From error to error, one discovers the entire truth – Sigmund Freud.
Hello, fellow CMT Members and Charterholders!! The path we follow in life is hardly ever a straight line. It zigs and zags, trends upwards and downwards, and sometimes seems to go nowhere, much like the lines on a chart. There are upside gaps and downward surprises, and reality doesn’t always seem to line up with how things “should be.” There are periods of accumulation and distribution, panic, and euphoria. So long as you focus on what matters most, success, no matter how you define it, will happen. If football is life for Dani Rojas, then technical analysis is life for me.
I have always been a creative type and a musician, but family always surrounded
me. When I speak of family, yes, I do mean my parents and siblings, but also my extended family, which is the CMT Association. My journey into technical analysis started at a very young age. I was around ten years old when I first learned about investing, the markets, and technical analysis. As a second-generation American raised in Northern New Jersey by a Greek family, I spent a lot of my early days in a restaurant. There, I learned about the hard work that is needed to be an entrepreneur and witnessed firsthand the rollercoaster ride that is the restaurant business of the good times and the not-so-good times. I credit my father for exposing me to the markets because he always told me that a solid education and hard work would help pay the bills, but it is through investing and taking calculated risks that you can achieve wealth. My father was active in the markets during the 1970s and ’80s and still is, despite turning 85 years old.
I remember vividly the crash of ’87, which was the seed of curiosity for me that surrounded all that chaos; seeing my father navigate those times while running a business and raising a family inspired me. We would watch Louis Rukeyser on Wall Street Week together and his “elves.” I might have been Rukeyser’s youngest viewer at the time. It could be because of my growing desire to learn about the markets and business, or it could be because Benny Hill reruns followed the broadcast. In either case, I look back at those early days as a formative time for me, and to this day, I often hear the Benny Hill Theme song in my head when reviewing my chartbooks 🙂
The first stock I owned was Nintendo in 1988, which was on the heels of the massive success of the original NES system, as well as Mike Tyson’s extreme popularity at the time, making Punch Out the must-have game in 1987 and 1988. At that time, the Japanese markets were on fire, and my father explained to me what stocks were. I was immediately fascinated knowing that I could be a part owner of a company; maybe I could meet Iron Mike! If the company succeeded, so did I via stock ownership. Little did I know at the time that I was performing very rudimentary fundamental work by purchasing stock of a company that I knew and understood, something that Peter Lynch would have been proud of. That was when I learned that companies are living and breathing entities. Their fortunes are tied to their products, similar to a restaurant. Then, the 1990 recession hit, which was sparked in large part by the spike in oil prices after Iraq invaded Kuwait. I was 13 at the time, and this hit our family hard. Being raised in a household whose fortunes were tied to the cyclical nature of the economy was my first lesson regarding macro fundamentals. It was then that I learned that other forces were at play and that success was not directly tied to “the product” or positive reviews.
During the early 1990s, I worked at the restaurant, becoming close to many of the regulars who would dine at our family’s upscale establishment. The place was frequented by many wealthy executives who enjoyed their martini lunches. I was mesmerized by their fancy cars and their near obsession with watching CNBC. While I already knew something about charting, it was then that I really got turned on to technical analysis after seeing John Murphy making the intermarket connections and Ralph Acompora labeling 1994 as a stealth bear market, as well as his Dow 10,000 call. It was at this time that I learned that while the stock market depends on economic forces, it does not move entirely on fundamentals. Something else was going on.
After I started working at Lehman Brothers while still in college, I witnessed firsthand that there is a difference between being right and making money. The summer of ’98 was when geniuses failed, but the only smart ones in the room were those that were market-facing. One by one, analysts in their fancy suits would walk up to the podium to address the trading floor and attempt to explain why the markets were collapsing. And one by one, these esteemed and highly regarded fundamental analysts, making millions a year, hadn’t a clue except for one beacon of light. It was at this moment, as the crash was unfolding that I met Steve Shobin, Lehman’s chief technical analyst, who graciously took me under his wing and began teaching me about market technicals, which included drawing charts by hand!
Even though I was still an undergrad, it was at that moment, in the summer of ’98, that I wanted to be a full-time technical analyst. It all started to make sense to me almost in a blink of an eye. I was fascinated with how markets can become so detached from fundamental expectations, which was a massive departure from what other college grads wanted at the time: a high-paying job in investment banking. After months of pestering, I was eventually hired as a member of the technical analysis team at Lehman Brothers soon after I graduated college. I worked with Jeff deGraaf for close to ten years, and he soon became Lehman’s chief technician and was eventually inducted into the Institutional Investors Hall of Fame. It was during my early years in the business that I framed how I view the markets. I was fortunate enough to work through the tech bubble and its bursting; I had the unfortunate experience of 9/11 firsthand, but the tremendous recovery after that sowed the seeds for the Great Financial Crisis, and that was just my first ten years. However, it was under Jeff’s guidance during this time that I learned the importance of trend following, market history, backtesting, and removing emotion in our decision-making by being systematic and process-driven because, without that foundation, I would not have been able to work on the buy-side nor continue to provide market strategy and portfolio analysis for large institutions today.
Alone, you are strong, but together, you’ll be stronger than ever. – Unknown I was extremely fortunate to have started with both Jeff and Steve. If we learn from those that come before us, then who did they learn from, and so on? As a guitar player, I was first into Eddie Van Halen, but then soon discovered he was inspired by Clapton, who was inspired by Muddy Waters, Freddie King, B.B. King, Albert King, Buddy Guy, and Hubert Sumlin, who were all inspired by Robert Johnson, who was perhaps the very first Rock and Roll artist. I did this when looking at who inspired me: Steve came from Merrill, who worked with Frank Teixeira, Robert Prechter, Steve Nison, Walter Murphy, Geroge Constantine, Phil Roth, Dick McCabe, and Walter Demer, which ultimately gets you to Bob Farrel. I like to think that I am related to them as part of a techncial analysis family tree, and in turn, I have, over the years, studied their work and, in many cases, met them in person to thank them for everything they have done. 
While I will forever be grateful for Jeff and Steve’s willingness to give me my first break in the business, Jeff encouraged me to pursue the CMT designation at an early age, which has had an equally profound impact on my career. Obtaining your charter then, as it does now, shows others that you have a strong desire not only to succeed and stand out from the herd but also to be a better version of yourself. The curriculum then, as it does today, pushes the envelope as to what a market technician is or how one can use this form of security analysis as a portfolio management tool. Even though the knowledge base has us all standing on the shoulders of giants, I was and still am in love with our community. If the world is small, Wall Street is even smaller, and our enclave of professionals is even smaller, but it is massive in the support we provide each other, much like a family.
My passion for market technicals and this vibrant community has inspired me to serve on the Board of Directors in an effort to give back to something that has given a lot to me. Throughout the years, I graded papers and was a local volunteer organizing chapter meetings in NYC. Since the early 2000s, I have personally benefitted from the networking opportunities the Association offers from in-person gatherings via symposiums or local chapter meetings. I have made lifelong friends through the Association and have broadened my skillset way beyond the textbooks as a market professional from others as a result.
Unbeknownst to most, the behind-the-scenes work at the CMT has allowed technical analysis to have a seat at the table. If you have yet to notice, technicals are everywhere, and it is undergoing a renaissance. As Vice president, I have seen firsthand what goes on behind the curtain, where a tremendous amount of work goes toward enhancing the value of the sacred three letters: CMT. Without Ralph’s courage to face FINRA, which resulted in the CMT being acknowledged as an equivalent of the CFA designation, individuals holding the CMT are exempt from the Series 86 exam, an essential requirement for becoming a research analyst. That type of advocacy work with regulators is a global effort, too. Advocacy also occurs in the media and via the great content the Association puts out, such as Technically Speaking, Fill The Gap Podcast, The Journal of Technical Analysis, or collaborative efforts with Investopedia and the CFA Institute. However, outreach to the academic community is a must because, over time, it allows technical analysis to truly gain credibility and to be taught in conjunction with fundamentals either on the stock level or via the economy at an early stage. To that end, I am currently an adjunct professor at Brandeis University, where I teach a graduate-level course. Many of my students have never been exposed to how markets actually behave, yet they are about to be thrown to the wolves completely unprepared. My students walk away from the class knowing that despite what their fundamental research may tell them, or how efficient and random markets are supposed to be, price is the only thing that matters to be successful, and if they can better interpret price while being aware of their and the market’s collective behavioral biases, they can make a more significant impact for their future employer but also for their wealth accumulation for years to come.
In the spirit of trying to keep this as brief as possible, I want to mention both technical analysis and the community I hold dear to my heart. This form of analysis allowed me to think creatively within the framework of organized chaos. I encourage everyone to spread the word not only about the uses of Technical Analysis but also about this vibrant community.
