public

Technically Speaking, October 2009

Letter from the Editor

This month we only have a few articles, but it will take serious students of technical analysis several hours to get through them and many more hours thinking about the ideas we present here. Eric Leake and Rob Hanna, CMT, have allowed us to reprint some of their work. Both papers offer detailed and profitable trading strategies. Enough detail is presented for someone to immediately take their ideas and start trading. More importantly, they each provide enough detail that you can  generate your own research ideas and use these papers as a starting point to develop a strategy that matches your own trading style. They should spawn countless research projects, and as you build on their work, you may want to follow their lead and publish it here for the benefit of your fellow MTA members. Also featured in this month's newsletter is an announcement from the MTA Educational Foundation discussing an online eBay auction and fundraising event. These are exciting and important events to help raise awareness and celebrate the opening

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...

MTAEF eBay Auction Coming Soon 20 for Education: Take a Technical Analyst to Lunch!

As part of the MTA Educational Foundation’s Fundraising Event in celebration of the opening of the MTAEF/MTA Library at Baruch College, the MTAEF is holding a charity auction with twenty (20)...

Opening Range Breakouts in Tight Markets

by Rob Hanna

This research was previous published in Quantifiable Edges, and investment newsletter available at http://www.quantifiableedges.com/ , and published by Rob Hanna, CMT. It is reprinted here with...

Opposites Attract: Improvements to Trend Following for Absolute Returns

by Eric Leake

Editor’s note: We are fortunate to be able to publish original research from Eric Leake, Chief Investment Officer at Anchor Capital (www.anchor-capital.com). As an investment manager, he is very...

The MTAEF Technical Analysis Lecture Series

by Phil Roth, CMT

I am pleased to announce the MTA Educational Foundation project of filming the technical analysis lectures, our whole college-level introductory course in technical analysis, is about complete. With...

How to Make Money in Stocks by William J. O’Neil (Fourth Edition)

by William J. O'Neil & Michael Carr, CMT

Many readers of Technically Speaking are very familiar with Investor’s Business Daily, the newspaper founded by William J. O’Neil. Many will also know that a subscription to the newspaper often...

The MTA Detroit Chapter Holds Its First Meeting

by Joe Olekszyk

Great News! The Detroit Chapter of the MTA had their inaugural meeting on September 10th and it was a great success. Ralph Acampora, CMT traveled to Detroit to speak to the new MTA Detroit Chapter....

Meeting of the MTA Job Analysis Task Force

by Jeanette Schwarz Young CMT, CFP, CFTe, MS

Members of the MTA’s Job Analysis Task Force met on August 15th and 16th along with two representatives of Prometric. The purpose of this meeting was to initiate the 2009 CMT Job Analysis through a...

MTA Announcements

CMT Exam Registration – Level 3 Closes Friday! Registration for the CMT Level 3 Exam closes this Friday, October 2nd! The Fall 2009 testing window will be October 22nd – October 31st. It...

MTAEF eBay Auction Coming Soon 20 for Education: Take a Technical Analyst to Lunch!

MTAEF eBay Auction Coming Soon 20 for Education: Take a Technical Analyst to Lunch!

As part of the MTA Educational Foundation’s Fundraising Event in celebration of the opening of the MTAEF/MTA Library at Baruch College, the MTAEF is holding a charity auction with twenty (20) noted industry professionals. Bidders are vying for the right to take these analysts and traders to lunch or dinner (price of the meal is not included) over which you can freely talk about the markets and gain their expert opinions and insights.

Winners will get contact information to arrange a time and place for lunch or dinner to be completed by the end of 2009. If lunch or dinner is not practical because of distance, etc., a 45-minute phone conversation can be substituted at a time
convenient for both parties.

Upon determining the official winner for each analyst, all parties will be notified and contact information will be forwarded to you when your tax deductible check has been received.

How It Will

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.

Opening Range Breakouts in Tight Markets

Opening Range Breakouts in Tight Markets

This research was previous published in Quantifiable Edges, and investment newsletter available at http://www.quantifiableedges.com/ , and published by Rob Hanna, CMT. It is reprinted here with permission.

Editor’s Note: The Opening Range Breakout is a classic trading technique employed by many very successful traders. However, very little has been written about it in the literature, perhaps because it works so well. This article provides more than enough detail to allow motivated market students to study the technique and builds on the existing body of knowledge by using pre-market data in the trading strategy.

Opening Range Breakouts in tight markets

Opening Range Breakouts (ORB’s) were popularized years ago by Tony Crabel. In his work he looked for narrow-range bars to occur as part of the setup. He would then expect an expansion in volatility and attempt to profit from that expansion by trading a breakout of an early morning range. Using slightly different tools

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)

Rob Hanna

Opposites Attract: Improvements to Trend Following for Absolute Returns

Opposites Attract: Improvements to Trend Following for Absolute Returns

Editor’s note: We are fortunate to be able to publish original research from Eric Leake, Chief Investment Officer at Anchor Capital (www.anchor-capital.com). As an investment manager, he is very familiar with the value of applying a trend following discipline to the investment process. This approach is the cornerstone applied by many successful investors. Unfortunately, trend following only works when it works. No strategy will always be successful in all types of markets. And as those who have applied trend following methods know, sometimes the losses can be difficult to endure.

Eric looked at what he could do to minimize losses at those times when trend following is out of synch with the markets. He hit upon the idea of employing a mean reversion strategy. These ideas also work when they work, and can lead to numerous whipsaw losses when they don’t work. Those whipsaw trades are often small but can add

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)

Eric Leake

The MTAEF Technical Analysis Lecture Series

The MTAEF Technical Analysis Lecture Series

I am pleased to announce the MTA Educational Foundation project of filming the technical analysis lectures, our whole college-level introductory course in technical analysis, is about complete. With the help of a great group of volunteer professionals, the MTAEF filmed and archived 10 of the 11 lectures during my course at Fordham University in New York. One lecture, on Chart Construction, did not transcribe properly and we will do it over. Ken Tower will be kind enough to do redo it. Let me thank the volunteers personally for their help: Ralph Acampora, who did the Introduction; John Hughes, Trend Analysis; Scott Maragioglio, Pattern Recognition; Bruce Kamich, Momentum Analysis; Jonathan Arter, Cycle Theory; Louise Yamada, Relative Strength; and Bob Rossetti, Portfolio Management. I did the others: Volume, Sentiment and Supply/Demand, and Intermarket Analysis.

Each lecture consists of two parts: 1) the live presentation by the speaker and 2) the Powerpoint charts we

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

How to Make Money in Stocks by William J. O’Neil (Fourth Edition)

How to Make Money in Stocks by William J. O’Neil (Fourth Edition)

Many readers of Technically Speaking are very familiar with Investor’s Business Daily, the newspaper founded by William J. O’Neil. Many will also know that a subscription to the newspaper often includes a copy of this book, or one of its previous editions. Having read the book years ago, some may wonder what they can gain from this update. Before getting to that, let’s review the basics of the book.

As the market soared to new highs in the 1990s, O’Neil and Investor’s Business Daily took on a near cult-like status. Thousands of readers turned to the paper every day to help them make their fortunes. In a roaring bull market, many found success by applying the rules explained in How to Make Money in Stocks. Study groups formed around the country, many of which still meet today. O’Neil himself toured the country offering workshops on how to apply the ideas.

O’Neil was

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)

William ONeil

William J. O’Neil

Michael Carr, CMT

Michael Carr, CMT

The MTA Detroit Chapter Holds Its First Meeting

The MTA Detroit Chapter Holds Its First Meeting

Great News! The Detroit Chapter of the MTA had their inaugural meeting on September 10th and it was a great success. Ralph Acampora, CMT traveled to Detroit to speak to the new MTA Detroit Chapter. There were about 15 individuals in attendance, consisting of MTA members, investment professionals, and the public. He recounted the founding of the MTA, it’s storied history and cast his vision for the organizations’ future. Ralph did not fail to provide us with multiple gems of market wisdom, incredible stories and his take on the current market environment. Before the evening was out, he took time to answer every question from the audience, and then joined us for dinner afterwards at a local restaurant. The long term goal of this chapter is to help grow and increase the exposure of the MTA, and expand the importance of technical analysis, in the Detroit area. In doing so,

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)

Meeting of the MTA Job Analysis Task Force

Meeting of the MTA Job Analysis Task Force

Members of the MTA’s Job Analysis Task Force met on August 15th and 16th along with two representatives of Prometric. The purpose of this meeting was to initiate the 2009 CMT Job Analysis through a face-to-face discussion between the survey administrator, Prometric, and the MTA’s subject matter experts. During this two-day meeting we were able to develop a survey of specific questions to ask our fellow CMT’s and full members of the MTA regarding the essential tasks, skills and knowledge required to perform technical analysis.

Significant changes in the markets, and the required skills and knowledge of technical analysis since the 2004 Job Analysis have prompted the implementation of this important initiative. We intend to have the survey ready for delivery on October 19, 2009. We realize that the completion of this survey will take a little time, but your participation in this survey process and candid comments is critical to

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)

Jeanette Schwarz Young CMT, CFP, CFTe, MS

MTA Announcements

MTA Announcements

CMT Exam Registration – Level 3 Closes Friday!

Registration for the CMT Level 3 Exam closes this Friday, October 2nd! The Fall 2009 testing window will be October 22nd – October 31st. It is our experience that those who wait until the end of registration to sign up encounter difficulty securing their desired time, date, and location as this is available on a first come first serve basis. Sign up today to ensure your preferred time, date, and location! Contact Marie Penza, 646-652-3300, for information on the CMT Program and/or to schedule your exam. For detailed instructions on how you can register online, please click here.

MTA Podcast Series – Upcoming Schedule!

    • Monday, October 5th – Larry Williams, renowned author and developer of Williams %R.
    • Thursday, October 8th – Thomas J. Dorsey, President and founding member of Dorsey Wright and Associates.

Visit the MTA Podcast Series page to listen

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.

New Educational Content This Month