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Technically Speaking, October 2008

Letter from the Editor

This issue of Technically Speaking presents information from some of the giants in the field of technical analysis. On the cover, we feature an in depth study from Cynthia Kase on the feasibility of spread trading. Her conclusions are precise and implementable, and the  statistical support she provides makes them reliable. This is an example of the type of work being done more often in our field, and her contribution raises the bar for testing ideas. A summary of John Bollinger’s career is inspirational, and demonstrates that this is a field of change. We need to study the past, but constantly develop new tools based upon changing markets and changing technologies. John is at the cutting edge of implementing technical analysis techniques with fuzzy logic and other advanced ideas. It is well worth the time to take a look at bollingerbands.com or any one of the eight web sites he maintains. Andrew Cardwell is a lesser known name in our field, but has shown one way to succeed – completely study a single

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What's Inside...

Calendar Spreads vs. Price -- Is There A Relationship?

by Cynthia A. Kase, CMT, MFTA

Many traders assume that calendar spreads show a relationship to prices. Are these assumptions correct? If so, how well do the spreads track prices, and is the relationship helpful? To find out, four...

Letter from the Executive Director

by Tom Silveri

Greetings to all, September of this year got off to a very active start for the MTA staff with the Long Range Planning Committee (LRPC) meeting on September 13th. This meeting, Chaired by David...

The Long Range Planning Committee (LRPC) meeting; Our Road Map to Continued Success

by John Palicka, CFA, CMT

On September 13th, 2008, members of the Long Range Planning Committee (LRPC) and the MTA Board of Directors got together in Westchester, New York for a full day meeting to discuss several key...

A Case Study in Success: John Bollinger

by Ajay G. Jani, CMT

On July 16th, I had the opportunity to meet with John Bollinger, CMT, CFA. I spoke with him via telephone again on August 5th. How someone who suffered from severe stage fright became one of the...

Analytical Toolbox: Trade Psychology—Andrew Cardwell

by Clare White, CMT & Andrew Cardwell

This article was originally published at Optionetics.com and is being reprinted here with permission. As a follow-up to last week’s article discussing Andrew Cardwell’s experience with the...

Calendar Spreads vs. Price -- Is There A Relationship?

Calendar Spreads vs. Price -- Is There A Relationship?

Many traders assume that calendar spreads show a relationship to prices. Are these assumptions correct? If so, how well do the spreads track prices, and is the relationship helpful?

To find out, four spreads for the NYMEX light sweet crude oil and natural gas futures contracts were evaluated: First-to-second nearby contract months, second-to-third, first-to-sixth, and first-to-13th. The first-to-13th spread compares like calendar months, such as January to January, eliminating seasonal issues. These spreads were evaluated for crude oil futures prices from January 1986 and natural gas futures from April 1990 to February 2008.

Two major categories relating to the spreads were calculated. These were an evaluation of the spreads versus price direction and price rate of change (bias), and an evaluation of the rate of change of the spreads versus price direction and bias.

Evaluation of Spreads

The spreads were evaluated on an absolute dollar basis as well as percent of price, where the

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)

Cynthia A. Kase, CMT, MFTA

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Letter from the Executive Director

Letter from the Executive Director

Greetings to all,

September of this year got off to a very active start for the MTA staff with the Long Range Planning Committee (LRPC) meeting on September 13th.

This meeting, Chaired by David Keller, VicePresident of the MTA and Larry Berman, President was a full day discussion of where the MTA has come over the last few years and, more importantly, where it is going in the future. Twenty-three MTA members including Board members, several Chapter Chairs, Committee Chairs, etc. actively  participated in the discussions. I am pleased toreport that many decisions regarding the MTA’s future were made at this meeting and all will create additional and better services for our members as we move forward. For a complete synopsis of the meeting, see the article on page 3 of this Newsletter.

In addition to the above, we are in the final phases of registration for the upcoming Fall CMT examination. I

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)

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The Long Range Planning Committee (LRPC) meeting; Our Road Map to Continued Success

The Long Range Planning Committee (LRPC) meeting; Our Road Map to Continued Success

On September 13th, 2008, members of the Long Range Planning Committee (LRPC) and the MTA Board of Directors got together in Westchester, New York for a full day meeting to discuss several key initiatives of the MTA today and for the future. The meeting was chaired by David Keller, MTA VP and head of the LRPC and Larry Berman, MTA President.

The meeting started with a discussion of the “State of the MTA” led by Tom Silveri, Executive Director. The LRPC participants discussed, amongst other matters the current membership demographics, new members, new CMT’s, reduced renewal “turnover” statistics and the overall financial condition of the MTA. It was generally concluded that we have made some good progress in most strategic and process categories overall the last 1+ years. This background discussion was good for all participants as it allowed for a generally consistent

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)

John Palicka, CFA, CMT

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A Case Study in Success: John Bollinger

A Case Study in Success: John Bollinger

On July 16th, I had the opportunity to meet with John Bollinger, CMT, CFA. I spoke with him via telephone again on August 5th. How someone who suffered from severe stage fright became one of the most recognizable faces in the media representing technical analysis is just one piece of a fascinating story.

Bollinger grew up in New York, and after high school he spent some time at the School of Visual Arts. He eventually moved to California to pursue a career as a cinematographer in the motion picture industry. He became interested in finance and began subscribing to newsletters and researching fundamentals to help drive his investments.

Replicating the experience of many other traders,
he failed at making money using fundamentals, and
in response took up technical analysis.

Bitten by the investment bug, Bollinger left cinematography and landed an apprentice position with trader Charles

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)

Ajay G. Jani, CMT

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Analytical Toolbox: Trade Psychology—Andrew Cardwell

Analytical Toolbox: Trade Psychology—Andrew Cardwell

This article was originally published at Optionetics.com and is being reprinted here with permission.

As a follow-up to last week’s article discussing Andrew Cardwell’s experience with the Relative Strength Index [RSI] and how he came to be a leading authority on this technical tool (see Analytical Toolbox: Speaking with Andrew Cardwell from 7/18/08, available at Optionetics. com), a natural next step is this week’s discussion on the psychology of trading. Mr. Cardwell has traded different futures markets for thirty years and has definitely developed some insights into the importance of trading with a plan and the challenges the markets present traders. His longevity in leveraged markets suggests he’s learned a thing or two along the way. 

Andrew Cardwell, President of Cardwell Financial Group, Inc., began his trading career in 1978 as a broker with McCormick Commodities. In 1981, Andrew left the brokerage business to devote his time to the study of technical

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)

Clare White

Clare White, CMT

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New Educational Content This Month

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