Technically Speaking, January 2020

Letter from the Editor

Well, another year is in the books and unless you were a short-only equities trader, you probably did well. I’m not going to give you the typical year-in-review in the markets because you all have your own charts.

Rather, let’s look at where we are as an organization and all we need to know is that we are growing. We’re global. We’re recognized by the regulators. And we’re actually kind of fun.

Yes, that fun is in a nerdy sort of way – but through chapter meetings, online presentations and the annual symposium, we do get together quite a bit. Of course, we also hoist a few cold ones after the serious stuff is over.

I joined the organization in 1994, if memory serves. At first, I was just an associate member before I became a professional member. At the time, my membership was a bit unusual because I was not officially trading, advising or managing money with technical analysis. Rather, I was the technical analysis product manager for a vendor called Tradecenter, which was owned by Knight-Ridder Financial at the time. It was my job to identify new analyses to add to the service, define it for programmers, test it with real and simulated data and then teach the customers how to use it.

From that starting point, I got more involved in the Association, first as a committee member, then a committee chair, then newsletter editor for the first time, and eventually as a member of the Board of Directors.

There is plenty of diversity in what we do and plenty of opportunity in how you can contribute to the Association. I encourage you to find your angle of interest and simply join that committee. As a largely volunteer-powered organization, we need you!

This month, we’ve got the latest installment of Bruno DiGiorgi’s History of Wall Street series, in which we learn more about how Wall Street got its name. The very reliable New York and Chicago chapters have speaker reviews for your enjoyment. And this month’s member interview is with David Keller, CMT.

Toss in the usual Association news and there you have it.

Michael Kahn, CMT

Editor

What's Inside...

Welcome 2020! But What Did You Learn in 2019?

Happy New Year everyone!  Happy New Year to all our members, associates, partners, and friends!

Welcome 2020 and all the...

Read More

Protecting the Security of the CMT Exams

An important aspect of a credentialing program like ours is the security and confidentiality of the exams.  This is critical...

Read More

New York Chapter Speaker Summary

On Tuesday, December 17th, the New York Chapter hosted Jeff Hirsch, CEO of Hirsch Holdings Inc., Editor-in-Chief of the Stock...

Read More

The History of Wall Street

This is the fourth installment of a rerun of periodic series chronicling the history of the street. The series originally...

Read More

Chicago Chapter Speaker Review

At one point in the not-so-distant past, the Ceres Café...

Read More

Member Interview – David Keller, CMT

Please tell us what you do professionally.

I’m the Chief Market Strategist for StockCharts.com and I also run an...

Read More

Board Nominations Now Open

The Leadership Development Committee of the Board of Directors at the CMT Association is accepting nominations for Director-at-Large positions for...

Read More

Benzinga Offers Generous Conference Discount

Financial content aggregator Benzinga is offering a 50% discount on registration prices to CMT Association members who wish to attend...

Read More

Members In The Media

Money Manager Sets New Financial World Record

Kenneth Grant Winans is a successful investment management entrepreneur, renowned author, and an...

Read More

Membership News

Members on the Move

The CMT Association would like to congratulate the following members on their new positions:

Barry Powley,...

Read More

Welcome 2020! But What Did You Learn in 2019?

Happy New Year everyone!  Happy New Year to all our members, associates, partners, and friends!

Welcome 2020 and all the opportunities it brings!

What will 2020 hold for you?

Well, it depends materially on what you learned in 2019.  If you’ve learned, and have made positive change, you’re likely to advance in 2020.  If you haven’t learned much, or already know all there is to be known – then you’re more likely to continue to make the same mistakes, sabotage yourself, and not advance your cause.

I’m a huge fan of postmortem trade analysis.  I believe it provides us with a window to our thinking, our behaviors and our biases.  If you watch what you do – not so much what you say you do – and analyze it honestly, you’ll be on your way to becoming better in your market activities and more importantly, better in your life activities.

This transformation can be a big step for some people, but it can be a life changer.  It’s a big step because it requires courage!  To learn you must be honest with yourself about what you do, and why you do it. Make no excuses!  To grow from your learning – you must then embrace change and incorporate it into your new process and new self.  Self-change for the better creates new opportunities, new awareness, and new actions that will benefit you going forward.

So here’s to 2020!  Take a good look in the mirror of 2019, decide what you’ve learned, and make some positive changes!

Lastly, make sure you leverage all the CMT Association has to offer you throughout this process – chapter meetings, webinars, Technically Speaking, and our annual Symposium.  There is no reason not to learn and advance in 2020!

Sincerely,

Scott

PS – I’m readying my plans for our 2020 Symposium, and I look forward to meeting many of you there.  Don’t miss it – it’s a fabulous way to learn, grow and network with a great group of technicians and market observers.  Drop me an email and I’ll be sure to meet you at the Symposium. scottrichter@westfieldgrp.com

Contributor(s)

Scott G. Richter, CMT, CFA, CHP

Scott Richter, CMT, CFA, CHP is a senior portfolio manager for Westfield, which manages over $4B in AUM.  He is the lead portfolio manager for alternative assets and is also responsible for investments in the energy and utility sectors.  He was formerly...

Protecting the Security of the CMT Exams

An important aspect of a credentialing program like ours is the security and confidentiality of the exams.  This is critical to the value and integrity of our charters, and to the value of our CMT Association’s assets.  While you may think this falls only on the shoulders of current candidates, it really is important for the entire Association community to be mindful of threats to the exams and our assets.  Exam and program security, as well as the intellectual property rights of the CMT Association, are at risk from outright infringement – and from members who may “look the other way” when confronted with violations.

Our candidates agree to the following when sitting for a test:

This exam is confidential and proprietary and is protected by trade secret and other intellectual property laws. It is made available to you, the examinee, solely for the purpose of becoming accredited in the technical area referenced in the title of this exam. You are expressly prohibited from disclosing, publishing, reproducing, or transmitting this exam in whole or in part, in any form or by any means, verbal or written, electronic or mechanical, for any purpose, without the prior expressed written permission of the CMT Association.

Activities you may come across that might be a threat to the CMT Association and charter are:

  • False identification used for gaining entrance to exams.
  • Recording, note taking, or streaming – on paper or electronically – of exam content.
  • Providing briefings, or being asked to provide briefings, of actual exam content following a test.
  • Distribution of pirated (scanned or photocopied) copies of the curriculum.
  • Distribution of pirated (scanned or photocopied) copies of texts by any other authors. Intellectual property is property.

Of course, there are test-preparation providers and coaches who purchase and use the official curriculum and develop their own training and practice materials.  Those activities are NOT in conflict with our need for confidentiality and property protection.

If you have concerns or information about any violations, you can report them through the Report Misconduct link on the Association website, or contact the CMT Association staff to discuss your concerns.

Contributor(s)

Stanley Dash, CMT

Stanley Dash is the CMT Program Director at the CMT Association, a global credentialing body. In this role, Mr. Dash works with subject matter experts, candidates, and the Association’s members to maintain and improve the curriculum, the test experience, and the value...

New York Chapter Speaker Summary

On Tuesday, December 17th, the New York Chapter hosted Jeff Hirsch, CEO of Hirsch Holdings Inc., Editor-in-Chief of the Stock Trader’s Almanac, and Chief Market Strategist at Probabilities Fund Management LLC. His presentation was titled “The Only ‘Free Lunch’ on Wall Street; Trading the January Effect & Santa Claus Rally,” and discussed a variety of strategies that combine seasonal tendencies and other technical/fundamental factors.

Jeff started his presentation with the quotes, “Those who study market history are bound to profit from it!” and “Use history as a guide, not gospel.” This helped frame the night’s discussion by reminding us that a study of market history is important and useful, but it cannot be our only tool because we don’t live in an “average” world.

The next slide addressed the Almanac research process, which outlined the factors considered: fundamental and technical analysis; market internals and sentiment; monetary and government policy; current trends and economy; and cycles, seasonality, and recurring patterns.

After setting the scene with that overview of his process, the conversation moved into the 4-Year Election Cycle showing why the third year is still the best, with average gains significantly higher than the other three years. Jeff noted that 2019 has tracked pre-election year seasonal patterns all year and that suggested new highs were likely before the year ended. He was right.

Following a discussion of other election cycles and year-end seasonal tendencies, Jeff got into the “Sell in May and Go Away” pattern, which shows that the majority of stock market performance tends to come during the six month period of November through April. He also outlined how the performance of that tendency could be improved if combined with a technical trigger such as the Moving-Average-Convergence-Divergence indicator (MACD).

One alternative to “sell in May” which Jeff offered was “reposition in May,” a strategy in which tactical allocation decisions could be made to stay invested but improve performance by changing the asset-class or sector mix of a portfolio. He noted that these types of strategies can also be applied to the best six months of the year to improve performance as well.

The remainder of the presentation covered a lot of information about Jeff’s thoughts on the current market environment and certain sectors/industry groups, as well as an overview of the stock selection process he follows. The end of the slide deck also included a CMT Chapter Special Offer for a StockTradersAlmanac.com subscription. If you’re interested in obtaining that offer and the full slide deck, you can email Barbara@cmtassociation.org for access.

Thanks again to Jeff for taking the time to share his insights with us! We all enjoyed learning more about the benefits of studying history and incorporating seasonal/cycle work into our own processes.

Contributor(s)

Tom Bruni, CMT

Tom Bruni, CMT, is the Head of Market Research at Stocktwits, where he publishes the brand’s flagship market recap newsletter, “The Daily Rip,” for one million subscribers and oversees the platform’s growing publishing efforts. Bruni has been at the intersection of finance and media...

The History of Wall Street

This is the fourth installment of a rerun of periodic series chronicling the history of the street. The series originally ran in Technically Speaking beginning in September 2000.

Here is the second Manhattan melodrama for your consideration. The first (December 2019) was a story of an out-of-towner who had his only form of transportation burned to the ground, was forced to live in the streets, and then was sued for negligence.  The second is a story of a fast-talking city slicker who sells real estate he doesn’t own to gullible foreigners.  Common stories? Both take place in the 1600’s!

The date is 1626.  A little over a decade had passed since Adrian Block built huts on Broadway and misplaced his ship’s anchor.  The Dutch, then heavily involved in the fur trade, decided they needed a permanent colony in the Americas.  Manhattan Island, a common stopping point along the trade route, seemed the perfect place.

As most people know, the Dutch purchased the Island of Manhattan for the equivalent of a few dollars in trinkets and beads. What you may not know are the details of that deal and how ironically appropriate they were.

Manhattan must have been quite the Native resort in 1626 because everyone was claiming ownership to it.  It was in that year that the Canarsee band of Lenape Indians, with a keen sense of real estate values, sold the island of Manhattan to Peter Minuit and the Dutch East India Co.  Now we tend to think Minuit got the better part of that deal, but it was a far better deal for the Canarsees, who lived in what we now know as south Brooklyn. Even though they sold the island at a substantial discount, they still came out ahead because they never owned the Island in the first place!  The land still belonged to the Munsee band of Lenape Indians, who, no matter how drunk they had gotten 17 years earlier with Henry Hudson, just didn’t remember selling it!

As you might imagine, this created some tension.  The Munsees showed their displeasure with the whole arrangement by periodically raiding the Dutch colony and making off with their livestock – a rude thing to do, even by New York standards!  The colony’s response, in order that they might put an end to this constant raid on stock, was to build a wall, which they did at their Northern-most edge.  Fallen trees formed the first barrier.  These were later replaced with 12 ft. posts and granite rocks.  Once a wall was constructed, a road providing access to it was also built.  This road, running parallel to the wall, was called, unimaginatively, Wall Street.

Having said the details were ironically appropriate, you might think I was referring to the deal which eventually required the colonists to build a wall, giving us Wall Street.  Not at all.  My remark concerned itself more with the actions of the Indians rather than the colonists.  In selling something they didn’t own, the Canarsees participated in the first recorded short sale in Wall Street’s history.  A short sale, the act of selling something you don’t own, is a particularly sophisticated strategy found only in the securities industry.  How appropriate that Wall Street was created because of a short sale, a strategy found exclusively in the very industry which Wall Street has come to symbolize.

By the way, should you find yourself in Manhattan, as did Peter Minuit and Adrian Block, you should know that despite the gallant efforts of those first Dutch colonists, stock is still being raided on Wall Street and the locals are still taking advantage of out-of-towners!

Contributor(s)

Bruno DiGiorgi

Chicago Chapter Speaker Review

At one point in the not-so-distant past, the Ceres Café in the Chicago Board of Trade building was the go-to spot for traders, brokers, and other exchange employees. With the trading floors having mostly closed down, much of the old crowd is gone. To be sure, there are still many traders and other finance professionals who frequent the joint. For example, about once a month you can find a group of CMTs and event guests talking shop over drinks and appetizers. While the Chicago chapter of the CMT Association usually heads to Ceres after a guest speaker, the annual holiday party was a little different.

When you walk into Ceres, you might encounter a sharply-dressed Greek gentleman who warmly welcomes you to the restaurant he manages. You might not guess that this manager, Billy Assimos, traded through one of the most harrowing events in U.S. financial history. A lot of people know Billy. He is a stand-up guy who is respected all around. We, the Chicago CMT Association chapter, know Billy because we coordinate our post-event happy hour through him. So, for our holiday party, we asked Billy to share some of his trading war stories from his time trading in the mini-Dow pit.

Billy started his trading career in 1986, just before the big crash of 1987. He recounted how he got involved in the business: he was working at a restaurant nearby that was frequented by traders. He thought to himself, “These guys aren’t that much smarter than me, I should give trading a try.”

And so he did. While he traded small for much of his career, the events that transpired early on still allowed him to excel. During the crash, Billy was able to catch large swings on smaller size. He also told us how he believes that someone was backed by the government to come in and buy index futures so as to stop the bleeding. Billy continued to trade until 1994 before leaving trading to go back into the restaurant business.

Contributor(s)

Jim Erdmier, CMT

Jim Erdmier, who holds a Chartered Market Technician (CMT) designation, has been trading privately and institutionally for 10 years in equities, FX, and futures. He is pursuing a degree in Finance and Computer Science at DePaul University. Jim is Co-Chair of the...

Member Interview – David Keller, CMT

Please tell us what you do professionally.

I’m the Chief Market Strategist for StockCharts.com and I also run an independent research and consulting firm called Sierra Alpha Research.  I work with financial advisors and institutional investors to manage risk using technical analysis, behavioral finance, and data visualization.

How did you get there?

I studied music and psychology at Ohio State and after graduation I took an entry level position at Bloomberg in New York.  I was surprised to discover that technical analysis was a perfect fit for my courses of study, with the mathematics and creativity from music and the sentiment and behavioral insights of psychology.  I moved to Boston in 2008 to run the Technical Research Department at Fidelity, and soon after was elected President of the MTA (now CMT Association).  At the end of 2016,  I left Fidelity and launched my own firm in late 2017.  I’m so thankful to have worked with some fantastic people over my career.

Who was an early mentor in your career?

Two come to mind.  Ralph Acampora was always so open and encouraging, and I’ll never forget when he took me aside to nudge me into taking on a greater role within the organization.  Jeff Weiss is a very talented analyst who taught me two things: keep it simple and don’t take life too seriously.  Both have become lifelong friends.

What book/author was most influential in helping you understand TA?

I worked with Tom DeMark early in my career, and I’ve never met anyone that has thought so deeply about price and constructing technical indicators.  I learned a great deal about the relationship between price and trend.  The first book I read on TA was John Murphy’s “Technical Analysis of the Financial Markets” and I remember being so excited to apply what I was reading to the markets the next day.  It was an exciting time early in my career.

What do you like to do when you are not looking at markets?

I practice mindfulness meditation which is my #1 recommendation for finding peace away from the flickering ticks of the markets.  I’m also a classically trained musician and sing with the Cleveland Orchestra Chorus.  We performed Haydn’s “The Seasons” at Carnegie Hall last season!  Most importantly, I love spending time with my wife Carrie and kids Zoe and Henry.

What brought you to the CMT Association?

I came to the CMT Association hoping to learn about technical analysis and network with other technical analysts.  I remember attending my first event and seeing more senior technicians greeting each other like they were family.  Years later, when I walk into a CMT Association event it feels like a family reunion.  I’ve grown personally and professionally through my work with the organization, and I enjoy sponsoring prospective members and learning about their life experiences.

What it the most useful benefit of membership for you?

I learn the most from talking to other members.  Whether it’s the Annual Symposium in New York, a Northern Ohio Chapter meeting, or simply visiting a fellow CMT when I’m on the road, I think the community that the CMT Association facilitates is its greatest benefit for all of us.

Contributor(s)

David Keller, CMT

David Keller, CMT is Chief Market Strategist at StockCharts.com, where he helps investors minimize behavioral biases through technical analysis. Dave is a CNBC Pro Contributor, and he recaps market activity and interviews leading experts on his show “The Final Bar” on StockCharts...

Board Nominations Now Open

The Leadership Development Committee of the Board of Directors at the CMT Association is accepting nominations for Director-at-Large positions for the fiscal year commencing July 1, 2020. The Board is seeking to build a pipeline of future leaders by identifying members who can help move our association forward. Directors-at-Large serve a 3-year term.

In addition to the skills necessary to fulfill the obligations of the role and the desire to serve in a volunteer capacity to help further the mission of the CMT Association, nominees should exhibit the following characteristics:

PASSIONATE
Have a passion for technical analysis and furthering the mission of the CMT Association

POSITIVE
Encourage a positive and collaborative debate and discussion with a diverse group of volunteer leaders

PRESENT
Able to participate in regular conference calls, as well as attend the Annual Symposium and other events during the year

PREPARED
Eager to pursue a deep understanding of the organization, its structures, and strategic plans for the coming years

PROACTIVE
Be an active participant in discussions, bringing past experiences from inside and outside the CMT Association to help further the organization

Members, Honorary Members and Emeritus Members in good standing are invited to submit recommendations for consideration no later than February 5, 2020 via e-mail to president@cmtassociation.org. Recommendations may be submitted by anyone, including for oneself.

Contributor(s)

Alvin Kressler

Alvin Kressler is Executive Director & CEO of the CMT Association. Alvin was previously Director of Research and Corporate Access at Bloomberg Tradebook.  Before joining Bloomberg, he was the Executive Director of The New York Society of Security Analysts (NYSSA). At over...

Benzinga Offers Generous Conference Discount

Financial content aggregator Benzinga is offering a 50% discount on registration prices to CMT Association members who wish to attend Benzinga’s Cannabis Capital Conference in Miami this coming February 24-25th.

The Cannabis Capital Conference is Benzinga’s solution to a lack of access to reputable investors and capital for cannabis entrepreneurs. No other conference offers the level of access and seamlessness of interaction between a variety of cannabis enterprises and the investors whose capital will help transform those enterprises into high-value operations.

Benzinga, a leading financial media outlet with extensive coverage of the cannabis space, frequently breaks exclusive coverage on celebrity cannabis entrepreneurs and commentary from leading political and business figures. Their team has offered our membership a generous discount on registration with use of the code CMT, in addition to their standing offer of free admission for financiers representing family offices or institutional investors.

Part of the newer generation of financial media, Benzinga provides real-time information to individual traders while centralizing insight from well-known voices in many online trading communities. Its interface is a familiar place for investors to learn about new opportunities and develop relationships with other professionals.

You can learn more about the Cannabis Capital Conference by visiting https://www.benzinga.com/events/cannabis/miami/ or by reaching out to events@benzinga.com.

Contributor(s)

Tyler Wood, CMT

Tyler Wood serves as Managing Director of CMT Association with the aim of elevating investors’ mastery and skill in mitigating market risk and maximizing return in capital markets through a rigorous credentialing process, professional ethics, and continuous education. He is a seasoned business...

Members In The Media

Money Manager Sets New Financial World Record

Kenneth Grant Winans is a successful investment management entrepreneur, renowned author, and an active philanthropist. For three decades, he has conducted landmark investment research and designed creative investment strategies while serving as a portfolio manager, investment analyst, and financial writer; his four investment books have won 45 honors in international competitions, setting the new world record for the Most Awards Won in Major Book Competitions for a Finance/Business Author (in the English Language), according to the World Record Academy.

This accomplishment has also received a Certificate of Commendation from Senator Dianne Feinstein.

Mr. Winans, President, Founder & Chief Investment Officer of Winans Investments, a capital management & research firm, was recently selected as “Top Money Manager of the Decade” by the International Association of Top Professionals (IAOTP) for his outstanding leadership and commitment to the industry.

Since 2012, Winans Investments has ranked among the “Best of Best” financial advisors attending Barron’s Winner’s Circle Top Independent Advisors Summit.

For more information on Ken Winans’ books go to Amazon.com or www.KenWinans.com.

 

Andy Wong, CMT Featured On Bloomberg TV

Andy Wong, CMT, was interviewed on Bloomberg TV on Monday, sharing his opinion on the outlook for Chinese technology stocks and the sector at large.

“We noticed that the Chinese economy has been stabilizing, and also we noticed that domestic consumption and Chinese business confidence levels are quite healthy,” said Wong. “That’s why we believe that maybe earlier, the market was too pessimistic about the economy.”

He went on to explain why he believes Huawei, Samsung Electronics and others are good long-term choices, including names associated with 5G infrastructure and online commerce.

“Thinking about different sectors, ZTE goes across 5G infrastructure and is also a mobile phone supplier,” Wong pointed out.

You can watch the full interview online here: China Tech, 5G Stocks Favored by Andy Wong of LW Asset Management.

Contributor(s)

Marianna Tessello

Marianna Tessello served as the CMT Association’s digital producer from 2018 until 2021. She was responsible for the management of most of the association’s front-end digital assets during that time, including social media production, current website information and updates, and various communication...

Membership News

Members on the Move

The CMT Association would like to congratulate the following members on their new positions:

Barry Powley, CFA, CMT, Associate Portfolio Manager at CastleMoore Inc.

John DiRico, CAIA, CMT, Associate at BlackRock

Greg Schnell, CMT, MFTA, Chief Technical Strategist at GregSchnell.com

Updating Your Profile

Have you recently joined the CMT Association and did not provide your address?  Please login to the website and enter your address as we use this information to determine which and how many test centers are needed to serve members taking exams.  The information is also used to produce reports on those exams.

To update your profile, login to the CMT website and under My CMT select My Account.  On the following page, under My Account select Edit My Information.

Your cooperation is greatly appreciated!

CMT

Registration for the June 2020 test administration opened on December 27, 2019; be sure to register early and take advantage of early registration prices.  The CMT Level I & II exams will take place June 2-9, 2020 and the CMT Level III exam on June 4, 2020.

The 2020 edition of the curriculum is now available for purchase; the 2019 edition can also be used to prepare for the 2020 CMT exams as there were edits done only to the Learning Objectives.  The new Learning Objectives are posted on the website under CMT Program/About the Program/ Your exam level/Learn More.

If you encounter difficulties registering, please contact the office at admin@cmtassociation.org or call at 646-652-3300.

The CMT Association would like to congratulate the following members who received their CMT Designation in December 2019.

  • Banerjee, Arijit
  • Chun Quan, Chin
  • Craig, Edward
  • De Lassus, Arnauld
  • Goh, Kenneth
  • Kelly, Matthew
  • Kitchings, Andrew
  • Sachdeva, Tony
  • Sefter, Clay
  • Shastry, Avijeet
  • Uddin, Mustafa Jain

Contributor(s)

Marie Penza

Marie Penza serves as the Director of Member Services for the CMT Association.