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Technically Speaking, September, 2006

From the Editor’s Desk

This month we introduce Contributing Editor Molly Schilling, an MTA affiliate. In this issue, you’ll find Part 1 of her In-Depth interview with Josh Rosen. Molly did an outstanding job providing insight into the mind and work of a New York Stock Exchange Specialist with Kellogg Group. As a market maker on the floor of the NYSE, Josh is one of the people responsible for ensuring traders can trade. What and how he thinks may lead to insights that help us trade better.

During the May Seminar in New York I had the chance to ask Josh why the floor at every exchange is always gunning for my stops. He had a very Michael Corleone-like expression as he told me it was nothing personal, just business. Stops tend to be clustered and it’s his role to provide liquidity. He must assume that we want trades to occur at the stop prices, and he is only doing his job when he allows me to exit my long at the low of the day. He also pointed out that in the very short term, stop points usually represent good buy or sell prices. When you think about it, stops are support and resistance and as traders, we expect bounces at these levels.

From that conversation, I learned to place wider stops. The losses are bigger when they are hit, but they are hit less often. Overall, that short talk with Josh has helped me to become a little more profitable. And, conversations like that represent the largest part of the value of my MTA membership.

In coming months, Molly will be offering more insights into the minds that make the markets. Hopefully we can all learn a little from each of her skillful interviews. As always, I hope you learn a great deal from this issue of Technically Speaking.

Sincerely,

Mike Carr, CMT
Editor, Technically Speaking

What's Inside...

From the President’s Desk

by Phil Roth, CMT

Greetings Members and Affiliates: August is normally the slowest month of the year in the financial markets, and 2006 was no exception (for equities anyway, my area of specialization). I did manage...

In Depth Part I: Josh Rosen Interview

by Josh Rosen, CMT & Molly Schilling

An Interview with Josh Rosen, CMT, a New York Stock Exchange Specialist with Kellogg Group, conducted by Molly Schilling. NOTE: This interview will be printed in two parts in the September and...

New York Chapter Report

by David Keller, CMT

The members and affiliates of the New York Chapter have used 2006 to review a variety of technical approaches to market analysis. In one of the heaviest attended sessions in recent memory, Arch...

Understanding Neural Networks

Adapted from “Developing Neural Models with Tradecision,” available at www.tradecision.com. Even the simplest definitions of neural networks can be confusing. For example, “Neural networks...

From the President’s Desk

From the President’s Desk

Greetings Members and Affiliates: August is normally the slowest month of the year in the financial markets, and 2006 was no exception (for equities anyway, my area of specialization). I did manage to take some vacation, but things did not slow down much for the MTA. The Market Technicians Association is a year-round business, and very different from when it began operation in the early 1970’s. We did not even have one paid employee at the beginning; we now have a full-time staff of five. As I write this message the position of Executive Director has not been refilled (our staff will increase back to six employees when it is), but we have made an offer to an excellent candidate, and I expect to be able to report to you next month that the new ED is on board. In the meantime, I have been functioning as ED, as well as President,

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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In Depth Part I: Josh Rosen Interview

In Depth Part I: Josh Rosen Interview

An Interview with Josh Rosen, CMT, a New York Stock Exchange Specialist with Kellogg Group, conducted by Molly Schilling. NOTE: This interview will be printed in two parts in the September and October issues of Technically Speaking. Josh Rosen blogs daily at TheTrendline.blogspot.com. Molly Schilling: So, Josh, here we are at the famous Bobby Van Restaurant on Wall Street after a difficult trading day (June 22, 2006). You work as a Specialist on the floor at the New York Stock Exchange — what a challenging job…What was it like today?  Josh Rosen: It was very interesting today – it seems that a lot of things are shifting right now in the market in general…Old adages aren’t necessarily working…The summer market was supposed to slow up — light trading and low volatility — we’ve seen low volatility in the summer for the past three years. But, all of a sudden, we have a situation where 

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)

Josh Rosen, CMT

Molly Schilling

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New York Chapter Report

New York Chapter Report

The members and affiliates of the New York Chapter have used 2006 to review a variety of technical approaches to market analysis. In one of the heaviest attended sessions in recent memory, Arch Crawford spoke in May about astro-finance and its implications for equities and commodities. As Arch started in the field with the original technical analysis team at Merrill Lynch, his experience and history in the markets caused us all to pay special attention to his comments. In June, Tom Keene shared insight gained from his daily appearances on Bloomberg Television and Radio.  He reflected on the relationships of technical analysis to fundamental, political, and economicevents. Next, Jeff Weiss stressed the importance of using trend lines and moving averages from the monthly charts as a foundation for any investment strategy. Dr. Marvin Appel took the stage in August, and demonstrated how a basic trend-following strategy with indexes and ETFs

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

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Understanding Neural Networks

Understanding Neural Networks

Adapted from “Developing Neural Models with Tradecision,” available at www.tradecision.com. Even the simplest definitions of neural networks can be confusing. For example, “Neural networks learn to associate values in the output column with the underlying patterns they detect within historical input data.” A neural network is trained on past data to find patterns (inter-dependencies) between the input features and desired target. After an artificial neural network is trained, it uses historically detected patterns to make future forecasts. When you update the data in an already trained neural network or feed new data into it, the network starts looking for patterns that are similar to those it has already found to be associated with certain price movements. After that, it makes a forecast based on the existing similarities with the known price patterns. Neural networks are not a technical indicator, fundamental valuation, regression algorithm or magic super-technology. The main advantage of neural networks

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.

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New Educational Content This Month

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