders; the triple bottom as seen on September 2001, October 2002, and March 2003; you were

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)

Back to top
The Foundation For Successful Swing Trading, Part III

The Foundation For Successful Swing Trading, Part III

In Part 3 of this lesson, I’d like to answer some frequently asked questions I receive from readers:

Q&A

Q. When trading pullbacks, how do you know that this pullback won’t be the last?

A. You don’t. You have to keep playing the stock as if the trend will last forever. Hopefully, you won’t get triggered on a pullback that turns into a major reversal. Or, at worst, you’ll get stopped out with a modest loss. The good news is that markets often offer many opportunities before they eventually fail.

Q. You didn’t mention ADX as a determinate of trend. Do you still use ADX?

A. In my first book, I felt that I had to quantify trend for those new to trading or those who needed more of an objective type analysis. Inadvertently, I think too much emphasis was placed on the indicator. I don’t use ADX to quantify a trend for a potential

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 Landry

Back to top
Dear fellow MTA Members and Affiliates,

Dear fellow MTA Members and Affiliates,

You may have heard that Prudential Securities recently had a broad scale cutback that eliminated several departments including economics, mutual funds and technicals. Since this followed a similar cutback at Smith Barney, I thought you might like to get my take on this change.

Since the bubble burst in the late 1990s, equity markets have been very challenging, choppy and net sideways. In that environment, money and focus has turned towards other asset classes… specifically commodities, foreign exchange and fixed income. Many firms that specialize in these areas have been growing their technical teams. The focus on these markets is growing, technical trading and timing is becoming more important and news worthy.

I can honestly say that there is today more interest in and more respect for technical analysis and the CMT charter than I have ever seen before! The nature of financial markets causes constant change. Those people who depended 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)

Ralph Acampora, CMT

Ralph Acampora, CMT

Back to top

New Educational Content This Month

Back to top