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CMT1
CMT1
Dear CMT Candidates, Registration and scheduling for the Level III exam closes today Thursday, April 5th at 5 PM EDT. Please make sure that you register as soon as possible to ensure your seat for the Level III exam this May. After this closing date, the MTA will be unable to register anyone for the Level III exam. Please note, the MTA offices will be closed April 6th, 2012. Registration and scheduling for the Level I and II exams will close on Friday, April 20th at 5 PM EDT. However, the CMT Support Staff strongly suggest that you sign up as soon as possible for these exams to ensure your preferred time, date, and location. The MTA has made significant investments in the CMT Program over the past year. These efforts to improve the Gold Standard in technical analysis, the CMT designation, are part of the ongoing advocacy work which the MTA performs on behalf of current charterholders as well as candidates in the CMT Program. We have included an article from the recent issue of Technically Speaking outlining some of the efforts by Robert Johnson, Ph.D., CFA, CAIA and the CMT Support Staff. As a reminder, registration for the 2012 Annual Symposium closes on Monday April 9th, 2012. Please click here to complete your registration today. In this issue we focus on indicators and oscillators and provide you with three related practice questions. We will also highlight the process for contacting sponsors to obtain Member status with the MTA; an important step towards attaining your CMT designation. In the next issue we will focus on selection and decision. We wish you success in your final weeks of preparation for the CMT exam.
Sample Quiz Questions Level I: Set A | Set B | Set C Level II: Set A
Archived CMT Institute Sessions Level I: Access archives Level II: Access archives Level III: Access archives
Recommended Reading Lists CMT Exam Level I CMT Exam Level II CMT Exam Level III
Now, candidates are assigned readings and have no insight into what is most important in the readings. With learning objectives, the candidate will know precisely what they are to glean from any assigned reading. Test developers will be able to write detailed questions that thoroughly address the candidates knowledge of the assigned reading. In the end, the candidate will be better prepared to apply the BOK in the real world. This is certainly not a short or quick process. It will take years to develop the foundation of a pedagogically sound distance learning program. In the interim, CMT candidates will continue with an outstanding program that develops their knowledge and ensures mastery of that knowledge. In the future, the Program will become more educationally sound to deal with the complexities of the global distance learning environment. The MTA has been growing and improving for nearly 40 years and will continue growing and improving. It is an organization dedicated to continuous improvement and Dr. Johnson is now putting the CMT distance learning program on a path of pedagogical improvement.
Examples of oscillators include: McClellan Oscillator Haurlan Index McClellan Ratio-adjust oscillator McClellan Summation Plurality Hughes breath oscillator Arms Index On Balance Volume Stochastic Williams %R MACD with a trigger line (actually a histogram) Williams Variable Accumulation Distribution (WVAD) Twiggs Money Flow Elder Force Index Relative strength indicator (RSI)
There are several places in the required readings where you will find explanations of oscillators, indicators and related concepts. We have listed them below: A. divergences/confirmations: a. Kirkpatrick & Dahlquist, Technical Analysis, Chapters 8 & 18 b. Pring, Technical Analysis Explained, 4th Edition, Chapter 10, 12, 16, 24, 28 c. Kaufman, New Trading Systems and Methods, 4th Edition, Chapter 9 d. Edwards , Magee, & Bassetti, Technical Analysis of Stock Trends, 9th Edition, Appendix C B. open interest: a. Kirkpatrick & Dahlquist, Technical Analysis, Chapter 18 b. Kaufman, New Trading Systems and Methods, 4th Edition, Chapter 12 C. oscillators: a. Kirkpatrick & Dahlquist, Technical Analysis, Chapter 18 b. Pring, Technical Analysis Explained, 4th Edition, Chapters 23 & 24 c. Kaufman, New Trading Systems and Methods, 4th Edition, Chapter 9 d. Edwards , Magee, & Bassetti, Technical Analysis of Stock Trends, 9th Edition, Appendix C D. overbought/oversold: a. Kirkpatrick & Dahlquist, Technical Analysis, Chapter 18 b. Pring, Technical Analysis Explained, 4th Edition, Chapter 10 c. Kaufman, New Trading Systems and Methods, 4th Edition ,Chapter 9 d. Edwards , Magee, & Bassetti, Technical Analysis of Stock Trends, 9th Edition, Appendix C E. volume: a. Kirkpatrick & Dahlquist, Technical Analysis, Chapter 18 b. Pring, Technical Analysis Explained, 4th Edition ,Chapter 22 c. Kaufman, New Trading Systems and Methods, 4th Edition, Chapter 12
Practice Questions
Level I
Which of the following indicators uses volume in calculating momentum? a. MACD b. Williams %R c. Elders Force Index d. Stochastic oscillator Answer c: Kirkpatrick and Dahlquist, Technical Analysis 2nd Edition, chapter 18, page 423 (1st edition, page 426) The EFI is an easy oscillator to calculate in that is uses only closing prices and daily volume. specified period of the daily price change multiplied by the volume. The index is simply an exponential moving average over some
Level II
When the ADX is rising it indicates a. b. c. d. where to buy the market. that the market is trending . a buy when the levels are less than 15. a sell when the levels are more than 15.
Answer is: b Kirkpatrick and Dahlquist, Technical Analysis 2nd Edition, chapter 18, page 443 (1st edition, page 447)
Level III
As Chief Technical Strategist for a long/short hedge fund, you have been asked by the firms CIO to perform an analysis on several Dow Jones Indexes. Using the following chart, summarize the important technical observations and determine whether the index should be bought, sold or if no action is recommended at this time. Please include pattern recognition, Bollinger bands, moving averages, stochastic, and MACD in your response. Dow Transports (8 points) Chart 10:
Guideline Answer: Price Action: (1 Point) Double top formation in place. (1 Point) Price made a new low (lower low) on the current bar. (1 Point) Price is riding the lower Bollinger Band indicating increased momentum. Bollinger Bands: (1 Point) Bands are expanding (widening) indicated increased volatility. (1 point) The moving average has turned down indicating a bear trend. Stochastic: (1 Point) Failed bullish crossover leaves the indicator spending extended time in oversold territory, indicating prolonged weakness. MACD: (1 Point) Indicator in a downtrend with the histogram making a new low. Analysis: (1 Point) All indicators and price action point to continued weakness. Index should be sold.
Submit Your Questions For those of you that have any questions or concerns regarding technical analysis or the content of the exam please email CMT Program Director, Jeanette Young, CMT (Jeanette@mta.org), and she will respond to you promptly.
A Review of the New Normal in Intermarket Work: A webcast presentation by John Murphy, CMT on October 19th, 2011 as part of the MTA Educational Web Series. View this presentation Download the slides
John Murphy, CMT, former technical analyst for CNBC, is author of several bestselling books including "Technical Analysis of the Financial Markets." His book on "Intermarket Analysis" created a new branch of market analysis emphasizing market linkages. A revised edition of his third book "The Visual Investor" was published in February 2009. John was given the first award for outstanding contribution to global technical analysis by the International Federation of Technical Analysts, and has received the Market Technicians Association Annual Award. Mr. Murphy emphasizes the use of Exchange Traded Funds (ETFs) to implement asset allocation and sector rotation strategies as well as global trading. His current market views are published on Stockcharts.com.
Your Required Reading Counts for MTA Continuing Education Credits By participating in the CMT Program, candidates are required to read various technical analysis books for each level of the exam. Each completed book qualifies candidates for 1 MTA Continuing Education credit. You can report your credits using the Self-Reported CE Credit Form by clicking here.
Applying for Member Status STEP 1: Find three (3) current MTA members who have already acquired member status to be your sponsors. If you do not know anyone, you can view a listing of all members who are willing to sponsor new candidates. All those included on this list have opted-in and welcome your introductory e-mail or phone call. Take advantage of the "randomize" feature on the list to select a variety of sponsors Try to select at least one sponsor in your area so you can develop a future relationship with STEP 2: Fill out the Application for Member Status entirely. Contact the MTA if you have any questions about the application. STEP 3: Direct your sponsors to the Sponsor Questionnaire and ask them to fill it out as soon as possible. You may direct them to http://go.mta.org/sponsorme
The CMT support staff recently revised the entire Frequently Asked Questions (FAQ) page to better support candidates in the CMT Program. Feel free to share this with your colleagues who may be interested in enrolling in the CMT Program.