Market Technician No 89 - September 2020

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Market Technician Issue 89 - September 2020

The Journal of the Society of Technical Analysts











FTSE as a Leader

Quality data and its role within next generation technology in FX

Head and Shoulders above, Malcolm Pryor, MSTA

Thirty Second Jewel by Constance Brown

Gerry Celaya, MSTA

David Hastings

Malcolm Pryor, MSTA

David Watts, MSTA




- Editor's letter - IFTA 2020 online conference. Save the date!

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- Greetings from the Chair - Introducing our new Membership Secretary - New STA website

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FTSE as a leader, Gerry Celaya Quality data and its role within next generation technology in FZ, David Hastings From macro to micro - using cycles to harness trading and investment opportunities, Andrew Pancholi The crash of 2020, David McMinn Own gold, sell equities, Robin Griffiths and Ron William

07 15 17 23 29


- Head and shoulders above, Malcolm Pryor MSTA - Interview with Gautam Shah, Nicole Elliott

34 36


- Thirty Second Jewel by Constance Brown, David Watts - Bytes and pieces, David Watts

38 40


- Benefits of STA Membership - STA Calendar 2020/21 - Congratulations to the latest STA Diploma MSTAs

42 43 44


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STA Library Meeting the challenges of COVID-19 STA Diploma Part 1 Course STA Diploma Part 2 Course Special Journal Offer Home Study Course STA Executive Committee STA Advertising Rates 2020/21

45 46 47 48 49 50 51 52

Disclaimer: The Society is not responsible for any material published in The Market Technician and publication of any material or expression of opinions does not necessarily imply that the Society agrees with them. The Society is not authorised to conduct investment business and does not provide investment advice or recommendations. Articles are published without responsibility on the part of the Society, the editor or authors for loss occasioned by any person acting or refraining from action as a result of any view expressed therein.



Editor's Letter The March 2020 edition of the Market Technician came out just before lockdown kicked in. I should have seen it coming, writing on China-focused financial markets for the South China Morning Post. Nicole Elliott, FSTA Technical Analyst, Private Investor, E-journalist for the STA

STA monthly meetings in the conference suite at One Moorgate Place have had to be abandoned and I, like so many I’m sure, am missing our drinks and networking. But, ever resourceful and in part helped by experience designing our cutting edge Home Study Course years before schools and Universities cottoned on to the idea, speakers and STA Admin have produced top-notch webinars instead. The STA Board have continued making difficult decisions via virtual Zoom meetings, and even IFTA’s Annual Conference, bravely hosted by VTAD (Vereinigung Technischer Analysten Deutschlands), will see 24 international speakers presenting over 24 hours on 24 October - via the internet, of course.

Another glaring effect of the pandemic was the chaos in global markets in March - lack of liquidity, ridiculous stock-option implied volatility, issues with clearing some derivatives and hopeless price discovery. Equally remarkable was the subsequent recovery of the NASDAQ index in Q2. While scary, these are the exact conditions where technical analysis

Weeks earlier I had been fretting about the Lunar New Year holiday which involves the largest mass human migration in history. All plans ruined; so sad. I too am currently classifying my life as Before COVID (BC) and After COVID (AC); chalk and cheese.

helps a lot. As they say: ‘when the going gets tough, the tough get going.’ Getting a good grip on your personal finances is especially important against such a background. I would urge younger people embarking on careers today to add this skill to their armoury (budgeting and charting). The pandemic has also meant that the STA Diploma Part 1 and 2 courses will be held online for the first time in over 25 years. The good news is that those living overseas or too far from London to attend weekly classes will be able to enrol on these courses. As you can see from the above, computer literacy and social media skills have become de rigeur. If you’re a little shaky on the subject, consider the UK Treasury’s offer of taking on a young job seeker. You may also want to discuss with them the real value of a UK university education at £9k per annum. Time to refresh the CV, review the media profile, and maybe ditch some sites as too childish. Many older people are taking up new hobbies, re-training and studying on-line. Some of the world’s top ranked schools, deprived of foreign students next year, have lots of available courses. Articles in this issue of our magazine also reflect the old and the new, trends and history. Kicking off is Redtower’s Gerry Celaya (pg.7), with fab charts of the October 1987 stock market crash. I lived and traded futures through it all, including the Great Storm which killed 18 in Britain, and this ought to be a must-read for those who didn’t have

those ‘opportunities’. In stark contrast, the next research paper by David Hastings (pg.15) is focused on moving forward with technology and data... Next Generation stuff using vast pools of information and Artificial Intelligence. Malcolm Pryor’s (pg.34) account of his life in the business - a long time-span - harps back to the past but isn’t driving using a rear-view mirror. The interview with Gautam Shah (pg.36), who passed his STA Diploma exam at about the time Malcolm was quitting the corporate world, stresses the need for ‘forever learning’. Cycle theory features strongly in this issue. Andrew Pancholi (pg.17), who spoke at June 2020’s STA monthly meeting, kindly put pen to paper with super-long term historical insights. David McMinn (pg.23), who has researched market cycles for many years, has also written a gripping article with lots of great charts. And to round it all off, our book review is of Constance Brown’s (pg.38) new tome The Thirty-Second Jewel, covering W.D. Gann analysis. An author who came to speak to STA members in April 2019, she runs Aerodynamic Investments and has several videos you can watch on other charting websites. A last snippet: scroll down to the bottom of Bytes and Pieces (pg.41) to read about the Hovis (brown bread) Trader. Delightful!


2020 Online Conference: 24/24/24 HOSTED BY VTAD

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The theme of the 2020 IFTA Virtual Conference is ‘Trading or Investing - The Financial Markets After the Shutdown.’ How to invest after the lockdown? How will markets develop and what is the technical outlook? How and when to enter the market with a short-, mid- and longterm perspective. This year’s IFTA Virtual Conference will provide the answers to questions like these and will cover a lot more about investing and trading after the lockdown. With 24 speakers from all over the

world, over a period of 24 hours, IFTA will present the best from investing, trading and technical analysis. Prepare yourselves for more insights, knowledge and strategies than ever!

The conference provides a unique, once-a-year opportunity for professional practitioners (and sponsors) to listen to cutting-edge speakers. This year’s IFTA Online Conference will bring together financial professionals from across the world, particularly from our 24 IFTA affiliated Member Societies present in 22 countries. The level of conference presentations will be geared to professionallyemployed technical analysts, finance sector senior managers, fund managers, asset allocators, and financial planners, as well as highly experienced private financial market traders and/or investors. To register and for more details, visit



Greetings from the Chair The last few months have been a challenging time for the industry and the country as a whole. As members of the financial community grapple with the fluctuations in the market, never before has it been more vital to keep up to date with the latest trends in technical analysis and to learn from leading experts on how to help steer a way through the turbulent markets. To cope with these extraordinary times, the STA community has moved online. Sadly, due to COVID, we have had to cancel this year’s dinner and physical meetings at One Moorgate Place until January 2021 - but we are taking advantage of using the live webinar platform, Zoom, to invite international speakers and have an exciting speaker programme planned for the Autumn, including the renowned authors, Jack Schwager and Charlie Morris, ByteTree Asset Management.

Tom Hicks, MSTA

I hope you all stay safe, and look forward to returning to Central London events at the earliest opportunity. Tom Hicks, MSTA

Chair, Society of Technical Analysts

Meet our new Membership Secretary We are delighted that Rajan Dhall MSTA has taken on the role of Membership Secretary. Rajan will be known to many of you already as a regular attendee at our monthly meetings, social media commentator and lecturer on the STA Diploma Part 2 course.

Rajan is an experienced market analyst, who has been trading professionally since 2007 managing various funds producing exceptional returns. He is a full member of the STA, holding the prestigious MSTA designation. Rajan has vast experience of researching, developing and testing complex trading systems focusing on the equity, futures and foreign exchange markets. He has also provided market commentary services to many dedicated investors and traders as well as financial institutions. Members come from a broad spectrum of the financial community, including traders, brokers, fund managers, portfolio managers, market analysts and private investors. Rajan’s aim is to showcase some of the great services that the STA has to offer. There are also discounts available to students for services offered within our society.

Rajan Dhall, MSTA



Check out the STA's new website and domain name The STA has revamped the look and feel of its website, streamlining it and making it easier to navigate. We have also simplified the domain name to This means that the STA email address has changed to Your login details won't have changed, just log in as usual. If you forget to use the new website or email address, don't worry we do of course have a redirect. Do take a look and give us your feedback!



FTSE as a Leader Gerry Celaya, MSTA

Director of Redtower Asset Management and Tricio Investment Advisors. Gerry is a former board member of the STA and currently a director of Redtower Asset Management and Tricio Investment Advisors. He has worked at various US banks in London, providing research and proprietary trading services. Gerry ran the European technical analysis team for one of the largest provider of real time research to professional dealers. He holds economics degrees from UCSD (BA) and CSUSF (MA).

The FTSE 100 can be a useful leader to the US market ahead of big sell offs, as the failure by the FTSE to confirm new highs in the US DJIA seems to be a sign of exhaustion in the latter. This is not a ‘hard and fast’ rule or a quantitative trading technique, but rather a typical observation that I first heard in 1989 and has been a useful box to tick in my charting and trading (both professional and for my personal accounts) requirements since then. If the reader is looking for a model trading code or a ‘sell the farm and bet on this’ black box technique, this article is not for you! Rather, treat this as an interesting chinwag over a beverage after a talk at an STA meeting, a potentially useful tool that may be nice to have in your charting toolbox. For the purposes of this article I will reference the DJIA in the US, as this is the index that retail investors still (for some reason) latch onto. Professional analysts and investors use the S&P 500 and other indices, but these don’t make the nightly news on local TV. In 1987, I was a humble bond market analyst at a research firm called MMS based near San Francisco, CA. Long bond yields were north of 12% in those days, but my forecast for higher yields was sideswiped by the October equity market crash. When I moved to London in 1989 the equity chartist at our London office (Brian Kiely) did his best to teach me that the FTSE 100 had indeed led the US market by not confirming the late high in 1987. I was happy enough to take this on board,

but as we find, anecdotal charting views can be very difficult to embrace sometimes. Chartists and technical analysts like hard data, numbers and models that can be tested and come up with repeatable results - scientific methods - not art! The truth is that sometimes chart analysis is just not that simple. Figure 1: FTSE100 daily chart 1987

Figure 2: DJIA daily chart 1987

Figures 1 and 2 show what happened in 1987, when the FTSE 100 peaked in the summer and the DJIA peaked in October. However, Figures 3 and 4 (following page) may illustrate the daily closes and highs more clearly (FTSE blue, DJIA red).



Figure 3: FTSE100 and DJIA daily close chart 1987

Figure 4: FTSE100 and DJIA daily high chart 1987

The FTSE peaked on both an intraday high and close basis in summer 1987, and did not follow the US market index as it made new highs in October. This was interesting, but it was not a compelling trading indicator in my view at the time. Over the course of the summer in 1989 a lot of things happened, with the 1987 highs regained by both the FTSE and the DJIA. There was a ‘mini-crash’ in US shares in October 1989 that may not be that impressive these days. But at the time the one day drop of over 6% was notable, and the fact that it occurred on Friday the 13th within a week of posting new all-time highs in the US market was a headline grabber.


Figure 5: FTSE100 and DJIA daily close chart 1989

Figure 6: FTSE100 and DJIA daily high chart 1989

I was working closely with Brian as part of the charting team in London then, and he was very clear that there was a significant signal building in September 1989 as the FTSE peaked and did not follow the DJIA to new highs in October. This cemented the notion of using the FTSE100 as a ‘confirmer’ index for me, and I still use it to this day. Through the early and mid-1990s I moved on to Bank of America and then American Express Bank as a proprietary trader and analyst, focusing mostly on debt, FX and commodity markets. Part of our presentations to clients though usually touched on equity market indices for broad brushstroke directional views and risk, and I kept the ‘FTSE confirmation indicator’ as a factor to watch out for.




As the world collectively ‘partied like it was 1999’ at the turn of the century, and fears over the ‘millennium bug’ were making the rounds, the FTSE set a new all-time high on New Year’s Eve and then headed lower in the New Year. The US market, however, continued to climb in early 2000 for another two weeks, setting new highs as Figures 7 and 8 below show, before the indices fell relatively hard. This time around, though, I remembered the ‘FTSE leader’ idea and the divergence was a decent enough signal to be helpful. Figure 7: FTSE100 and DJIA daily close chart 1999-2000

Figure 8: FTSE100 and DJIA daily high chart 1999-2000


The credit crunch in 2008/09 (or Global Financial Crisis to many) was a big lesson in market timing and liquidity risk. The ‘FTSE as a confirming indicator’ for new all-time highs didn’t seem to work that well this time around, at first blush. Figures 9 and 10 below of the FTSE and DJIA closes and highs show that they pretty well matched.

Figure 9: FTSE100 and DJIA daily close chart 2007-09

Figure 10: FTSE100 and DJIA daily high chart 2007-09




There is a big ‘a-ha!’ moment though. Remember the FTSE100 high set in 1999? A real ‘bug’ in the general enthusiasm for shares in 2006 and 2007 was the fact that while US shares were setting new all-time highs, the FTSE was still below the 1999 peak, as the charts in Figures 11 and 12 below show (from 1999 to 2009). Once again, this was a ‘side factor’ to keep in mind and it was mentioned a few times in our research and analysis and played a part in some investment decisions. Yes, it was good to be bullish on US shares and act accordingly in the 2005-07 upswing, but without the confirmation from the FTSE, a degree of caution was always present. This made the idea of cutting back on optimism as a top formed a bit easier; the FTSE, after all, had not confirmed this stage of the rally. Figure 11: FTSE100 from 1999-2009

Figure 12: DJIA from 1999-2009


What about the recent turmoil? Figure 13 and 14 below show that the rather ‘long in the tooth’ idea still had a bite. The FTSE 100 peaked in 2018 on a close and high basis, while the DJIA kept pushing to new highs in early 2020. There was a ‘double trade’ here for our short-term work as the DJIA push to new highs in October 2018 was treated with caution as the FTSE had peaked in May, giving a ‘lack of confirmation signal’ ahead of the pre-Christmas tumble in the DJIA and other indices.

Figure 13: FTSE100 and DJIA daily high chart 2018-March 2020

Figure 14: FTSE100 and DJIA daily close chart 2018-March 2020




In 2020, the DJIA powered higher in February to a new all-time high, but once again the FTSE failed to confirm this, as its May 2018 highs (close and intraday high) remained intact. This made it easier for us to ‘go with the topping pattern’ in the US market when they appeared. In conclusion, this is a decent enough indicator or market factor to keep in mind when the US market makes new all-time highs - is the FTSE 100 confirming this or is something else going on? The actual makeup of the indices may have long term clues as to why this matters for investors. One could argue that the FTSE has long term cyclical shares in it, oil majors, pharma, miners and banks. These may reflect long-term concerns over the global economic outlook and investment cycle that are not immediately reflected in the US indices, which may be more concentrated in US economic performance and outlook, earnings etc. Or it could be that UK investors are savvier? For chartists, this discussion may offer further food for thought and the next time that US indices make all-time highs and the FTSE is not confirming this. Consider drawing in the important support lines and chart levels in the US market index. These may be important if the FTSE continues to ‘not confirm’ US market highs, they may prove very useful should the FTSE act as a leader again.



Quality data and its role within next generation technology in FX With every passing day, a greater volume of data is captured globally. The value of this growing source of intelligence varies from industry to industry but, within financial markets, quality price data is paramount and is worth its weight in gold. This data is being used within many areas of the business from, updating technical analysis charts, transaction cost analysis platforms, trade surveillance for compliance reasons, back-testing algorithms and alpha generation execution modelling. None of these would add value to the consumer if the data were not of top quality and covering real-time execution, market data, and historical tic data.

David Hastings

Director, Whispers FX Solutions David Hastings has more than 35 years professional financial market experience in FX trading within global institutional banks. For the past 10 he has run his own independent management consultancy, Whispers FX Solutions, offering advice on FX execution strategies, best execution and the use of market data. David has been an active member of the ACI UK (The Foreign Exchange Association) and was recently involved with the global Code of Conduct negotiations. He has a unique understanding of compliance and regulatory controls in a changing financial environment. David has written educational articles on FX that provide information and advice on the evolution of the market. He has been engaged by the London Stock Exchange and Greenwich University to lecture on Foreign Exchange Markets, including how corporates use foreign exchange as part of their hedging strategies.

The challenge for financial market practitioners has changed little over the past 25 years. To begin with, data must be captured, cleaned and stored. It must be analysed in order to discover patterns which can be profitably exploited, or - since the release of the FX code of Conduct - used to prove non-manipulative client execution and assist in achieving best execution. Today these processes are often automated. Computers capture and analyse data in a method referred to as machine learning. These programmes are designed to discover patterns and continuously adjust their rule-based algorithms to optimise the profitability of these patterns. However, the data challenge in respect to capture and usage has changed for financial trading firms in three ways over the past few decades: •

Firstly, there has been a vast increase in the volume of data captured, hence the importance of quality data being provided to Institutions to enable atomisation of their trading processes. With less liquidity available at a given price, trading frequency increases in order to facilitate the same execution of the same value.

Secondly, there has been an enormous expansion in the range of data available. Computing power, which continues to grow at the pace generally referred to as Moore’s Law, allows more data to be analysed quicker. This accelerates the adoption of faster trading strategies, leading to higher frequency and a further reduction in order size. It also means that other sources of data can be captured, which might have an impact on changes in price. The most obvious source of additional data is the depth of the order book.

Thirdly, there is the changing approach to risk management. In the days of voice-broking, trades were often input into risk management systems long after they had been transacted. In the brave new electronic world, risk can be monitored in real-time.

Risk-management tools, nonetheless, remain predominantly backward- looking. When historic volatility is low, margin requirements are reduced, and leverage is permitted to expand. When an unexpected event occurs, risk management responds slowly. Part of the reason for this slow response is the lack of interconnection between risk management across different markets and asset classes. A dramatic move in the price of crude oil may impact the US dollar at one



The allocation of capital to systematic strategies continues to increase, and the allocation to multi-asset portfolios is also on the rise.

Next Gen technology

time but not on another occasion. With greater computing power, it is easier to model changes in the correlation between related (and even unrelated) instruments. The next generation of risk management systems will be able to monitor the changes in relationship between a much wider array of instruments in real-time and to monitor the change in the stability of the correlations between instruments. We may not yet be able to identify the Butterfly Effect in advance but our risk management systems starting to become substantially more proactive. Looking ahead, the Next Gen technology already being deployed is based on machine learning. Most of the research relating to AI is being trained on more predictable data-sets, such as improving facial recognition or analysing topographic data to improve the reliability of sensors in driverless cars. For financial markets, the harnessing of new machine learning techniques is most evident in the development of automated trading algorithms. These “algos� constantly adjust parameters in an attempt to optimise trading strategies to changing market environments. The challenge, as always, is to insure that they do not back-fit too tightly. Teaching machines to identify regime change and still maintain sufficient robustness, whilst simultaneously minimising slippage on execution, is a tall task. Nonetheless,

in economic terms, the cost benefit of algorithmic execution has long since eclipsed the capabilities of human dealing desks. These algos will only perform and grow with the consumption of quality data. Next Gen technology can aid trading firms is in the analysis of liquidity quality. I recently discussed liquidity management with an independent FX manager who claimed to be receiving prices from 54 Liquidity Providers (LPs). Managing latency, assessing fill ratios and rejection rates was a full-time role performed by two of his traders. Their days are numbered, the automation of these processes will allow users to analyse liquidity quality real-time. Rule-based algorithms can then be designed to switch between the available panel of LPs, dependent upon the client’s assessment of their performance. Buy-side institutions have moved away from single bank liquidity, in favour of electronic communication across multiple asset classes. Often FX exposure is regarded as a residual, simply, to be hedged. This has spawned a substantial FX overlay industry, aiming to manage currency risk and generate alpha in the process. Other firms, especially certain quantitative hedge funds, have incorporated all assets, including currencies, into an integrated portfolio treating all of them as an asset class.

The increasing volume and variety of data favours the continued growth of systematic strategies. Machine learning methods are ideally suited to the use of networks (ECNs) or FX brokers offering price discovery via e-commerce systems. The cost and use of credit lines and liquidity management has become increasingly onerous currently many buy-side institutions do not have the capability to access prime brokerage services. Still, as regulation pushes these institutions to manage their portfolios on a real-time basis, they will adopt technologies that allow them to undertake marginbased trading. This in turn has made way for prime-of-prime brokerage institutions to facilitate buy-side access to a deeper pool of liquidity. FX markets are becoming more complex and fragmented; with the increased divergence of liquidity providers, such as non-bank LPs, those data sources that are available gain market share. Conclusion Next Gen technologies such as machine learning and AI are merely a continuum of the developments which have been evident in financial markets for several decades. What has changed is the volume, variety and complexity of the data sources which are available to be mined for meaning. Managing capital is about identifying opportunity, managing risk and designing processes which are sufficiently robust to contend with uncertainty. Technology allows us to scale our human capabilities. By reducing cost and increasing our capacity to manage capital, technology enables us to meet the needs of the next generation of investors. The demand for quality data is all consuming and powerful with the need to comply with the ever changing and sometime challenging regulatory emphasis on client protection and best execution. These factors alone will only fuel the importance of robust quality data.



From macro to micro - using cycles to harness trading and investment opportunities Following the STA monthly meeting in June, moderated by Patricia Elbaz, Andrew Pancholi shared with us his latest research on Cycles. The year 2020 has seen a financial event of proportions previously not witnessed in many people’s lifetimes. Indeed, many have dubbed the spring of 2020 sell-off as a “Black Swan” event. However, through our study of long-term cycles, and especially super long-term cycles, we had been on alert for this event. “Black Swans” are often larger cycles that are unrecognised and, therefore, unexpected.

Andrew Pancholi

The Market Timing Report Andrew Pancholi is a world-renowned trading expert specialising in market timing. A portfolio manager with more than 30 years’ experience in navigating the financial markets, he is the creator of the highly acclaimed ‘Market Timing Report’ (MTR). The MTR is based on output from the proprietary Cycles Analysis software system that Andrew built and uses daily to predict turning points in markets way ahead of time, right down to months, weeks and even days.

Figure 1: Stock market crash cycles

The 90-year cycle is a significant recurrence pattern that is prevalent not only in stock markets but also commodity markets. Until recently, few have been aware of this time cycle. Indeed, the 2010 commodity highs related directly back to significant highs that were witnessed in 1920. During this time period, the grains had a substantial blow off move into major tops. Returning to the indices, all of you will be familiar with the 1929 crash. Unless you have studied financial and economic history, you are unlikely to be less aware of the stock market top that took place in 1837. A substantial collapse followed with a low coming in five years later in 1842. The period leading up to this major high was one of cheap credit which in turn led to rapid expansion. There had been a property boom and the area around the Great Lakes in the USA had seen a substantial canal development. The purpose of this improved transportation was to take produce and goods from the Midwest and ship it up the St Lawrence Seaway into the global trade arena. Over speculation led to boom and bust. And 90 years on from the midpoint of this crisis, 1929 followed. Adding another 90 years takes us to 2019. It is now history that significant tops were made in February 2020, only a few weeks beyond the end of 2019 (Figure 1).



Breaking the cycles down into 45-year patterns, we note that 1884 saw an economic panic during the course of the Depression of 1882-85. Once again, this was due to a huge reduction in credit. Several banks failed.

One such cycle set is the 72 year cycle. Adding 72 years to 1929 takes us to the year 2001. Here, 2000 marked the end of the tech boom and by 2001 a clear bear market was in place both in Europe and also the US.

Adding 45 years to 1929 takes us to 1974, where we find the Western world once again in financial crisis. This time, it's the OPEC oil crisis. The price of crude oil has ballooned several fold. Britain endures a three-day week with power outages; the US brings in severe speed restrictions on its roads limiting the petrol consumption of its gas guzzling cars. And what do we see 45 years later? Another oil crisis.

Subtracting 72 years from 1929 takes us all the way back to 1857. As previously mentioned, 1857 saw one of the largest modern day panics, not only, in the US but also in the UK. The year 1857 appears in different cycle sets relating to panics and crises. You will now be able to see how clearly financial panics recur with absolute precision.

The cycles work with absolute precision. Another highly accurate cycle set is that of the hundred year cycle. We were able to forecast the 2007 – 2008 Global Financial Crisis easily. This was exactly 100 years on from the 1907 "Rich Man's Panic" or "Knickerbocker Crisis". The almostidentical build ups again revolved around the overextension of cheap credit. Back in 1907, JP Morgan himself was called upon to help out. One hundred years later, the house of JP Morgan was again clearly in the spotlight. The story doesn't end there. Head back another 100 years to 1807 and we find the US bringing in The Embargo Act in an attempt to stifle trade and intervene in the Napoleonic wars. This backfires catastrophically, leading to a nigh-on 80% decline in the American markets. Three financial panics in perfect alignment: 1807, 1907 and 2007. Mark 2107 in your diaries and forewarn your grandchildren. As for the 50-year midpoints of this cycle, we saw a huge financial panic globally in 1857, with over half of US banks failing. Some of you will recall the run on the Northern Rock bank in 2008. Both these time periods saw significant runs on banks. People thought this could not happen in 2008. History repeats. Go forward a century and 1957 saw a 20% sell-off in the markets especially in the US. This was simply due to a drop in manufacturing demand and a small recession followed. There are numerous other long-term cycles that are in force and when these all overlap, significant events take place.

Bank run on the Seamen's Savings' Bank during the Panic of 1857

From History to Profits However, harnessing macro cycles brings its own challenges. To overcome this, we have carried out substantial research into smaller cycles. These are far more complicated. By creating a layered system, we are able to simplistically stack short- and medium-term cycles alongside our macro cycles. In this way we are able to highlight, often down to the day, significant turning points across an array of instruments. Knowing when future turn points are likely to occur gives a significant advantage not just in optimising campaign entry and exit but also in managing risk as well as hedging. Many of you either attended or have seen the presentation that I gave on 9 June, 2020. I showed how long-term cycles were coming together with daily cycles in the Dollar Index. The decennial patterns also showed an alignment of turns. Our cycles histograms were also alerting us to a potential turn. I was looking for a turn on the Dollar Index between 8-10 June. This has since clearly manifested. Let’s break this down into smaller pieces to show how these cycles are broken down into a risk managed campaign set up: the decennial cycles for the Dollar Index reveal interesting patterns. The 20 year pattern from 2000 showed that a significant low came in during the second week of June. This was followed by a sustained uptrend (Figure 2).

Northern Rock, 2008


Figure 2: The decennial cycles for the Dollar Index reveal interesting patterns

However, when we observe the charts from the 10- and 30-year patterns relating to 2010 and 1990, we see the opposite pattern (Figure 3). Figure 3: The 10- and 30-year patterns for 2010 and 1990 reveal the opposite pattern

Both of these patterns made significant highs around 7-8 June. Again, a clear trend then followed for several weeks. This pattern is an inversion of the 20-year chart. The synchronicity of these three patterns placed us on alert for a potential trend change. Our proprietary histogram cycles which




track the current ‘DNA’ of the market were also signalling a potential trend reversal as weekly cycles were aligning at the same time as daily cycles. Our many different cycle sets are surmised into histograms. When the histograms peak in the future, we can expect the market to potentially change trend. Observe the histograms at the bottom of the weekly charts in Figure 4: the tallest histogram spikes are marked with red arrows. Note the one circled in blue. This has been showing for more than a year and - by the magnitude of its height - suggests a significant turn. Figure 4: Dollar Index Weekly Histogram Cycles

At the same time, the daily chart in Figure 5 opposite also shows also shows a significant spike on 9 June. We have a weekly set aligning with a daily cycle set. This suggests an important reversal. These independently calculated histograms are also aligning with turns showing from the 10-, 20- and 30-year decennial patterns.


Figure 5: Dollar Index Daily Histogram Cycles

This paper is being written nearly two weeks after the presentation and you can now clearly see that a significant reversal is already playing out. This example demonstrates the practical application of using cycles to identify clear trading opportunities. We cannot act blindly on a cycle and need the market to begin to prove the turn through the chart pattern. My work has found that amongst the ideal tools for trading cycles are action reaction lines and Andrew’s pitchforks. Linear regression bands are also useful. Other technical indicators such as Williams Percentage R can be invaluable to the decision making process. Deploying these tools together when daily cycles are present allows us to be potentially more aggressive. This increases the odds being on our side. This in turn enhances risk management. The set up was executed using intraday charts (see Figure 6). Figure 6: Intraday Charts of the US Dollar Index




The strategy process involves seeking proof of reversal on or around the time cycle day. Action reaction lines are added. The Dollar Index took out the previous swing high. A retest of the lower parallel line is then confirmed as an entry point by the Williams %R indicator allowing the effective management of risk. You can now see how cycles from more than 30 years ago can be harnessed to the day. A further strategic purpose is demonstrated in the long range chart of copper shown in Figure 7. Given the present economic downturn, aligning with the 90-year cycle, we can seek clues on when we may see potential upturns. Figure 7: A Long-Range Chart of Copper Prices

This is a monthly chart of the metal heading back to 1967. Again, significant predictive timing spikes are shown within the purple circles. The yellow circle shows a very large cycle set coming together in September 2021. This time period will see a very important reversal playing out. In terms of portfolio management, any trending open positions would need to be protected as we approach this time window. Additionally, once a reversal has been confirmed by the chart pattern, then a new campaign can be commenced in the direction of the new trend. We know to expect a turn in the copper market in September of 2021. We do not know if this will be a high or a low. Closer to the time, we can seek clues from sources such as Commitments of Traders Data. By ascertaining what the smart money, in the form of “Commercials” and the “Non Commercial” trend followers are doing, we can get a strong indication of direction. My intention with this article following on from my presentation is to enlighten you on how super long term cycles can be broken down into smaller and smaller cycle sets thus enabling low risk, high reward portfolio management.



The crash of 2020 Introduction In the history of the Dow Jones Industrial Average (DJIA), there have been several important indicators of an emerging bear market that have proven quite reliable over time. This article discusses these trends in relation to the stock market crash of March 2020. It was a dramatic, historic event by any measure. •

Firstly, the timing of the annual one day (AOD) fall after the peak is an important indicator of a looming downturn. If the interval is less than 23 days, the slump is likely to be a correction; greater than this and it should be a bear market. The 2020 AOD fall happened 33 days after the peak, thus confirming a bear market.

• Secondly, DJIA peaks forming at about the same time of year, usually have similar lunar phase. The peaks in 1906, 1934 and 1966, 2020 all happened in the month to 15 February, with lunar phase around the 3rd quarter Moon. • Thirdly, major DJIA AOD falls (≥ -4.50%) since 1910 have nearly always occurred in two ranges between 1st quarter and full Moon and between 3rd quarter and new Moon. The 2020 AOD fall took place within these ranges.

David McMinn David McMinn completed a Bachelor of Science degree from the University of Melbourne in 1971 (geology major) and subsequently became a Minerals Economist in ANZ Banking Group Ltd. Since leaving this position in 1982, he has conducted private research on cycles arising in seismic and financial trends, publishing numerous papers on cycle theory, especially in relation to the 9/56-year cycle.

Lastly, in 0 ended years, the DJIA usually enters into a bear market and the US economy often experiences a recession. Such trends were components of the important Decennial Cycle found in US market activity over the past 140 years. A DJIA bear market and US recession both occurred in 2020 as expected from history (McMinn, 2019b), Background An annual one day fall is taken as the largest one day percentage decline in the year commencing 1 March. It represents the biggest one-day shift in negative market sentiment during a given year. Moon Sun data was timed at noon (New York time) on the relevant trading day (daylight savings ignored). The angular degree between the Moon and Sun (lunar phase) is abbreviated to A°, and the degree on the ecliptic to E°. This is to avoid confusion between two different concepts. A bear market is commonly defined as stock market fall of more -20% following a rise of more than +20%. However, this appraisal included market declines of over -18.5%.



AOD Falls & Lunar Phase The relationship between the lunar phase and DJIA AOD falls over -4.50% for the 1915-99 epoch is illustrated in Figure 1 (McMinn, 2000). Lunar phase nearly always appeared in two segments - 085-195 Aº and 270-350 Aº that were approximately 180° opposite in the angular circle. The panic of 16 March 2020 happened with lunar phase at 273 Aº, thus falling within these ranges.

Figure 1: Lunar Phase & Major DJIA AOD Falls, 1915-99

Source: McMinn (2000)

Some 35 major AOD DJIA falls over -4.50% occurred between 1910 and 2020, of which only the 1930 and 2018 episodes did not have lunar phase within the two segments noted in Figure 1 (significant p < .001). No AOD falls took place with lunar phase between 350 A° and 085 A° (significant p < .01). The lunar phase effect did not apply before 1910 or to DJIA AOD falls below -4.50%. It also did not show up in FT-30 daily data post 1935. DJIA Peak - AOD Fall Intervals A large DJIA AOD fall (≥ -4.00%) occurring within 23 days after a record peak was always a precursor to a looming correction rather than a more serious bear market (McMinn, 2018). If such a fall happened after the 23 day interval then it usually indicated that a bear market was emerging. It has been a reliable indicator with few exceptions over the past century or so. The record high was reached on 12 February 2020 followed by major oneday falls of more than -4.00% on 27 February and 2 March. These were within the 23-day time frame, thus a correction market was likely. This seemed strange at the time as the COVID-19 virus was not going away anytime soon and there was no relief on the horizon for world markets. The actual AOD fall occurred on March 16, 2020 some 33 days after the record high, thus confirming a fully-fledged bear market (see Table 1).

Table 1: The 2020 DJIA Bear Market Date

DJIA one-day %


12 Feb 2020


DJIA record high

27 Feb 2020


2 Mar 2020


9 Mar 2020


10 Mar 2020


11 Mar 2020


12 Mar 2020


Trump imposed European travel ban

16 Mar 2020


COVID-19 virus recession fears - AOD fall

23 Mar 2020


DJIA bear market Low

24 Mar 2020


AOD rise

COVID-19 virus recession fears Saudi Arabia - Russian oil price war COVID-19 virus recession fears



DJIA Peaks & Lunar Phase The full listing of DJIA highs at the beginning of a bear market did not correlate with lunar phase. This could still be achieved but only by breaking these events into subsets by month - day (year ignored). Peaks taking place at the same time of year usually have similar lunar phase (McMinn, 2020). This has been another persistent trend in stock market timing. Since 1890, four bear markets have commenced in the month to 15 February, all of which had lunar phase between 225-295 A°, a range of 70 degrees (see Table 2) (McMinn, 2020). There were no commonalities in the timing of the ensuing financial crisis. Table 2: DJIA Peaks, 16 January - 15 February

Source: McMinn (2020)


Lunar Phase A°

US Panic/Crisis

19 Jan 1906


Financial distress*

5 Feb 1934


Stock market panic (26 Jul 1934)

9 Feb 1966


Credit squeeze (Aug)

12 Feb 2020


COVID-19 virus scare Saudi Arabia - Russia oil price war

*The great San Francisco earthquake on 18 April caused financial distress, due to insurance losses.

AOD Falls in 0-Ended Years For years ended in 0, DJIA AOD falls (≥ -2.50%) nearly always occurred in the five months ending 10 August (see Table 3), with one discrepancy on 10 September 1960. The 16 March 2020 AOD fall took place within these patterns.

Table 3: DJIA AOD Falls in 0-Ended Years*

Source: McMinn (2019b)


% Fall

US Panic/Crisis

16 Apr 1900


US recession

3 Jun 1910


26 Jul 1910


19 May 1920


After inflation crisis

16 Jun 1930


US Govt imposed import duties

14 May 1940


21 May 1940


26 Jun 1950


Outbreak of Korean War

19 Sep 1960


US recession

25 May 1970


US recession

17 Mar 1980


After silver mania

6 Aug 1990


Iraq invaded Kuwait

14 Apr 2000


After Greenspan Bubble

20 May 2010


Euro sovereign debt crisis

16 Mar 2020


COVID-19 recession fears.

Antitrust crisis

Germany invaded France

*Year beginning 1 March NB: Two days of almost equal percentage AOD declines happened in 1910 and 1940. Thus two AOD falls have been presented for each of these years.



A 20-year cycle commencing in 1910 always had DJIA AOD falls in the 3.3 months to 10 August. 1910 3 Jun 26 Jul


1930 16 Jun


1950 26 Jun


1970 25 May


1990 6 Aug


2010 20 May

NB: Two almost equal percentage AOD falls occurred in 1910.

In the 20-year cycle beginning 1900, AOD falls occurred in the 2.5 months to May 25, with an anomaly on 19 September 1960. 1900 16 Apr


1920 19 May


1940 14 May 21 May


1960 19 Sep


1980 17 Mar


2020 14 Apr


2020 16 Mar

NB: Two almost equal percentage AOD falls happened in May 1940.

AOD Falls & the Secular Trend AOD falls occur when the Sun is sited in certain ecliptic segments during certain eras lasting up to about 35 years (see Table 4). This concept was first presented by McMinn (2018). The 12 February 2020 high aligned within this trend for AOD falls between 20 January and 11 May and gave rise to the series 1988, 2000, 2007, 2018 and 2020. Table 4: The Solar Year, the Secular Trend & DJIA AOD Falls ≥ -4.50%*

Source: McMinn (2018)

Sun in


AOD Falls By Era


300-050 E°

20 Jan - 11 May

1901-1916 1901, 1907, 1912. 1915, 1916 1988-2020 1988, 2000, 2007, 2017, 2020


050-105 E°

12 May - 7 Jul

1930-1962 1930, 1940 1950, 1962

105-155 E°

8 Jul - 28 Aug

1914-1934 1914, 1919, 1932, 1933, 1934 2002-???? 2002, 2011

155-215 E°

29 Aug - 28 Oct

1929-1955 1929, 1931, 1937, 1946, 1955 1986-2008 1986, 1987, 1989, 1997, 1998, 2001, 2008

255-270 E°

8 Dec - 20 Dec

1895-1928 1895, 1896, 1899, 1904, 1928

*Year beginning 1 March, 1890-2020




Bear Markets in 0 Ended Years In the Decennial Cycle, the DJIA usually experiences a bear market beginning in a 9- or 0-ended year (see Table 5) and the year 2020 was no exception. It was one of the more reliable trends in US financial history, with 10 bear markets and four corrections (McMinn, 2019b). Table 5: DJIA Bear Markets Commencing in 9- & 0-Ended Years

Source: McMinn (2019b)




% Decline


1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020

17 May 1890 5 Sep 1899 19 Nov 1909 3 Nov 1919 3 Sep 1929 7 Nov 1940 12 Jun 1950 5 Jan 1960 3 Dec 1968 13 Feb 1980 16 Jul 1990 14 Jan 2000 26 Apr 2010 12 Feb 2020

8 Dec 1890 24 Sep 1900 25 Sep 1911 24 Aug 1921 8 Jul 1932 28 Apr 1942 17 Jul 1950 25 Oct 1960 26 May 1970 21 Apr 1980 11 Oct 1990 21 Sep 2001 2 Jul 2010 23 Mar 2020

-22.6 -31.8 -27.4 -46.6 -89.1 -32.5 -13.5 -17.1 -35.9 -16.0 -21.2 -19.9 -13.6 -38.1


US Recessions in 0-Ended Years The US usually enters into recession in 0-ended years, a trend arising from the Decennial Cycle (see Table 6). Given the severity of the financial crisis in March 2020, a world recession is inevitable. Table 6: 0-Ended Years & US Recessions 1860–2020

Source: McMinn (2006)


US Recession

US Crisis

1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020

Oct 1860 - Jun 1861 Jun 1869 - Dec 1870 Oct 1873 - Mar 1879 ended 10 months early Jul 1890 - May 1891 Jun 1999-Dec 1900 Jan 1910- Jan 1911 Jan 1920- Jul 1921 Aug 1929 – Mar 1933 No recession Nov 1948 - Oct 1949 ended three months early Apr 1960 – Feb 1961 Feb 1969 - Nov 1970 Jan 1980 - Jul 1980 Jul 1990 - Mar 1991 Mar 2001- Nov 2001 began 3 months late Dec 2007- Jun 2009 ended 7 months early ????

1860-61 24 Sep 1869 No crisis Nov 1890 18 Dec 1899 1910-11 1920-21 28 Oct 1929 May 1940 Jun 1950 Autumn 1959 21 Jun 1970 Mar 1980 Aug 1990 Apr 2000 May 2010 Mar 2020

Beginning of Civil War Black Friday. Gold panic Banking panic Stock market panic Antitrust crisis After inflation crisis Black Monday Germany invaded France Beginning of Korean War Credit crunch Penn Central railroad failure US crises. After silver mania Iraq invaded Kuwait After Greenspan Bubble Euro sovereign debt crisis Great Lockdown recession



Bear Market Lows & the Secular Trend Determining the indicators of an emerging bear market low was problematic. Historical trends for DJIA peaks were not repeatable for the corresponding lows. However, there is a secular pattern in the timing of the lows with certain lunar phase ranges evident in certain eras (see Table 7) (McMinn, 2019a). The low on 23 March 2020 fell within these patterns. Table 7: Lunar Phase & DJIA Bear Market Lows, 1890 - 2018 Lunar Phase

Lunar Phase By Era

355-130 A°

1898-1940 1898, 1900, 1907, 1911, 1917, 1932, 1933, 1933, 1938, 1940 1998-???? 1998, 2001, 2002

150-247 E°

1893-1949 1893, 1903, 1914, 1921, 1923, 1934, 1942, 1949

245-355 E°

1957-2020 1957, 1962, 1966, 1970, 1974, 1978, 1982, 1987, 1990, 2001, 2008, 2020 ????-1896 1888, 1890, 1896

Source: McMinn (2019a) Anomalies

2009 2018

The most interesting era was from 1962 to 1990, when all eight bear-market bottoms had lunar phase from 245-325 A° with the Moon sited between 025-170 E° and the Sun between 095-255 Eo. They also repeated in a four year cycle (apart from 1987) - 1962, 1966, 1970, 1974, 1978, 1982, 1987, 1990 and 1994. (NB: 1994 was a correction low with additional bear market lows in 1998 and 2002.) This cycle was well appreciated in financial forecasting during the 1990s. Discussion & Conclusions Peak-AOD fall intervals and lunar phase of the DJIA peaks proved useful indicators of emerging DJIA downturns. They have served this author well in determining the timing of major stock market distress since 2007. 2007 - McMinn (2010). 2008, 2011 and 2015 - McMinn (2015). 2018 - McMinn (2020). Then there is the Decennial Cycle, which suggested that a major market decline and US recession was likely in the year 2020 (McMinn, 2019b). A DJIA bear market commenced on 12 February and a severe world recession is now inevitable given the COVID-19 virus epidemic. Interestingly, the spectacular 2020 crash had no parallels with similar events in US financial history. Such patterns were evident for many other notable crashes: • 1929 - 1987 - 1997. • 1895 - 1899. • 1901 - 1946 - 2001. These and others have been discussed by McMinn (2018). The trends covered in this article have persisted over many decades. They are well worth observing when a major peak may be forming in the market or when a 0-ended year is on the horizon. Given the role played by lunar phase, the Moon and Sun can help explain why these patterns form in market activity. How weak lunisolar forces could possibly determine market outcomes was a complete mystery - it should not happen, but it does. Any solution will fall well outside prevailing paradigms in economics or the sciences.


McMinn, D., 2000. Lunar Phase & US Crises. The Australian Technical Analysts Association Journal. p 20-31. January/February. McMinn, D., 2006. Market Timing by The Moon & the Sun. Twin Palms Publishing, p158. McMinn, D., 2010. Market Timing - Moon Sun Research 2006-2009. Privately published, p185. McMinn, D., 2015. The Crash of 2015. Preprint. July. McMinn, D., 2018. Peak - AOD Fall Intervals As An Indicator of DJIA Corrections. Preprint. March. McMinn, D., 2019a. DJIA Bear Market Lows & Lunar Phase. Market Technician. Issue 86. p 27-33. March. McMinn, D., 2019b. The Decennial Cycle & The DJIA. Market Technician. Issue 87. p 16-22. September. McMinn, D., 2020. DJIA Peaks, Seasonality & Lunar Phase. Preprint. April.



Own gold, sell equities Introduction Many within the investment community have been impressed by the strong postcrash rally seen across key equity markets. They talk about the market recovery as though things were good and mean-reverting back to 'normal'. This is not the case at all.

Robin Griffiths, FSTA (left) Ron William, MSTA (right) Feature media interview

Rolling W-Shape Retest Ahead? Rallies of this type only ever take place just after a crash, even as impressive at this latest one. In fact, what seems to be happening is the realisation that things are not as bad as had originally been thought. You are still always in lossmaking territory. The rise is not bullish, but only seen to be relatively less bad. It’s an ugly but thrilling beauty contest of asymmetric risk and diminishing reward. Irrational exuberance, a key ingredient to the anatomy of a bubble, is now also building up. Speculative hot money is contributing at the margin. Fuelled by an idealistic bounce-back reaction from the pandemic led shutdown, comforted by central banks supplying an unprecedented amount of liquidity. Mainstream rhetoric is behaviourally conditioned not to “fight the Fed”, while traders remain seduced by mantras that “the [v-shaped] trend is your friend”. Technically, we prefer to let the market decide. In terms of the S&P500, the 3000 level will continue to serve as a make-or-break price level (Figure 1), with risk at 2800 (value zone) and a rolling W-shape retest of the crash lows.

Figure 1: Rolling W-Shape Retest Ahead?



Roadmap Cycle, Stage Y & Echoes of 1929 Most of the buying is by the Fed, corporate buybacks and the public, but not the big institutions. In fact, liquidity flows have been exhibiting dramatic short-covering during the entire recovery, now verging at nine-year historic lows (see Figure 2). This warns of a late stage “Minsky moment”, disguised by profit-taking, as smart money heeds the signs and sells positions, or re-hedges, to preserve capital. Our signature roadmap cycle marks this as part of a three-stage process, not an event (see Figure 3). A crashfall (W-X), rally (X-Y), followed by rest of the fall (Y-Z). S&P500’s 80% post-crash rally is larger than average and therefore offers a greater asymmetric downside risk. Figure 2: Who Let the Shorts Out?

Global breadth also remains polarised In the US there are seven stocks that dominate the Nasdaq index. This can easily go to a new high, but remains divergent from the broad-based S&P500 and psychological bell-weather Dow Jones Index.

This also reflects growing perception of the damage to the global economy and the US economy that has already been done. The hit is so bad that the only period of history to compare to it is what happened between 1929 and 1933. The chart analogue from this period continues to serve as a viable roadmap. History does not repeat in exactly the same way, but will likely rhyme in terms of price and time patterns. Market historians should recall the 1929 false V-shape recovery of 51%, before its violent 86% down wave in 1930-32 (see Figure 3).


Figure 3: Roadmap Cycle, Stage Y & Echoes of 1929

Don’t Fight the Fed or Pandemic Gap At some point, and possibly right now, the market will break down. When this occurs gold prices will rise, as a hedge. The gold chart is already making a new marginal breakout upwards. So be aware that the stock market can fail soon. Looking back at the S&P500 chart, it shows the rally phase has completed a five-wave, W-cycle peak (Figure 3). It is likely done. Expect a breakdown. The only reason for it to go the other way is because the Fed is printing money. Although, even this has recently lost momentum, during the recent shrinking balance sheet (Figure 4). Even so, the previous QE injection from the March crash lows is enormous. Many people think this has to be positive. Figure 4: Fed Balance Sheet Unwind




However, note the words of Mr Lacy Hunt, who has consistently been correct on this debate. The velocity of circulation of money goes to zero. It will not work this time. This is made even worse by the zombification of certain industries and companies. While the Fed can influence liquidity, it has little power over insolvency. Meantime, a confluence of technical, seasonal and political factors are all turning negative. Technically, several global markets have carved out interim tops during the month of June, ahead of their pandemic breakaway gaps (see Figure 5). These behavioural pressure zones can be found across the USA-S&P500 (3260-3330), Germany’s DAX (13501-13237), Japan’s Nikkei (23378-22950), India’s Nifty 50 (35262-34769) and China’s Shanghai Composite (3029-3010). Figure 5: Pandemic Gap Across Key Markets

Presidential Cycle Risk, Weak Polls The market’s price exhaustion also coincides with a recent short-term cycle on 8 June, +/- 2/3 days. This might help to compress the traditional seasonality pattern of a mid-summer rally (in July), to flat, or weak momentum, triggering a potential peak-crash signature from August, into September-October. This period also coincides with US political cycles, which exhibit an average downturn of -10% during the four- to five-month lead of a presidential election (see Figure 6) Downside risk is further amplified this year by the drop in the Republican Presidential winlose probability, which is already pressuring the markets lower (see Figure 6).


Figure 6: US Election Cycle Risk & Weak Polls

President Trump was at a high in popularity before the disease hit. He then rallied with the market. However, he has now made mistakes and the big one is in defending police and white power when the rest of the world is pivoting further to Black Lives Matter. His opponents don’t need to speak; Mr Trump talks and digs himself a deeper hole to fall into. For all these reasons technical, seasonal and political - we wish to be out of equities right now. The upside is small and the downside huge. Own gold, sell equities.




Head and shoulders above: Malcolm Pryor MSTA Malcolm Pryor, MSTA Malcolm Pryor is a private trader and investor. He has published several books and DVDs on trading. He has contributed to STA Education for a decade, as a lecturer for the Diploma course and the STA lectures at London University, as a contributor to the Home Study course and, in recent years, as part of the team that marks the Diploma papers. He is an international bridge player, winning a Silver Medal in the most recent World Championships. Malcolm Pryor, MSTA

A private investor’s journey We have, within the STA, colleagues with a wide variety of trading/investing backgrounds; some work for financial institutions in trading roles, some in analytical/advisory roles and some have their own companies providing TA services. We also have a large group who do not work for financial institutions but trade/invest actively either on a part time or a full-time basis. I am primarily a private investor, and feel honoured to have been asked to write an article about my investment journey, during which technical analysis has played a critical role. Early days I became aware of the investment world at a young age. My father was Financial Secretary to the Church Commissioners and on the Asset Committee which was responsible for asset allocation of the Church’s extremely large portfolio of investments. After University I had 20 years working in a corporate environment, first for a US bank, then for a firm of management consultants, acquiring along the way qualifications both as an accountant and as a corporate treasurer. I became increasingly interested in investing, started reading widely, and started to trade and invest. I was heavily restricted in what I could invest in for compliance reasons, but it was the late 90s, irrational exuberance was in full flow and, provided you were long, it was hard not to make money. A couple of years later I had built up sufficient confidence and enough capital to take the plunge, leave the corporate world and become a full time trader/investor. With hindsight I still had a lot to learn, but I had the commitment (and some luck) to make it work. Joining the STA This is the point at which I made one of the most important decisions in my investment journey. A lot of the books I had been reading, for instance Jack Schwager’s excellent interviews with Market Wizards, discussed technical analysis, and I decided to study for the STA diploma. It offered a comprehensive introduction to TA, with 13 or 14 evening lectures from leading practitioners. I have a lasting memory of hearing John Cameron talk about all the information that can be gleaned from just one bar in a bar chart and the insights available into the psychology of the bulls and bears. The course opened my eyes to the power of TA. I think from memory there were six or seven books on the reading list; I read them all thoroughly. Since then the learning has never stopped, and I have read literally thousands of books on trading/investing. Super trader From the Jack Schwager books I also became aware of the teachings of Dr Van Tharp, and of the importance of psychology for the investor. An early step for me was to invest in his Peak Performance Home Study Course for Traders and Investors, which contained five workbooks and four audio tapes and many questionnaires and tests. Later on I signed up for his Super Trader Course, which at that time was a two-year programme, with three main components. The first component involved extensive


work on psychology, including getting to fully understand my beliefs about myself, about investing, about money, and then making significant changes to those beliefs. Investors can take a good system and turn it into a losing system through selfsabotage and psychological errors. The psychological component was at least 40% of the course. The second component was building a robust credible business plan for my investing. The third component was building three trading systems from scratch that matched my trading beliefs and objectives, and then taking at least 30 audited trades with each of the three systems, profitably and with a minimum of errors. Progress through the three components was reviewed by Dr Van Tharp. My three trading systems were all intraday systems. For quite a while I was one of only a small number of people to have formally graduated from the programme. What is a trading system? Many trading systems are touted, but when you look at some of them they only really comprise rules for entry. A fully fledged trading system needs multiple components: • basic methodology/edge; • filters and set up identification; • triggers for entry; entry techniques; • rules for exit at a loss if the trade doesn’t work; • position sizing algorithms (simple, or complex with e.g. pyramiding procedures); • rules (possibly multiple) for exiting once the trade is underway; • portfolio rules (i.e. rules on exposure to multiple trades); and • rules for re-entry once a trade has been exited. Which TA tools have worked best for me? I have found that some of the simplest techniques are the most powerful. For instance many Market Wizards including Vic Sperandeo and Paul Tudor Jones have commented on their use of moving average filters; and some back testing published by Meb Faber covering more than a century shows annualised returns of more than 14% for the US stock market when it is


above its 10-month SMA, but only 3% when it is below its 10-month SMA. In general I tend to gravitate to techniques which are supported in some way by published research, or which are conceptually simple and psychologically compelling, such as (horizontal) support and resistance (especially after a change of polarity) which everyone can see and will likely respond to. Supporting STA Education Over the last decade I have very much enjoyed supporting the STA Education programme. I have run one of the lectures for the Diploma programme (in recent years on risk and money management, using technical analysis to control trading risk; technical trading systems). I also contributed a module to the Home Study Course, and have given two STA lectures at London University. For quite a few years I have very much enjoyed being on Luise Kliem’s team of people who mark the STA diploma papers. Books Back in 2007 I was invited to write a book on spread betting which we called The Financial Spread Betting Handbook. At the

time many people were just finding out about spread betting products and some were attracted to what they saw as easy money. The story line of my book was that there is no easy money; if you want to win at spread betting (or any form of trading) you will need to do some work. I used the analogy of climbing a mountain. The power of technical analysis features prominently throughout the book. The book is now in its third edition and I am told that it has been read by in excess of 100,000 people, some of whom I very much hope will have joined the STA. There were also two follow up books and a couple of DVDs. Private seminars and coaching At one point I gave regular private seminars, but have retired from that now. On a number of occasions I

traded live in front of an audience using five- and 15-minute charts; that is a very good test for your methods and also for your communication skills. (In fact I don’t trade intra-day these days, but the acquired skills help in fine tuning entries and exits for longer term trades). I still provide one-to-one coaching for a strictly limited number of clients. Games One model of investing sees investing as a game. That fits my belief system well, because I have always loved games. I play regular tournament bridge, mostly with my wife, and we have travelled to many parts of the world to take part in tournaments. Most recently in September 2019 I was in the England team which qualified for the World Championships in China (Seniors) and we ended up with the Silver Medal. There are lot of parallels between successful investing and card/board games, most obviously poker, where key skills include combining probability calculations with assessment of the size of the potential gain relative to the size of the potential loss, and knowing when to fold. Major developments in TA Quite a lot seems to have changed since I first starting using technical analysis more than two decades ago: 1) Increased recognition and support for technical analysis from the academic world (e.g. the superb “Technical Analysis - the Complete Resource for Financial Market Technicians” by Charles D Kirkpatrick and Julie Dahlquist) 2) Some of the “rules” of interpretation for chart patterns back tested and assumptions challenged (e.g. the various works by Thomas Bulkowski) 3) Everything we have learned from behavioural finance. The STA community For a successful private trader/ investor, the workplace environment will often be solitary. For me, the wisdom and friendship of the STA community has been a treasured asset over the years.



Interview with Gautam Shah, founder of Goldilocks Premium Research by Nicole Elliott

Gautam and Goldilocks in a global world Looking for a victim for the Market Technician’s series of interviews with leading technical analysts, charming Katie Abberton of the STA’s administration department suggested Gautam Shah - a name I hadn’t come across. She told me he’d just won three gongs at the annual Technical Analyst magazine’s awards - so that was a promising start.

Gautam Shah STA member and founder of Goldilocks Premium Research

Doing some research via the internet and social media I found out that Gautam had earned a distinction at the STA’s Diploma exam in 2003, that he’s been an STA member since 2005, that he spent 16 years as director and chief technical analyst at JM Financial, the brokerage arm of a large Indian financial services group, and that he’s now set up his own research firm in Kolkata. Called Goldilocks Premium Research, he’s obviously well-connected with thousands of business and social media followers. Here is a link to their site for further information:

1. Who/what introduced you to technical analysis? Fresh out of college and perennially fascinated with charts - ever since seeing them on business TV - in 2000 my father took me to a popular institute in India to learn “technical analysis.” To my surprise, I was able to grasp the concepts fast and came top in my batch, which gave me the confidence to make a career out of it. My job was my hobby, which helped me get better without bothering about the monetary side of things. 2. Where and how did you study technical analysis? The short course I took in Kolkata in the year 2000, which had some of India’s biggest technicians as faculty, was my first real exposure to the subject. Thereafter, I was encouraged by my mentor, Mr Vivek Mahajan, to sit the STA Diploma. From there the natural progression was to enrol for the CFTe program, which I sailed through and it helped me to lay the foundations of my research process.

"The short course I took in Kolkata in the year 2000, which had some of India’s biggest technicians as faculty, was my first real exposure to the subject."

3. Who is your hero? What are your essential methods? (The answer to this one is superb!) My hero is the market. It taught me the hard way and helped me stand on my own two feet. I back-tested and studied charts rigorously for many years before “taking the plunge”. Putting to use all the skills acquired though the books on technical analysis and the CFTe and MSTA programs gave me immense confidence. My approach is holistic in nature. I don't have any single favourite study. I like to use



multiple tools, mainly the traditional methods like Dow Theory, patterns, moving averages and other indicators. When they reach a point of confluence, that’s when I pull the trigger in terms of putting on the trade or advising on a trend. I like to do a lot of filtering and use the experience of my ‘eye-appeal’ to my advantage. 4. What are the best/worst aspects of this work? Ever the optimist, the answer to this fourth question kicks off: The best aspect of this work is that there is always something new to learn. The markets evolve and we evolve with them. The ability to predict markets correctly through the tools of technical analysis is a ‘high’ in itself, and I thoroughly enjoy the process. The journey is far more pleasurable than the destination. The worst part is that markets are ruthless; there is no room for error. Sometimes controlling one’s emotions can be a difficult aspect for an advisor or trader. 5. Do you regret your career choice? Did you have a Plan B? Not at all. I am extremely happy to have been exposed to this subject early on. For a start, it gave me a livelihood, wealth thereafter, and the recognition that came with it in India’s trading community; that was the icing on the cake. I joined one of India's largest financial services firm as a trainee in 2003 and quit as a Director late last year; I’m fulfilling my dream to share the highest quality research. I’ve acquired enough skills over the last two decades so that reverting to prop trading would be my Plan B. 6. What’s the best piece of advice you were given and what advice would you give to someone starting on a career in technical analysis today? The best piece of advice was from my mentor: "price discounts everything". Respect the price action to get things right. This is increasingly true in today's world as we see a major disconnect between the price action and what’s happenings in the economy and society generally. My advice to new entrants would be to analyse with an open mind, ignoring the noise, and adopt a holistic approach. 7. What areas of further research are you interested in, or might you suggest? I’m keen on studying Gann; the subject is fascinating. I hope to take some time out soon to go in-depth into this subject and use it in conjunction with my existing research process. 8. His two favourite books are: (pictured. left) Technical Analysis Of Stock Trends by Edwards and Magee Japanese Candlesticks Charting Techniques by Steve Nison Funnily enough, his top tip has always been my firm favourite. His second choice is right up there in the pantheon of the greats and favoured by many.

"With the advent of social media, algorithm trading and artificial intelligence, financial markets have evolved. The environment is far noisier..." 9. Please comment about things we have missed so far, and general feelings about the subject. With the advent of social media, algorithm trading and artificial intelligence, financial markets have evolved. The environment is far noisier, trends are playing out faster and hence today's technician needs not only use the traditional methods, but should also combine them with modern tools like market profile, relative strength, breadth studies etc. A combination of both methods should help the technician tame markets consistently. This is exactly the approach we follow at Goldilocks Premium Research.

I think you’ll agree that this is sound advice, concisely imparted, from someone who has obviously fallen into the right career. A combination of luck (watching business TV), encouragement to treat charts seriously, and flair go a long way in any aspect of life.



The Thirty-Second Jewel: Thirty Years behind Market Charts from Price to W.D. Gann Time Cycles By Constance Brown Book review by David Watts, MSTA

W.D. Gann is perhaps the most controversial market analyst of the early- to mid-20th Century. He certainly left a widely published legacy with some startling claims to match. His early writings are consistent with the general technical analysis methods then in use. His patterns and tape reading, trading rules and his swing trading methods are all widely used. They are fairly well known, as is his strange geometry and - more so - the importance he placed on time, such as the time intervals of swings.

The Thirty-Second Jewel

These, in many respects, are all that you probably need to know to successfully use a number of Gann methods in market analysis. But then, what are we to make of those esoteric spiral and hexagram calculation charts found in his courses? Where did all these extraordinary diagrams come from? What was he actually calculating? Who knows!

"’s more an entire course in Gann methods rather than just yet another book. It’s as thick as perhaps four paperbacks and you need muscles to carry it around."

Add in the fact that he appears to have written in a coded language and secured non-disclosure agreements from his students and the secrets remain hidden, and we then have a wide-open field for unlimited speculation on how to apply his methods and whether he actually used them himself. That speculation has been ongoing for the last 30 years at least, with everything from the periodic table to ancient astronomy considered as a basis for his methods. So the real question is: can someone open the book on this mystery, and then show the correct full understanding and demonstrate

his actual methods? Such is the challenge Connie Brown has taken on in this book, and it’s no mean task, incorporating world-wide travel for more pieces of the puzzle, the quest for the Gann suitcase, the return of his Masonic regalia and the recovery of his actual methods. It’s a big ask and needs a very dedicated researcher. First we need to ask: what does W.D. Gann say himself about his methods? He himself claimed that his methods were unlike any other. Writing under his Pen name OROLO, he wrote the following: From the OROLO ad in The New York Herald, 23 May 1909 “Flammarion tells us everything is based on vibration. Through this law Prof. De Forest discovered wireless telegraphy. Euclid, the great mathematician (also known as the Father of Geometry!), whose work was perfect, taught that mathematics was the basis of everything, and by it we prove vibration. I am the only man who has applied this old law to speculative markets and proved it correct. No other living man has possession of this


secret knowledge, and there is no other information 'just as good' that tells you what the markets will do. I don't boast of the past. I tell you what the markets will do in the future." From the EBook OROLO by the Gann Study Group That’s quite a marketing claim pretty well unmatched to this day. So what to make of The Thirty Second Jewel? Well, firstly it’s more an entire course in Gann methods rather than just yet another book. It’s as thick as perhaps four paperbacks and you need muscles to carry it around. It contains some 33 chapters, not totally surprisingly as Gann himself was a Freemason. What of these chapters? So, the first eight are dedicated to the early history of panics in England during the 19th Centenary, then follow up with chapters on Fibonacci, Elliott Wave and then even a lesson on critical thinking skills. Then the first Gann chapter, No. 8, finally introduces Gann's trading rules. It’s only at Chapter 9 that the Gann narrative and new material really begins. First, we have introductory material, on music, Euclidian geometry and even non-Euclidean geometry. This obviously is set to act as a primer for the later part of the book. For many, what is truly unique about this book is the information that can be gleaned from the recovery of Gann's suitcase, which provided first-hand material not written in that veiled coded language. The stories and rumours of that suitcase have swept around the Gann world for many years. The elusive case was handed by Gann to Elinor Smith, his pilot for many years, after their last flight together. So this book also has a narrative, in particular the journey of discovery and recovery of that Elinor Smith suitcase and then the reveal: what precisely did it contain? Then comes the story of W.D. Gann, the Freemason. The entire story is like a real Sherlock Holmes novel, or something from the Da Vinci Code, and you have to hand it to Connie on her courage and worldwide travels in the quest for this knowledge. So what was in the suitcase? I will leave that for those who read the book, but just to say it's obviously related to the further material that follows in the later chapters. Apart from the Gann story, we also have his methods and in Chapter 16 we find the elusive "Law of Vibration" explained, though it still needs to be developed. But what of the secrecy and veiled language? Did you spot something strange about that pen name of "OROLO"? It’s in the next chapter that Connie reveals how the "Law of Vibration" is hidden in his novel The Tunnel Thru the Air and, in doing so, shows the basis of Gann's coding methods. The book also looks at those time cycles and indeed how "Harmonic Time" is constructed, which I have not seen as


well explained anywhere else. The Ancients appear to have had a very different understanding of time to the one we have today - perhaps more like J. W. Dunne's Theory of Time, more elastic and not quite as linear as we view it today. Indeed Quantum Physics can seems to be able play all sorts of games with space and time. What we can conclude is that Gann used more than the standard solar time as we use it today. Perhaps the most controversial aspect of the book is Gann's use of planetary harmonics by the use of angles and aspects, planetary lines etc. I know many view this as magic, and nothing to do with technical analysis, but clearly it was part of Gann's predictive techniques and hence deserves to be included. You can choose to use it or not depending upon your views. We have the more geometric approaches that Gann invented (or more properly rediscovered) including "squaring price and time", "squaring the range" and "squaring highs and lows". Just these techniques can fill an entire book, even if seemingly missing from Euclid. So amongst all this complex harmonic geometry, are there any easy wins? (Or as some have suggested by the time you have completed all this complex Gann analysis, had the opportunity to trade been lost?) Well, Chapter 31 is the quick win for me. That 10-year computer modelled T-Note chart looks highly accurate, so much so that - provided it continues to hold - it alone is worth the price of this book. Then we have the "twist", the revisit of the 19th Century English past that was outlined in the first chapters. Is this volatile past again to be part of our future? Maybe when the Gann wheel turns again? Indeed perhaps so.

So, in conclusion, this is a massive volume, the most comprehensive work I have ever seen on W.D. Gann. Indeed it is destined to become the definitive Gann bible of our time. But it’s more that. It is well written and its narrative carries both the story of a quest for Gann knowledge and an explanation of his methods. This is the book that finally opens the suitcase to Gann’s world and his secrets. Those methods the ones that he veiled and hid in his books. In truth, it will appeal to those analysts who are already captured by the story of this extraordinary man, his strange language and his methods in the analysis of markets. It’s a Sherlock Holmes story of our time.



Bytes and Pieces

Software reviews by David Watts, MSTA

How Programming in Python Can Improve Your Trading Results

The Alpha Formula - How to beat the market with less Risk

Larry Connors (famous for his book

Larry Connors and Chris Cain have won the 2020 Charles H. Dow Award for outstanding research in Technical Analysis. So their new book The Alpha Formula deserves a read.

Investment Secrets of a Hedge Fund Manager) has published over time a number of technical research books and courses that have become classics. Now he has turned his attention to Python, the programming language. Python allows you to quickly conduct research on technical patterns and market runs. Therefore being able to programme with Python has become a default programming skill. Connors has recently published a number of resources on Python, both a book and a full introductory course.

The aim of this book is to present a method of systematic quantified strategies, that will perform well in all market conditions. This book is said to be backed by investment concepts created by billionaire Ray Dalio, author of Principles, AQR, the second-largest hedge fund manager in the world. Nick Glydon has presented a number of STA lectures upon very similar concepts. (Nick where is your book? ) You might also want to explore Connors’ "Quantamentals" approach via the webinar video. Quantamentals, he explains, combines fundamental analysis, technical analysis and quantitative analysis to quantify trading decisions. /connors_research

TA - Python Library As mentioned earlier, Python is a default programming language to learn - it's also easily translated to an number of propriety technical coding language that have been used in the past - but far easier than those used by Esignal, NinjaTrader or MT4. So once you have done the course the question now do I have to construct the code for all the common technical indicators? Well no - there are a number of code libraries of code available for Python.



Did you know? The HOVIS Trader Trading successfully since 2009 - Helping to demystify the markets for you


Bringing home the Brown Bread

One of the rarely discussed issues with all technical oscillators is asymmetry. They behave very differently depending upon the market phase they encounter, so oscillators especially will reach oversold conditions continually in bear markets but will rarely reach oversold conditions in bull markets. Just the opposite of what we would want. Thus if interpreting a chart with technical indicators or constructing a trading signal, it’s necessary to correct for this anomaly. This is one reason that many choose to discard technical oscillators entirely, but they do provide further insight particularly in respect of momentum. So there are a number of ways to overcome this asymmetry. Typically for RSI, one way is lifting the oversold and overbought zones during bull markets and vice versa for bear markets. A second simple is to use a moving average cross over as this signal is independent of the level of the RSI. Alternatively as the relationship at least for bull/bear market phrases is inverse, we can use that to correct the oscillator over a phase length. My favourite method for example is to correct the stochastic by multiplication of inverse of a moving average of the average bear/bear market cycle length. Suddenly the cycle is detrended and the oversold zone in a bull market or bear market is far more consistent.

The Hovis Trader is a British Technical Trading website using the early and hence less esoteric trading methods of W.D. Gann. document/4241089

First there is the big picture cycle analysis and the Hovis Trader uses a number of cycles especially the 18-year cycle to anticipate the large bull and bear market turns. Then there are the classic swing trading methods using swing charts and patterns, which WD Gann was using some 111 years ago. The method is classical trading - so big picture monthly charts give context, followed by focussing down gradually through weekly, daily and intraday charts. Swing charts are used to define support/resistance and breakouts form double bottoms etc. The Hovis Trader also uses Gann's price and time spiral calculators for define support and resistance levels. There is notable success with defining large cycle tops and bottoms hence major bull and bear markets. Recent work is more focussed around his trading system and swing trading approach. I see there is a monthly chart showing an anticipated top later this year and then another major time cycle projected mid next year.

Eminent authors, John J Murphy, Robert Prechter and David Charters are all Fellows of the Society of Technical Analysts. Full list of Fellows



Benefits of STA membership

The STA holds 11 monthly meetings in the City of London, including a summer and Christmas party where canapés and refreshments are served.

As a service to our members, many of whom are unable to attend all our monthly meetings, we have been making videos of meeting presentations for several years.

Key benefits • Chance to hear talks by leading practitioners. • Networking. • CPD (Continuous Professional Development).

Key benefits • Never miss the latest meeting. • Browse our extensive video archive of previous meetings.

The STA has been running educational courses on technical analysis for 25 years.

Student members have access to an education forum which is available in the member’s area of the website.

Key benefits • Courses are taught by leading authorities in their field such as authors, highly regarded professionals and Fellows. • The STA also offers a Home Study Course for self-study.

The STA ”Market Technician” journal is published online twice a year. Key benefits Members receive the latest issue of the “Market Technician” via e-mail. They are also able to access an archive of past editions in the member’s area of the website. Technical analysts from all over the world contribute to the STA journal.

Key benefits Members can ask questions on technical analysis in the Technical Analysis Forum which a course lecturer, author or Fellow will answer.

The STA has an extensive library of classic technical analysis texts. There are over 1000 books in the collection. It is held at the Barbican Library with a smaller selection available at the City Library, a reference library in London. As a member you can now browse which titles are available on-line. Key benefits Members are encouraged to suggest new titles for the STA book collection and, where possible, these are acquired for the library. The complete listing of books held can be downloaded in Excel format from within the member’s area.

The Society of Technical Analysts and the Chartered Institute for Securities & Investment (CISI) have formed a partnership to work together on areas of mutual interest for our respective memberships. Key benefits CISI examination exemptions for STA Diploma Part 1 and 2 holders. MSTAs with three+ years’ experience can become full members (MCSI).

Endorsed by the Chartered Institute for Securities & Investment (CISI), members of the STA are entitled to receive continuing professional development points (CPD for their attendance on the taught course lectures. Key benefits • Remain compliant. • Be informed of all new industry developments.

STA members benefit from significant discounts on technical analysis books, magazines and software. Key benefits STA members currently enjoy discounts from: • Your Trading Edge. • The Technical Analyst Magazine. • MT Predictor. • CQG. • Tradermade and the Global Investor bookshop.



STA Calendar 2020/21

Tuesday 13 October 2020

More information about the STA events can be found here

Wednesday 14 October 2020

6.30pm Via Live Webinar with Charles Morris, ByteTree Asset Management

STA Diploma Part 1 Course commences (online)

Thursday 22 October 2020 STA Diploma Part 2 exam (online)

See pg.4 for more info

Saturday 24 October 2020 24/24/24 IFTA’s Live Conference Webinar

Tuesday 10 December 2020 6.30pm Speaker to be confirmed Via Live Webinar

Tuesday 9 February 2021 6.30pm Speaker to be confirmed

Tuesday 13 April 2021 6.30pm Speaker to be confirmed

Tuesday 10 November 2020 6.30pm Via Live Webinar Jack D Schwager

Wednesday 13 January 2021 STA Diploma Part 2 course commences (online)

Monday 1 March 2021 10.00am STA Diploma Part 1 Exam

Thursday 22 April 2021 STA Diploma Part 2 exam

Monday 7 December 2020 STA Diploma Part 1 exam (online)

Thursday 14 January 2021 6.30pm Market Outlook Panel

Tuesday 9 March 2021 6.30pm Speaker to be confirmed

Meetings currently being held via webinar due to COVID restrictions until further notice.

Congratulations to the latest STA Diploma MSTAs Distinction Abdullah Abbasi Andrew Graf Victoria Scholar

Pass Drew Beasley Alastair Craig Charles Lungkwai Chan Dr Mayen Egbe Angelo Loizzo Asma Binti Nasarudin Marcel Schouten Fabian Schubert Nur Azzam Bin Zakaria Olivier Zeyssolff



STA Education: the LSE courses, and the Diploma in Technical Analysis The Education Channel monthly meetings videos, are available to members via the member section of







David Keller

The five modes of mindful investors


Andrew Pancholi

The most critical economic and financial time period of our generation


Zaheer Anwari

Using the UK and US indices to determine bullish and bearish markets


Sankar Sharma

Crush it with clouds


David Linton

The future of technical analysis


Robin Griffiths

Review of the past 50 years and outlook for the future


2020 Outlook

Panel debate with ACI UK


Andy Dodd

Price matters but process more so


William Reardon

Logical price action: Utilising Wyckoffian principles in modern times


Tim Parker

The role of subjectivity in technical analysis


STA Library STA members are eligible to join the library as standard adult library members. They need to attend in person to the library to join - bringing with them proof of name (STA membership card, bank card, staff pass etc) and proof of address (driving licence, recent bank statement, utility bill etc). The library address is Barbican Library, Silk Street, London, EC2Y 8DS. google maps For full details on address and opening times, visit



Meeting the challenges of COVID-19 The new ‘norm’ of social distancing requirements has meant that swathes of organisations have had to change their working practices and adapt the services they deliver. The STA education team followed the lead of many in the educational world by investigating how they could deliver the classroom based course and examinations online. The transition to live webinar based lectures for the last three sessions of the STA Diploma Part 2 course was smooth and we continued to engage with students leading up to the Part 2 exam, which was re-scheduled for July. The start of lockdown also coincided with our in-house technical analysis course for King’s College London students, and we similarly delivered the last few lectures and subsequent STA Diploma Part 1 exam online, seamlessly.

Whilst we hope that over time the world will return to more social interaction - this pandemic has demonstrated that it is possible to be agile and amend working practices to suit the environment we find ourselves in. This ‘disruptive’ period has been a useful tool to challenge the way we deliver our exams and the education team will be looking to see whether some of the practices we have adopted will be here to stay in the long-term.

The STA Diploma Part 1 exam is already a computer based exam, using the online platform Exambuilder so transition to home based examination was simpler. The STA Diploma Part 2 exam needed more adaption as it is traditionally held as a three hour written paper, with students annotating charts by hand. However, with the tireless work of the Chief Examiner, Luise Kliem, adjustments were made to the structure of the exam, enabling students to sit the exam using Word and PowerPoint to annotate the charts. In July, candidates for both the STA Diploma Part 1 and Part 2 were able to sit the exam in their own homes on their own computers, around the world, under invigilation using Zoom.

Booking well underway for the CISI and IFTA accredited STA Diploma Part 1 and Diploma Part 2 courses. The two courses have been designed to cater for newcomers and experienced professionals who are looking to challenge themselves. They will learn to develop the methodology, tools and confidence to make better informed trading and investment decisions in any asset class, anywhere in the world.

Given that there hasn’t been much improvement on the Coronavirus situation and that many employees are not yet in their office full-time - the autumn Diploma Part 1 Course will be now be held online instead of in central London.

STA Education: Get qualified in technical analysis


STA Diploma Part 1 Course

The 2020 course will start on Wednesday 14 October 2020 and consists of seven Wednesday evening online lectures (6.30pm-8.00pm). It costs £995 if booked by 1 October 2020; £1195 thereafter. This course is designed for those with little or no previous experience and individuals looking to initiate themselves in the practice of technical analysis. The course will give you an introduction to technical analysis and provide you with the tools to progress to the Diploma Part 2 Course. The Diploma Part 1 schedule enables you to maximise your learning while complementing your work and home life. The course is accredited for Continuing Professional Development (CPD) by the Chartered Institute for Securities and Investment (CISI). Programme at a Glance • Introduction to technical analysis and comparison to fundamental analysis • Construction and interpretation of Line, Bar, Point and Figure and Candlestick charts; introduction to Heikin- Ashi, Three-Line Break, Renko and Kagi charts • Support and resistance, theory, identification, utilisation, breakouts • Trend and return lines, where and how to draw them • Fibonacci numbers and retracements • Reversal and continuation patterns, target projection from patterns • Moving averages, different types and how to interpret them • Momentum, indicators/oscillators, relative strength, sentiment measures; definition, interpretation and how to use them • Dow Theory, introduction to Elliott Wave Theory - how to use technical analysis strategically

6x1 evening a week classes 1 evening exam preparation session 2 hour exam Qualification accredited by CISI and IFTA

When? Dates for 2020 course are Weds 14 October; Weds 21 October; Weds 28 October; Weds 4 November; Weds 11 November; Weds 18 November and Weds 25 November.

The lectures will be delivered live via Zoom webinar and will be fully interactive with students being able to ask questions as they would in a classroom. Any students unable to watch live will be able to catch up with a recording post event and email the STA office if any questions. They may also post questions on the STA Student Forum which will be answered by course lecturers. The Part 1 exam will be held on Monday 7 December during the daytime and provision has been made for candidates to sit the exam in their own personal space, using Zoom invigilation.


“Excellent course to compliment technical analysis with fundamentals for my day to day job role.” Roger Bird, Student on the Diploma Part 1 Course, 2019




STA Diploma Part 2 Course • •

12x1 evening a week classes Exam preparation video & guide booklet 3 hour exam Qualification accredited by CISI and IFTA

Advanced moving average, momentum indicator and oscillator techniques; use of market breadth and sentiment measures. The practical application by market professionals of Dow, Elliott Wave and Gann Theory; Ichimoku Charts; Market Profile®; Behavioural Finance; Risk Management - and much, much more.

Videos of lectures are available to students who miss a session. Also copies of all lecturers’ presentations are emailed to students on the day following each session. When? Dates for 2021 course are Weds 13 January; Weds 20 January; Weds 2 January; Weds 3 February; Weds 10 February; Weds 17 February; Weds 3 March; Weds 10 March; Weds 17 March; Weds 24 March and Weds 31 March.

The 2021 STA Diploma Part 2 course will commence on Wednesday 13 January 2021 and consists of twelve Wednesday evening online lecturers (6.30pm-8.00pm). It costs £1995 if booked by 31 December 2020, £2,995 thereafter. The Part 2 Course provides you with advanced professional knowledge, understanding and skills to use technical analysis as a vital investment tool or to pursue a career in technical analysis within the investment community. Basic technical analysis knowledge is a prerequisite for attending this course. During the 12-week programme you will learn from leading experts and develop both theory and practical experience in the major techniques, analytical tools and indicators to enable you to select the most advantageous portfolios, trades, hedges and much more for your clients, your employers or your own trading systems.

The lectures will be delivered live via Zoom webinar and will be fully interactive with students being able to ask questions as they would in a classroom. Any students unable to watch live will be able to catch up with a recording post event and email the STA office if any questions. They may also post questions on the STA Student Forum which will be answered by course lecturers. The Part 2 exam will be held on Thursday 22 April during the daytime and provision has been made for candidates to sit the exam online in their own personal space, using Zoom invigilation.


The Diploma Part 2 Course provides you with a deeper understanding of technical analysis, added confidence and the capabilities to further develop your career. The course is accredited for Continuing Professional Development (CPD) by the Chartered Institute for Securities and Investment (CISI). Programme at a Glance • The practical application of support, resistance and price objectives by market professionals - how they build on the essential basics and add advanced techniques e.g. Fibonacci projections; working in different time frames. • Construction and advanced applications of Candlestick and Point and Figure charts, including Point and Figure moving averages and indicators.

“An excellent course that has been very well put together. It is comprehensive and covers a good breadth of pertinent subject matter. The course is good value for money.” Mayen Egbe, Student on the 2020 Diploma Part 2 Course

Special Journal Offer! We have put together a great offer for you. Book onto any of our courses, including the Home Study Course, before 31st October 2020 and save £50. SIMPLY CLICK HERE and enter code 'JNLPROMO' in the coupon box to redeem your £50 discount.



Balance professional development and your personal life with the STA Home Study Course


WHY PURCHASE THE HOME STUDY COURSE? The world-class e-learning Home Study Course (HSC)© is written by leading industry practitioners, making it one of the best online products available on the technical analysis market. Whether this is your first introduction to technical analysis, you want to refresh your existing knowledge, or you wish to become a qualified technical analyst, the STA offers a tailored Home Study Course as part of our portfolio of world respected courses preparing students for our internationally accredited STA Diploma qualification. You can learn from the comfort of your home at times that best suit you. Although website based, it is fully downloadable and may be used online or offline via PC, Mac, iPad or Android machines. WHAT WILL IT COVER? • The syllabi for both STA Diploma Part 1 & Part 2 examinations • 15 in-depth subject teaching units • Exercises to self-test progress • Exam preparation module & video • Advice on report writing. ...find out more here

Since the HSC is International Federation of Technical Analysts (IFTA) syllabus compliant it can also be used to prepare candidates for both the IFTA CFTe I and II examinations. WHO IS THE COURSE FOR? The course is intended for individuals who want to use technical analysis in a professional manner or who want to become a qualified technical analyst and advance their career. Enrol and start studying now! For more details click here or contact the STA office on +44 (0) 207 125 0038 or WHEN WOULD YOU LIKE TO START? Learn at your own pace rather than in a classroom - the HSC course is designed for those who need a truly parttime study option with maximum flexibility! Buy now: £1,195.00 51

STA Executive Committee

Richard Adcock MSTA Vice Chairman & Co Secretary

Jeff Boccaccio MSTA Director

Patricia Elbaz BA (Comb hons) MSTA Director

Mark Tennyson d’Eyncourt FSTA Programmes

Tom Hicks MEng MSTA MSCI Chairman of the STA

Karen Jones BSc FSTA Treasurer

Clive Lambert MSTA MCSI Vice Chairman

Charles Newsome MSTA FCSI Director

Eddie Tofpik MSTA, ACI-UK, ACSI Head of Marketing

David Watts BSc (Hons) CEng MICE MIWEM MSTA Systems and Website Specialist

Daniel Wynne BA (Hons) MSTA Chartered FCSI Director

Please keep the articles coming in! The success of the Journal depends on its authors, and we would like to thank all those who have supported us with their high standard of work. The aim is to make the Journal a valuable showcase for members’ research - as well as to inform and entertain readers. Keep up to date with the conversation by joining us on:


STA Advertising Rates 2020/21 The Society of Technical Analysts Journal “The Market Technician” is a bi-annual publication, published in pdf format only. The STA will accept advertisements in this publication if the advertising does not interfere with its objectives. The appearance of advertising in the Market Technician is neither a guarantee nor an endorsement by the STA.




Inside Cover


A4 Portrait, 210mm (w) x297mm (h), plus 3mm bleed

Full Page


A4 Portrait, 210mm (w) x297mm (h), plus 3mm bleed

Half Page


Landscape, 198mm (w) x 139.5mm (h)

Quarter Page


96mm (w) x 139.5mm (h)

Circulation The Market Technician has a circulation of approximately 1500. Readership includes technical analysts, traders, brokers, dealers, fund managers, portfolio managers, market analysts, other investment professionals, and private investors.

Contact Contact Katie Abberton, Society of Technical Analysts on or +44 (0) 207 125 0038 for more information.

Advertising policy Advertising is subject to approval by the STA Journal Committee. All advertisements must be non-discriminatory and comply with all applicable laws and regulations. The STA reserves the right to decline, withdraw and/or edit at their discretion.

The Society is not responsible for any material published in The Market Technician and publication of any material or expression of opinions does not necessarily imply that the Society agrees with them. The Society is not authorised to conduct investment business and does not provide investment advice or recommendations. Articles are published without responsibility on the part of the Society, the editor or authors for loss occasioned by any person acting or refraining from action as a result of any view expressed therein.

Society of Technical Analysts Dean House Vernham Dean Andover Hampshire SP11 0JZ tel: +44 (0) 20 7125 0038

The Society of Technical Analysts (STA) is recognised worldwide as one of the largest and most widely respected not-forprofit organisations which trains and accredits members of the investment community, from industry professionals to private individuals, interested in the study of technical analysis. We have been setting the standards in technical analysis for nearly 50 years and have been teaching at several UK universities such as LSE, King’s College, Queen Mary etc. for nearly 25 years.

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