public

Technically Speaking, September 2010

Letter from the Editor

This is the second issue where we provide a brief summary of a presentation available for viewing in the MTA video archives. Watching the speakers from years ago may seem like a nostalgic divergence from the current markets. Nothing could be further from the reality that these videos are an invaluable learning tool for novice and experienced technicians. The MTA has always served more as a breeding ground of ideas instead of a ‘stock tout club.’ In conversations with early members of the MTA, that is frequently mentioned as one of their goals. They wanted to have meetings where the ideas discussed would withstand the test of time. They felt there were plenty of opportunities to gather and exchange tips. The MTA was designed to be different. The video archives meet this goal in a way that the founding members never dreamed of as a possibility. Of course the technology that makes this possible was not known when the first meetings were held. At that time, New York City was the center

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...

Selling Short: A Review

by Kim Husebye, CFA, CMT

The mechanics of selling short are not complicated: As with other financial assets, the aim is to buy low and sell high in order to capture a capital profit. The same is true with shorting, except...

Using Bond Spreads to Trade Equities

by Kevin Berkowitz

With equity trading volume contracting last month in typical summer fashion, interpreting conviction behind movement in the indexes becomes more difficult. Indicators that can help provide...

Q&A: Technically Speaking Interviews Véronique Lashinski, CMT

by Véronique Lashinski, CMT & Amber Hestla-Barnhart

How would you describe your job? I am a technical analyst. I work for Newedge, a leading Futures Commission Merchant. I cover a broad range of futures markets. My reports are meant to help market the...

Introducing the MTA Career Development Center

by Kristin Hetzer, CMT, CIMA, CFP

Continuing with our effort to bring increasing value to our membership, the MTA Board is announcing the MTA Career Development Center (CDC). David Keller, President of the MTA recently announced this...

Take a Technician or Trader to Lunch

by THE MTA EDUCATIONAL FOUNDATION

The MTA Educational Foundation is reprising its popular ‘Take a Technician or Trader to Lunch’ fundraiser. Just like last year, dozens of technicians, traders and even economists are making...

The Long Term Treasury Mania

by Jeb Handwerger

Since April 2010 and the emergence of the European Debt crisis, treasuries have been in a strong uptrend as investors are seeking protection from risky investments. It appears we are in a...

Technical Analysis for the Gold Market

by Michael Carr, CMT

On April 9, 2007, James Turk spoke at the New York Region Meeting. The video of his talk is available by clicking here. Turk presents his view on how the gold market looked at that time, and...

MTA Announcements

Career Development Center – New Additions! The MTA would like to announce that the following resources have been added to the Career Development Center. Linkages to Other Industry Related...

Selling Short: A Review

Selling Short: A Review

The mechanics of selling short are not complicated: As with other financial assets, the aim is to buy low and sell high in order to capture a capital profit. The same is true with shorting, except that we enter the sell order first, and the buy order later at a (hopefully) lower price. Since we are selling something which we do not own, we must first borrow the shares from a broker.

Selling short should be contemplated only in a bearish market environment, since most stocks ultimately follow the market’s direction. If this requirement has been met, then we can begin to search for individual stocks which are poised to decline.

CHARACTERISTICS OF GOOD SHORT CANDIDATES:

  1. High Liquidity: Look for stocks which trade at least 600,000 shares per day, but preferably over 1 million, so that entering or exiting positions is easy.
  2. Large Market Capitalization: Stocks with a market cap of $5 billion or

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)

Kim Husebye, CFA, CMT

Back to top
Using Bond Spreads to Trade Equities

Using Bond Spreads to Trade Equities

With equity trading volume contracting last month in typical summer fashion, interpreting conviction behind movement in the indexes becomes more difficult. Indicators that can help provide confirmation of the markets direction are therefore more useful. One indicator that we find helpful for doing this is the relationship beween investment grade and high yield corporate debt, measured using the ETF’s LQD and HYG respectively.

Not surprisingly the direction of this ratio tends to move opposite to the S&P 500 Index, as times of uncertainty cause capital to favor higher rated issues resulting in outperformance by LQD relative to its riskier peer. Conveniently, trend changes in the ratio’s level typically show up alongside trend changes for the major equity indexes. In certain instances they will even lead the equity markets slightly, adding to their usefulness.

The chart below shows a daily history of LQD versus HYG going back to April of 2007 (the inception

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)

Kevin Berkowitz

Back to top
Q&A: Technically Speaking Interviews Véronique Lashinski, CMT

Q&A: Technically Speaking Interviews Véronique Lashinski, CMT

How would you describe your job?

I am a technical analyst. I work for Newedge, a leading Futures Commission Merchant. I cover a broad range of futures markets. My reports are meant to help market the firm’s services and generate ideas for brokers and their clients. I used to be a commodities broker, and my work has evolved from the quick-end-of day reports I used to write for my clients in the 1990’s.

What led you to look at futures markets instead of stocks or another tradable?

Pure luck. I was a Marketing and Communications consultant in France and was looking for a change. I went to London in 1993 as the “City” was experiencing a boom. The energy desk at ED&F Man was looking for a beginner in the field who was fluent in French and German.

Do you look at any fundamental or economic inputs to develop your opinions?

Sure. First, being in

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)

Véronique Lashinski, CMT

Back to top
Introducing the MTA Career Development Center

Introducing the MTA Career Development Center

Continuing with our effort to bring increasing value to our membership, the MTA Board is announcing the MTA Career Development Center (CDC). David Keller, President of the MTA recently announced this additional benefit to our Member Services. The primary focus of the MTA Career Development Center will be creating and distributing resources to expand and enhance the membership’s marketability. The MTA is always actively pursuing new member benefits to make your membership with the MTA that much more valuable. We believe that this service does just that! This new service is a direct result from feedback that we received from you, the membership, in various member surveys.

The Career Development Center was activated in August. You will find the CDC at MTA.org, under the “Other Services” dropdown. Initially, the Center will focus on basic presentation skills: writing cover letters, resumes, successful interviewing techniques, dressing for success and social networking ideas. You

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)

Kristin Hetzer, CMT, CIMA, CFP

Back to top
Take a Technician or Trader to Lunch

Take a Technician or Trader to Lunch

The MTA Educational Foundation is reprising its popular ‘Take a Technician or Trader to Lunch’ fundraiser. Just like last year, dozens of technicians, traders and even economists are making themselves available to help advance the mission of the MTAEF to further the acceptance of technical analysis in the academic community.

To participate, you simply bid on EBay. The high bid wins the chance to sit and learn from industry leaders over a relaxed lunch. Winning bidders coordinate the time and location directly with the winner. Among the success stories from last year, John Bollinger reported that he was inspired to create new indicators after lunch last year.

A year ago, winning bids ranged from $200 to $7,000. Many lunches were $200 to $300, especially affordable for a good cause and possible tax deduction.

This year’s auctions include analysts from around the world:

Ralph Acampora (NY)
Guy Adami (NY/Chicago)
Robert Barbera (NY)
Rick

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 Long Term Treasury Mania

The Long Term Treasury Mania

Since April 2010 and the emergence of the European Debt crisis, treasuries have been in a strong uptrend as investors are seeking protection from risky investments. It appears we are in a deflationary crisis, similar to 2008 when treasuries soared higher before the massive government stimulus. Now, in August 2010, for the first time since the 2009 lows, the markets are under pressure with a major run out of equities and toward treasuries. A question many ask is whether this rise in treasuries is sustainable. My conclusion is that the treasury markets are unable to sustain a parabolic rise. When a technician sees a run in 2 to 3 weeks with several upward gaps, it should send warning signs of a potential bubble top. A study of the previous top in treasuries in 2008 shows a  parabolic move upwards, but only four months after this run all gains were wiped

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)

Jeb Handwerger

Back to top
Technical Analysis for the Gold Market

Technical Analysis for the Gold Market

On April 9, 2007, James Turk spoke at the New York Region Meeting. The video of his talk is available by clicking here.

Turk presents his view on how the gold market looked at that time, and admittedly it would seem to be dated information. But, as in many of these archived video presentations, the speaker offers valuable insights into their thought process. The value of this presentation is not in knowing whether you should buy or sell gold in the spring of 2007, but the chance to see the way the opinion is formed is well worth the time. 

A technician since his college days, Turk combines technical analysis with fundamental analysis in his work. He read William Jiler’s classic book, How Charts Can Help You in the Stock Market, and has seen the value of technical analysis ever since.

The first lesson he learned is to believe the market. The most

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)

Michael Carr, CMT

Michael Carr, CMT

Back to top
MTA Announcements

MTA Announcements

Career Development Center – New Additions!

The MTA would like to announce that the following resources have been added to the Career Development Center.

    • Linkages to Other Industry Related Job Boards
    • “Preparing for a Behavioral Interview” by MRI Network
    • “Twelve Steps to a Smooth Resignation” by MRI Network

To visit the Career Development Center, please click here!

Career Development Bookshelf

The MTA has opened a new portion of our library, dedicated specifically to career development books. In this section, we will suggest various additional reading materials, each of which are available through the MTA Library free of charge. This week we have added the following books:

    • “What Color Is Your Parachute? A Practical Manual for Job-Hunters and CareerChangers” by Richard Bolles
    • “Gallery of Best Cover Letters: A Collection of Quality Cover Letters by Professional Writers” by David Noble

Visit the Career Development Center for

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

New Educational Content This Month

Back to top