Market Technician No 92 - Spring 2022

Market Technician

RESEARCH

Issue 92 - March 2022

The Journal of the Society of Technical Analysts

INVEST IN EGYPT THE TECHNICAL OUTLOOK pg 12

18

29

44

46

RESEARCH

RESEARCH

ANALYST FOCUS

BOOK REVIEW

Heikin-Ashi Magic

The 9/56 Year Cycle & DJIA Bear Markets

Patricia Elbaz puts 5 questions to Murray Gunn

Trend Following Mindset by Michael W Covel

Sankar Sharma

David McMinn

Patricia Elbaz

Gerry Celaya

Contents

FOREWORD Editor's Letter 03

NEWS Greetings from our New Chairperson 04 Eddie Tofpik Meet our new STA Committee Member 04 Gerry Celaya New STA Partnership with The Broker Club 05 STA and Commodities People - 2021 in Review and the Year Ahead 06

RESEARCH Invest in Egypt: The Technical Outlook 12 Mohamed Hassan Heikin-Ashi Magic 18 Sankar Sharma The 9/56 Year Cycle & DJIA Bear Markets 29 David McMinn Our Cross Asset Analysis Suggests a Sell in May and Go Away 36 Jean-Francois Owczarczak ANALYST FOCUS Analyst Interview: Patricia Elbaz puts 5 questions to Murray Gunn 44 BOOK REVIEW Trend Following Mindset by Michael W Covel 46 Gerry Celaya

THE STA Benefits of STA Membership 47 STA Calendar 2022 48 The Education Channel 49 STA Library 49 Bronwen Wood Memorial Prize 2021 50 Special Journal Offer 51 © STA Home Study Course 52 Congratulations! Latest STA Diploma MSTAs 53 STA Executive Committee 54 STA Advertising Rates 55

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.

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FOREWORD

Editor's Letter

Tweaked and perfected over the past two years the live on-line versions of the Diploma 1 and 2 STA courses have been a real hit.

Nicole Elliott, FSTA Technical Analyst, Private Investor, E-journalist for the STA

Here we go again; I hadn’t imagined we’d still be in some sort of Covid-19 limbo. Yet, as Mark Twain said: ‘History doesn’t repeat itself but often rhymes’. Yet the economy hasn’t dropped to the terrifying lows of Q1 and Q2 2020. Somehow we are learning to co-exist with infection, government imposed and self-imposed strictures, and the new environment generally.

I’m sure you all know of friends and family who have got sick and pulled through - including several STA Board and Committee members.

My condolences to those who know people who haven’t.

Diploma Part I exam can be sat at the candidate’s personal space online invigilation courtesy of the new technologies including using the camera on a laptop. The Diploma Part 2 exam, with essay-type answers, is now also conducted using remote supervision, again increasing global accessibility.

One of the salient features of life last year was our increasing reliance on and, more importantly, our growing confidence in using socially enabling technology. It’s no longer the domain of the Generation Z cohort (and their TikTok addiction), but a tool for good, for connectivity and for learning.

Talking of which, the live on-line versions of the STA Diploma Part 1 and 2 courses have been a real hit.

Tweaked and perfected over the past two years, they are a very viable and enjoyable version of traditional inhouse teaching – and they allow for a much wider international audience.

Interactive and delivered in English, here we are at an advantage because ‘Globish’ [Global English] is the most widely spoken second language.

Likewise, our on-line monthly meetings have benefitted with speakers from all corners of the world, willing to deliver their talks, plus live question and answer sessions, recorded virtually. I feel this is a real leap forward and would personally like to thank Niels Kaastrup-Larsen, Tom Bundgaard, Robin Mesch, Alexander Aburumieh, Denise Shull and the legendary John Bollinger for their time and effort. This global reach is so very inspiring that we hope to continue with a mix of virtual and in-person monthly meetings.

Being a multiple-choice format, the

Do take a look at the lists of successful exam candidates, (pg.53) distinctions and the Bronwen Wood memorial prize winner (pg.50) towards the back of this issue. I think you will agree that the STA has fans well beyond its original UK base.

We also encourage all technical analysts to submit material for consideration, either for a monthly meeting (in-situ or virtual) or for publication in this journal. This issue is no exception to our global reach,

with research papers from Australia, Egypt, Europe and more. Members are reminded that they can view full monthly presentations as a video, or a brief written synopsis is available in the blog section of our website, which all can view at: www.technicalanalysts. com I also think that global connections between technical analysts can be stretched and strengthened via informal discourse. For this please consider taking a look at our LinkedIn and Facebook pages (just type in Society of Technical Analysts and they’ll pop up), or our Twitter feed @STA_ORG. If you need help, offer a teenager a tenner and they’ll sort it out for you in a jiffy. Feel free to discuss your ideas and compare notes with other like-minded people involved in technical analysis.

To more practical matters: Concerning the society’s top brass, you’ll note there are several new additions and shifting of positions at the STA’s Board and Committees. Some are detailed in this magazine, others in the list of current position holders. (pg.54) Remember, most of the work carried out on behalf of the society is on a voluntary basis, so we always welcome suggestions and hands-on contributions from our members.

Consider taking a more active role if you can. New transferable skills and new horizons ahoy!

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NEWS

Greetings from the Chair I am honoured and delighted to be the new Chairperson of the Society and would like to take this opportunity to thank Tom Hicks for all his hard work over the last few years.

I very much look forward to building on Tom's success by continuing his vision to work with external partners to build awareness of technical analysis to the wider financial community. In doing this, we will build on the four core foundation stones that make up our Society.

Providing information, education, examination and accreditation in Technical Analysis.

To this end we will seek like-minded friends in the greater community that will help us all and whom we can also help. In doing this we will have an overarching principle... to seek to enhance and bring what is best to all of you... our members. We will do this first and last... and always.

Eddie Tofpik, MSTA Chair, Society of Technical Analysts Email info@technicalanalysts.com

The STA couldn't run without the hard work and dedication of the STA Executive Committee - entirely made up of volunteers - and its helpers. If you are interested in joining our team of volunteers, we would love to hear from you.

Meet our new STA Board Member Gerry Celaya MSTA We are delighted to welcome Gerry Celaya back to the STA Executive Committee, taking over from Eddie as our new head of marketing. Gerry first joined the board in 1999, serving on the committee till 2005.

Gerry has been professionally involved in global market research and investments since 1986. He is a director at Redtower Asset Management and Tricio Investment Advisors, providing research and risk management consultancy services in the FX and investment markets to professional clients around the world.

Gerry previously ran the technical trading desk whilst also managing some risk for the model trading desk at Bank of America in London and also worked at American Express Bank in London and provided global FX, fixed income, commodity and equity market research for the bank and their international FX payments company for nearly 20 years.

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NEWS

New STA partnership with the Broker Club On 11 January 2022, the Society took another step forward in its mission to build strategic alliances within the financial community by creating a Memorandum of Understanding (MoU) with The Broker Club (TBC). In his first meeting as Chair, Eddie Tofpik formally signed the document with Sally Jones, CEO of The Broker Club. The virtual meeting then moved forward to a fascinating tri-partite discussion of Crypto with speakers from the STA, ACI-UK and The Broker Club participating.

education and topical debate, with a particular focus on market regulation and compliance (e.g. MAR, GRC, ESG obligations) as well as technology and markets innovation.

As such it fits well with the STA and ACI-UK. We look forward to many years of collaboration, working together on common goals for the betterment of both STA and The Broker Club members.

The new agreement is important for the Society as the forging of these links broadens the appeal of the STA, increases its exposure and as such forms a vital pillar of our strategy to expand and re-focus the organisation.

The Broker Club is an active community for all brokers operating within Financial/Capital Markets. It supports firms - and the wider industry - through information sharing,

We are an exclusive community for Financial Markets Brokers.

We provide our members with relevant and topical information as well as providing a platform forum for discussion. We champion issues specific to the Broker community providing one single voice to vendors, suppliers and back to the community.

www.thebrokerclub.org

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NEWS

STA and Commodities People - 2021 in Review and the Year Ahead Ben Hillary

Managing Director of Commodities People

Introduction: ‘History Speaks’ Firstly - on behalf of Commodities People (the world’s leading organiser of commodity and energy trading centric events and content) I’d like to wish all of our friends at the STA a very happy New Year (as I write this in January...). I hope everyone has stayed well at that 2022 brings us something like normality.

Secondly - I’d like to note that I am not a technical analysis expert; however we have the good fortune to work closely with some of the very best when it comes to developing our event agendas, webinars and general content.

On that note I’d like to say a particular thanks to those members we’ve worked with in 2021 - Trevor Neil, Clive Lambert, Nicole Elliott and Katie Abberton.

An absolutely enormous thanks particularly to Eddie Tofpik - whom we have been working closely with for a number of years now - as everyone who knows him can attest: brilliant to work with professionally, but also an absolute joy to know personally.

Thanks Eddie!

2021 - Resources and learnings While various members of STA were involved in panels and discussions across a range of subjects, I’d highlight the below as being of particular interest for members: All sessions around 45 minutes each and well worth a watch!

“Man vs Man + Machine” Recording from Commodity Trading Week - June 2021.

How TA can fare against man and algo?

Who comes out on top?

Technical analysis - Looking for the edge Recording from Energy Trading Week - October 2021. Covering subjects such as the relevance of TA in an era of algo trading, liquidity challenges and comments by market.

In both cases - excellent sessions from Eddie, Trevor, Clive and on the latter session Amit Upadhyay (Director, Fidelis Fund)

Weaponizing the Traders’ Mind A fascinating panel from STA-allied organisation the AlphaMind podcast: Mark Randall, Steven Goldstein as well as Clive Lambert.

Topics covered included mindset optimisation tactics and techniques for traders, mental gymnastics to upgrade your trading performance, a deep dive into trading psychology and finally exploring a holistic approach to mindset focus and mental, emotional and behavioural challenges

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NEWS

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NEWS

Commodity Trading Week 2021 - Traders Live - 'MAN’ VS ‘MAN+MACHINE’

We also gathered some very interesting and relevant data and industry sentiment in the forms of our Commodity Trading Annual Survey and Energy Trading Annual Survey (to be released shortly). I highlight below some of the relevant findings and encourage readers to download the survey for many more pages of fascinating industry insights:

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NEWS

Human trader v an algorithm - who wins? (n = 29)

Does your company have an automated trading function? (n = 21)

55.2%

Human

42.9%

Yes

42.9%

Algorithm

42.9%

No

17.2%

Unsure

14.3%

Planning to develop one

Do you have a technical analysis function in your company?

Do you consider technical analysis as a major edge for your company?

(n = 16)

(n = 41)

50% 37.5% 12.5%

Yes

44.4%

Yes

No - won't have one

33.3%

No

22.2%

Unsure

No - but plan to develop one

Do you think Trading will be done by traditional traders in the future?

What do you think will be the biggest profile hires in the next 2 years?

(n = 99)

(n = 96)

56.6%

Yes

31.3%

No

12.1%

Unsure

56.3%

Data scientists

9.4%

Logistics / Supply chain

30.2%

Risk professionals

4.2%

Traders

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NEWS Are you considering acquiring technology solutions or advisory in any of the below areas? n = 1754 (traders / end users only) CTRM Systems

22%

Data analytics

18%

Commodity Management Systems

16%

Trade finance

16%

Commodity traceability

14%

Algo / Automative trading

13%

Shipping / Logistics

13%

Data management

12%

Financial risk modelling

12%

Freight / Vessel tracking

11%

Market Data Feeds

11%

Post trade management

10%

Business / management consulting

9%

Credit risk

7%

Robotic Process Automation (RPA)

6%

Trdea surveillance

6%

Technology consulting

5%

Insurance

5%

Legal services

4%

Technical Analysis skills give me an Edge in the energy markets

Should we fear our robot overlords?

Strongly agree.

26%

Agree.

37%

A bit.

32%

Not much.

5%

It's a disadvantage.

0%

A: Yes, all human traders will be redundant and working as HGV drivers by 2025!

14%

B: No, computers can never replace a competent human trader.

5%

C: No, humans and computers both have a place in the trading industry for the foreseeable future.

82%

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NEWS What does 2022 hold?

The year ahead will see a deepening and strengthening of our work with the STA, with a joint aim to further the interest and understanding of these skills worldwide, and across a greater range of traded commodities.

STA will host dedicated technical analysis sessions at a number of our in-person and online events including Commodity Trading Week (London, 26-27 April), Energy Trading Week (London, 28-29 September). STA members do come along!

Event Calendar Energy Online

Commodities In-person / Hydrid

Online

In-person / Hydrid

January February

Energy Trading Week North America Online

March

ETRC: Energy Trading Regulations & Compliance

April

LNG Trading and Risk

May

ESG & the path to NetZero

CTWO: Commodity Trading Week Online Commodity Trading Week 2022 ESG & the path to NetZero Commodity Trading Week: North America 2022

June July August September

Oil Trading & Markets

Energy Trading Week 2022

Oil Trading & Markets DigiCom: Commodities & Digitalisation Forum

October November December

ETD: Energy Trading Digitalisation

Energy Trading Week: North America 2022

CTF: Commodities Trade Finance ComRisk: Global Commodities Risk Management Forum

We will also be launching a joint Commodities People - STA online resource. This will host all of our relevant panels, presentations and content relevant to TA in energy/commodities, as well as details of upcoming engagements.

Trevor will be running a highly practical, and very interesting workshop at Commodity Trading Week. He will be exploring TA in commodity trading, following on from success of his recent offering at Energy Week in October.

Last but certainly not least, we’ve recent launched into North America with in-person events in Houston June and November centred around energy/commodity trading. If any STA members are based in in the America’s and interested to play a role, do let us know!

I’d like to thank again the whole team at the STA, and the members, for allowing us to be a part of this wonderful community, and I hope to see many of you at STA and our own events in 2022!

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RESEARCH

Invest in Egypt: The Technical Outlook

Mohamed Hassan Managing Director & CEO at Blom Egypt Investment

Introduction: ‘History Speaks’ The 2019 IFTA Cairo conference ‘History Speaks’ was a success at all levels. A series of fascinating topics was followed by a light and sound show by the impressive pyramids. Patricia Elbaz met Mohamed Hassan at the conference and we are delighted to share some of Mohamed’s research which follows ‘Invest in Egypt’ and looks at the technical outlook for a number of markets.

MSCI Emerging Markets Emerging markets moved sharply after the Covid-19 crisis, with the MSCI Emerging Markets index reaching a new high near 1,400 points in February 2021. It then corrected gradually towards the 1,200-point support level (see Figure 1).

Figure 1: MSCI Emerging Markets rise and correction Published on Investing.com, 21/Dec/2021 - 14:53:54 GMT, Powered by TradingView.

MSCI Emerging Markets, GlobalIndexes:MSCIEF, W

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RESEARCH The MACD indicator confirmed the price action especially after the breakout of the zero level. The 1,200-point level is seen as the trigger for further slippage ahead (see Figure 2).

Figure 2: The MACD indicator confirmed the price action Published on Investing.com, 21/Dec/2021 - 15:00:38 GMT, Powered by TradingView.

MSCI Emerging Markets, GlobalIndexes:MSCIEF, W MACD (12, 26. close, 9)

Brent Crude The long-term trend of the Brent Crude oil chart shows a downtrend from the 2009 peak. After the sharp fall in prices caused by the Covid-19 crisis, the price started to rebound, forming a double bottom with a higher low, confirming the uptrend in the medium term. Thus, the price reached the resistance level at USD84.50 before testing support at USD71 (see Figure 3).

Figure 3: A double bottom in Brent Crude oihfederalSeahors48161 published on TradingView.com, Dec 20, 2021 10:51 UTC Brent Oil, 1W, CURRENCYCOM 71.23 -1.55 (-2.13%) Vol 35.479K

The MACD indicator confirms the price action. The zero level acts as a support line but, if it breaks down, it will risk a move the USD60 zone. On the upside USD85 is the key resistance level (see Figure 4).

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RESEARCH Figure 4: Once again the MACD indicator confirms the price action oihfederalSeahors48161 published on TradingView.com, Dec 20, 2021 10:51 UTC MACD (12, 26, close, 9) -1.49 1.00 2.49

Some decline in oil prices due to Omicron is expected, which would lead to further declines in emerging markets given that their economies are highly dependent on petroleum, giving the Egyptian Stock Exchange a competitive advantage for investors to invest in Egypt.

TASI - Tadawul All Shares Index - KSA The Tadawul All Shares Index is moving in an uptrend, following the Covid-19 crisis in February 2020 and gaining further ground due to the new IPOs in Saudi Arabia and the increase of foreign investors. However, the level of 11,500 points is acting as a strong resistance and the market is expected to correct at these levels.

The market cycle was repeated three times in 2008, 2014 and 2021-2022, which means every six years. A correction is expected (see Figure 5).

Figure 5: The Tadawul All Shares Index – a correction is expected oihfederalSeahors48161 published on TradingView.com, Dec 23, 2021 10:40 UTC Tadawul All Shares Index, 1W, TADAWUL 11233.460 -78.430 (-0.69%) Vol: The data vendor does not provide volume data for this symbol.

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RESEARCH The MACD confirmed that the correction occurred at these levels during the periods of 2008, 2014 and 2021-2022. The new peak in the MACD could take us toward the zero level and may break as before (see Figure 6).

Figure 6: The new peak in the MACD could take us toward the zero level oihfederalSeahors48161 published on TradingView.com, Dec 23, 2021 10:42 UTC MACD (12, 26, close, 9) -127.688 183.952 311.640

ADX General - UAE Likewise, The ADX General shrinks in the crisis of Covid-19, then takes a sharp move up, recording a new high near 9,000 points before beginning to correct. The price action is still valid until any confirmed reversal occurs (see Figure 7).

Figure 7: Price action in the ADX General Published on Investing.com, 23/Dec/2021 - 11:51:22 GMT, Powered by TradingView.

ADX General, United Arab Emirates, AbuDhabi:ADI, W

The MACD is at high levels; however, it is forming a swing reversal pattern that may take the prices further to dips (see Figure 8).

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RESEARCH Figure 8: The MACD is forming a swing reversal pattern Published on Investing.com, 23/Dec/2021 - 11:54:07 GMT, Powered by TradingView.

ADX General, United Arab Emirates, AbuDhabi:ADI, W MACD (12, 26. close, 9)

In addition, the RSI is in the overbought area and starting to look toppish; it may take us further to dips and break out of the 70 level downwards (see Figure 9).

Figure 9: The RSI is in the overbought area and starting to look toppish Published on Investing.com, 21/Dec/2021 - 15:00:38 GMT, Powered by TradingView.

ADX General, United Arab Emirates, AbuDhabi:ADI, W RSI (14)

EGX30 - Egyptian Exchange Index The main index in Egypt, the Egyptian Stock Exchange EGX30, reached a record peak of 18,400 points in April 2018 after the devaluation of the Egyptian currency. It then began to weaken, with high volatility at the top, which means that the decline happened at the end of December 2018, at the upper boundary of the major uptrend channel near the 12,500-point level.

The EGX30 kept near this level until the Covid-19 crisis hit in March 2020. It then broke the upper boundary with a sharp move to reach near the lower boundary of the major uptrend channel near 8,000 points forming a confirmed downtrend channel. The index then moved in a sideway trend between support and resistance at 8,000 and 11,750 points.

Finally, the EGX30 Index rallied to reach the resistance level again at 11,750 points with higher lows and a higher high, coupled with high volume.

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RESEARCH Figure 10: Price action in the EGX30 oihfederalSeahors48161 published on TradingView.com, Dec 19, 2021 13:43 UTC EGX 30 Price Return Index, 1W, EGX 11565.700 -102.000 (-0.87%) Vol 109.692M

MACD indicator confirms the price action breaking the zero level upwards. This price is expected to breakout and head towards the next resistance level at 14,000 points (see Figure 10).

Figure 11: The MACD indicator confirms the price action breaking up through the zero level oihfederalSeahors48161 published on TradingView.com, Dec 19, 2021 13:44 UTC MACD (12, 26, close, 9) 46.565 223.641 177.076

In conclusion We must wait for a breakout of the resistance level in order to confirm the change of trend. We expect that the long- and mediumterm investors will start to look for buying opportunities once resistance has given way. This highlights the advantages in the Egyptian Stock Exchange. After the Covid-19 crisis, the Egyptian market has been able to hold firm with high volumes and the successful economic reform programmes from the Egyptian government.

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Heikin-Ashi Magic Introduction: ‘History Speaks’ Many of you who read my Ichimoku article issue 88 of The Market Technician, and attended the Ichimoku talks, requested a swing trading strategy and wanted to learn how to use Heikin-Ashi with Ichimoku. Your prayers get answered today. In this article, I’m going to share a super powerful swing trading strategy ‘Heikin-Ashi magic’ with you. This is a unique time-tested strategy using Ichimoku and HeikinAshi to make profits. This strategy can be used by investors in an uptrend or down trend.

Sankar Sharma MSTA MBA Sankar Sharma MSTA, MBA (Finance) is passionate about technical analysis, mentoring, speaking and trading.

He is the author of the book Stock Trading Made Simple and also Sankar is the founder of TradingExpertSummit.com.

Sankar mentors students in the trading and investment community from all over the world including UK, Europe and India, sharing his 33 plus years of market experience. He is the creator of the ‘3R Methodology’, a new systematic method and hexagon framework for trading success and building smart portfolios.

Sankar’s company riskrewardreturn. com helps individuals and institutions to spot opportunities and build generational wealth. Recently, Sankar has been featured in the Authority magazine.

This article assumes you have sufficient knowledge of Ichimoku, but I will be covering Heikin-Ashi basics. If you wish to avoid sitting near the computer all day long, but wish to generate additional income from trading, then this strategy is for you. For easy reference I will refer to the strategy outlined as the ‘Heikin-Ashi Magic’ Strategy or simply ‘HEMS’. ‘Heikin-Ashi Magic Strategy’ is rule based, non-ambiguous, simple and easy to follow.

This strategy has three ingredients: Ichimoku, Heikin-Ashi price chart and Commodity channel index indicator.

1: Heikin-Ashi basics Just like Ichimoku and Candlesticks, Heikin-Ashi originated in Japan. The word ‘Heikin’ means ‘average’ and ‘Ashi’ means ‘pace’. In other words, ‘Heikin-Ashi’ means ‘average pace’ or ‘smooth pace’. It’s important to note that Heikin-Ashi takes price gaps into account. If you wish to cut noise, Heikin-Ashi helps to achieve this.

2: Heikin-Ashi candles and candle structure To simplify, Heikin-Ashi (HA) lets you classify trends into three simple categories: neutral (pause or indecision), bullish (upside potential) and bearish (downside potential) (see Figure 1). If you notice the indecision candle (coloured yellow), you will see that it has wicks on either side with body in the middle.

Figure 1: The three types of Heikin-Ashi candles

Indecision Neutral

Upside Potential Bullish

Downside Potential Bearish

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RESEARCH The bullish Heikin-Ashi candle (coloured green) has a flat bottom and a wick on the top, implying upside potential. The bearish one, by contrast, has a flat top and a tail at the bottom (coloured red). The meaning of the wick, body and tail elements are shown in Figure 2.

Figure 2: The structure of the candles

Wick

Wick

Body

Body Body

Tail

Bullish Candle

Tail

Bearish Candle

Indecision Candle

3: Defining the trend using Heikin-Ashi For a bullish trend, look for a series of bullish HA candles (green candles with a flat base and wicks) making higher highs. For a bearish trend look for a series of bearish flat topped candles with tails making lower lows. If you spot indecision candles then this implies that the price is going sideways, or a trend is in pause mode with momentum slowing (see Figure 3). It is highly recommended for this swing strategy to observe three consecutive candles for the trend confirmation (bullish, bearish, or sideways).

Figure 3: Spotting trend continuation

3 1

2

2

3 1

Sideways

Bullish Trend

1 2 3 Bearish Trend

4: Entry and stop-loss rules for taking long or short positions using just Heikin-Ashi For taking a long position, look to enter above the high of the last three sideways candles or the high of three bullish HA (green) candles. The initial stop loss is below the low of the three candles (see Figure 4). Each candle in the illustration refers to a daily price move.

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RESEARCH Figure 4: Entry and stop loss for taking a long position using the daily price

Entry

1

2

3

Entry

Stop loss

Stop loss

2

3

1

For taking a short position, look to enter either below the low of the last three sideways candles or below the low of the last three bearish HA (red) candles. The initial stop loss is above the high of the three bearish red-coloured candles (see Figure 5). Each candle refers to a daily price move.

Figure 5: Entry and stop loss for taking a short position using the daily price

Stop loss

Stop loss

1 Entry

1

2

Entry

2

3

3

5: Setting up your ‘Heikin-Ashi Magic strategy’ chart template for the swing trading This section gives the rationale behind using a three-day chart. You need a confirmed entry after three days’ price action. Then, for the actual implementation of the strategy, switch to a three-day price chart.

• Step 1: Open a default price chart with volume on your charting platform (the charts used in this article are courtesy of

Tradingview).

• Step 2: Change the period to ‘3-Day’ so that each bar on the chart represents the three-day price.

• Step 3: Change the price bars to ‘Heikin-Ashi’ candles.

• Step 4: Add Ichimoku (default values) to the chart and switch off the base line, conversion line and delayed line, leaving

just the bullish (cyan colour) and bearish (pink colour) clouds. For the clouds, you can also use green and red

respectively instead of cyan and pink to represent bullish and bearish clouds.

• Step 5: Add an indicator, ‘Commodity channel index or CCI’ with default values. Get rid of high and low levels and

just keep the middle line (marked with a red dotted line in Figure 6).

If everything is setup as per the above steps, your chart template will look like the one in Figure 6. Once this is done, it is time to focus on the main piece of the puzzle, namely the the ‘Heikin-Ashi Magic’ strategy. (Note: All the contents of this article are for educational purposes only and are not a recommendation to buy or sell.)

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RESEARCH Figure 6: Chart template setup to implement Heikin-Ashi Magic strategy

6: Heikin-Ashi Magic strategy implementation A good strategy should have clearly defined and easily implementable rules with the least scope for any ambiguity. Let us define the rules for implementation.

6.1: Rules Rules mentioned below are for conservative entry and exits. Do not forget to use a three-day chart.

6.1.1: Rules for entering and exiting a long position a) Buy rules for taking a long position: • After a recent down trend, look for the first bullish Heikin- Ashi green candle, with a flat bottom.

Good volume is a bonus; • The price bar should be above the Ichimoku cloud; and • The CCI indicator should have crossed up above the zero level from below. b) Sell rules for exiting the long position: • The CCI indicator should have crossed below the zero level from above.

6.1.2 Rules for entering and exiting a short position: a) Rules for entering a short position: • After a recent up trend, look for a first bearish Heikin-Ashi red candle, with a flat top.

Good volume is preferred; • The price bar should be below the Ichimoku cloud; and • The CCI indicator should have crossed down below the zero level from the top. b) Rules for exiting the short position: • The CCI indicator should have crossed up the zero level from below.

6.2: Rules Application and Results Let us take the rules defined in 6.1 and apply them to different markets to validate and check the results of trading long and short.

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CASE CASE STUDY STUDY 31

Figure 7 shows the case for Nvidia stocks (NVDA). We can note that all three rules were met for the entry: a bullish HA candle, good volume and the price above the cloud and CCI (marked by the black curve at the bottom) gave a buy signal on 15 October 2021.

This is marked by a green up arrow on the price chart and a green vertical line on the CCI indicator in the bottom window. Note the exit sign on 20 December 2021. This is marked by the red down arrow and the dotted vertical line with the date.

Figure 7: NVIDIA Heikin-Ashi strategy

NVIDIA (long)

1

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RESEARCH

CASE CASE STUDY STUDY 32

Here is an example of Tesla (TSLA) entries and exits in 2021. The entry date was 17 November 2021; see Figure 8, where this is marked by the green vertical dotted line - a great buy signal. All the three conditions were met: the CCI crossed up above the zero mid-line, you can see a bullish HeikinAshi candle (with good volume) and the price was above the Ichimoku cloud.

On 17 Feb 2021, the exit signal triggered when the CCI went below zero from the top (marked by red vertical dotted line).

It turned out to be a beautiful swing trade, with a 75% return over the period of 93 days.

Figure 8: Tesla entries and exits

TESLA (long)

2

23

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RESEARCH

CASE CASE STUDY STUDY 33

APPLE (long - trade in progress based on the strategy)

writing this article, it is giving them a 712% profit on this position (Figure 10).

We got stops in place not to give back the gains.

Here is an example where students took the trade in October as per this strategy (see Figure 9). As of now, at the time of

This is to show you the power of this strategy and help to build you confidence in using it. Hopefully this

3

case study is successful in proving this point. Do not forget this is a swing trading strategy. Options are leveraged and it’s not suitable for everyone. But the results of this third case study demonstrate the power of the HA Magic strategy.

Figure 9: Apple trade in progress based on the HA Magic strategy

Figure 10 shows the LIVE results of applying the HA Magic strategy to a long position in Apple. As a result of this strategy, Apple gave a 712.5% return on a USD780 investment, taking the total gain to USD5587.50 using options. (Note: leveraged instruments are not suitable for everyone). Even if the strategy was applied to Apple stocks without the options, results still would have been in double digit gains.

Figure 10: Result so far of the Apple trade in progress

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RESEARCH

CASE CASE STUDY STUDY 34

In this example, notice the results when this strategy is applied to a short position in Peloton (PTON; see Figure 11). Here is a situation where the CCI gave a signal to enter the short a lot earlier (denoted by the black dotted line). But also note that all the three rules were met only on 12 August 2021 (denoted by the red dotted line).

Discipline is necessary to hold out and enter the trade only after all three conditions are met as this will allow us to enter a higher probability trade. The stock is still down, and entry was around USD110 price. At the time of writing this article, the stock is at USD33.82, and the trade is still in progress.

Figure 11: Peloton short trade in progress

PELOTON (short)

4

25

26

RESEARCH

CASE CASE STUDY STUDY 35

Here is the strategy in action in Bitcoin.

The entry buy signal came on 9 October 2020 while price was around 10.6K, and the exit signal came on 19th April 2021 when price hit 55.6 K (see Figure 12).

That is a massive five-fold increase.

You can see that the HA-Magic strategy works on crypto too.

Figure 12: Bitcoin trade

BITCOIN (long)

5

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RESEARCH

CASE CASE STUDY STUDY 36

Let’s apply the HA Magic strategy to the forex market. Here is the strategy in action in the EURUSD currency pair.

Note that the short trade was triggered on 20 Sep 2021. At the time of writing this article, it is pausing and moving sideways (denoted by the coloured rectangle in Figure 13). The CCI is right at the zero line but not crossed and looks like awaiting news...

Figure 13: EURUSD trade

EURUSD

6

27

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RESEARCH 6.3: Rules Always start with an initial stop and move the stop to break even when the trade moves in the right direction. If the initial stop is too far away, then reduce the position size to keep risk in check. Always remember the rule that no strategy is fool proof so always start with a stop.

6.4: Profit Maximisation This strategy gives awesome results, as demonstrated in the Apple case study. However, the profits can be further improved by exiting once the target is met rather than waiting for the CCI crossover in the opposite direction. You could work out the targets by using any of the 12 target-setting methods including Fibonacci. By exiting early, you may be able to squeeze in a few more dollars or pounds from the trade.

However, beginners should use the CCI rules for entry and exits rather than worrying about how to find the targets.

7: Conclusion Over the years, this strategy has become one of the preferred and go-to strategies for swing trading. It’s easy, it is simple, anyone can use it and it works on all asset classes; it can be applied to stocks, currency, crypto or any market of your choice. It’s also rule based, low maintenance (you can check positions couple of times a week). This strategy is optimised for swing trading and must use three day price charts.

If you have any feedback or topic requests for future articles or talks, you can reach out to me by email at ssharma.sankar@gmail.com

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RESEARCH

The 9/56 Year Cycle and DJIA Bear Markets Introduction

David McMinn David McMinn completed a Bachelor of Science degree at 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.

The 9/56 year cycle consists of a grid with intervals of 56 years on the vertical (called sequences) and multiples of nine years on the horizontal (called subcycles). Major US and Western European financial crises have clustered with high significance in this cycle over recent centuries (McMinn, 1986, 1993, 2021). The big question arises: is the 9/56 year grid also applicable to the highs and lows in stock market activity or does it only apply to the crisis phase of the financial cycle? This needs to be determined by assessing trends in the Dow Jones Industrial Average (DJIA) over the past 130 years.

The start and finish of DJIA bear markets were sourced from Bespoke Investment Group (2008) and TheDowTheory.com for the 1900 to 2021 era (see Appendix 1). The pre-1896 highs and lows were based on the 14 Stock Average and the

12 Stock Average indexes and have also been included in the assessment.

The early 1930s market decline was taken as occurring from 3 September 1929 to 8 July, 1932, even though several bear markets took place in this period. This was to avoid distortions arising from the extreme gyrations in DJIA stock prices during a short period of less than three years. The numbering of the 56-year sequences was based on McMinn (1993), with 1817, 1877, 1929, 1985 denoted as Sequence 01, 1818, 1878, 1930, 1986 as Sequence 02 and so forth. McMinn (2021) presented the full numbering. The DJIA data was based on closing values throughout the text.

The year of best fit was adopted in the various tables and a Chi Square test was applied where appropriate in the text.

Beginning of DJIA Bear Markets Table 1 shows just 29% of the complete

Table 1: DJIA peaks and the 9/56 year grid 1886 - 2021

Year ending 10 November Sq 11

Sq 20

Sq 29

Sq 38

Sq 47

Sq 56

Sq 09

Sq 18 1890 17 May

1892 7 Mar

1901 17 Jun

1910 1909 19 Nov

1919 3 Nov

1928

1937 10 Mar

1946 29 May

1939 12 Sep 1938 12 Nov

1948

1957

1966 9 Feb

1975

1984

1993

2002 19 Mar

1995

2004

2003

2022

Sq 27

Sq 36

Sq 45

Sq 54

Sq 07

Sq 16

Sq 25

Sq 34

1888

1897 10 Sep

1906 19 Jan

1899 5 Sep

1908

1917 1916 21 Dec

1926

1935

1944

1953

1962 1961 13 Dec

1955

1964

1973 11 Jan

1982

1991

2000 4 Jan

2009 2 Jan

2018 3 Oct

2011

2020 13 Feb

30

RESEARCH 9/56 year cycle, yet this portion includes 54% of all DJIA peaks at the beginning of a bear market (significant p < .001).

Table 2 consists of a grid repeating 9-9-27 years on the horizontal and 56 years on the vertical (denoted as a 9-9-27/56 year cycle).

It represented 32% of the complete 9/56 year grid, but it only accounted for a mere 5% of all bear market lows (significant p < .001).

The finding was quite remarkable and unexpected.

Table 2: Low frequency of DJIA peaks and the 9-9-27/56 year grid

Year ending 10 November Sq 21

Sq 30

Sq 01

Sq 10

Sq 19

Sq 46

1891

+ 27

1918

+9

1893

+9

1902

+ 27

1929 0903

+9

1938

+9

1947

+ 27

1974

+9

1949

+9

1958

+ 27

1985

+9

1994

+9

2003

2005

+9

2014

Sq 55

Sq 08

Sq 35

Sq 24 1896

+9

+9

1916

+9

1925

+ 27

1952

+9

+9

1972

+9

1981 0427

+ 27

2008

+9

+9

1936

+ 27

1963

1983

+9

1992

+ 27

2019

Sq 42

Sq 53

1907 1927

Sq 33

Sq 44

Sq 13

Sq 22

Sq 31

Sq 02

1894

+9

1903

+ 27

1930

+ 27

1986

1905

+9

1914

+ 27

1941

+9

1950

+9

1959

1961

+9

1970

+ 27

1997

+9

2006

+9

2015

2017

8-9-10 Year Cycle and DJIA Highs A cycle repeating 8-9-10 years for 19th Century US pig iron price highs was established by Benner (1875), while A.J. Frost observed the similar trend occurring in the timing of DJIA highs during the 20th Century (Prechter & Frost, 1978). Expanding on these concepts, the DJIA highs were plotted on a grid repeating 8-9-10 years on the horizontal and 56 years on the vertical (denoted as an 8-9-10/56 year cycle). The layout in Table 3 accommodated 16 of the 39 peaks since 1886 (significant p < .01). Other possible 8-9-10 year patterns were considered but no significance was achieved, despite much research.

Table 3: DJIA highs and the 8-9-10/56 year grid

Year ending 5 November Sq 03

Sq 11

Sq 20

Sq 30

Sq 38

Sq 47

1892 0307

+ 10

1902

+8

1910 1909 1119

+9

1919 1103

+ 10

+9

1975

+ 10

1931

+8

1939 0912 1938 1112

+9

1948

+ 10

1958

+8

1966 0209

1987 0825

+8

1995

+9

2004

+ 10

2014

+8

2022

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RESEARCH

Year ending 5 November Sq 01

Sq 09

Sq 18

Sq 28

Sq 36

1890 0517

+ 10

1900

+8

1908

+9

1917 1916 1121

+9

1973 0111

Sq 52

Sq 05

1929 0903

+8

1937 0310

+9

1946 0529

+ 10

1956 0406

+8

1964

1985

+8

1993

+9

2002 0319

+ 10

2012

+8

2020 0213

Ending of DJIA Bear Markets

Sq 45

Table 4: DJIA bear market lows and the 9/56 year grid

DJIA bear market lows also clustered within the 9/56 year grid. Of the total 39 lows since 1886, 12 appeared in the grid shown in Table 4 compared with about six that could have been expected (significant p < .01).

DJIA lows were very unlikely to fall in a grid repeating nine-27 years on the horizontal and 56 years on the vertical (see Table 5). Only four lows appeared in this pattern to 2021 (significant p < .001).

Year ending 30 June Sq 07

Sq 16

Sq 25

Sq 34

Sq 43

Sq 14 1886

1888 2 Apr

1897 1896 8 Aug

1906

1915 1914 2 Nov

1924 1923 27 Oct

1933 27 Feb 1932 8 Jul

1942 28 Apr

1935 1934 26 Jul

1944

1953

1962 26 Jun

1971

1980

1989

1998

1991 1990 11 Oct

2000

2009 9 Mar 2008 20 Nov

2018

2017

Table 5: Low frequency of DJIA troughs and the 9-27/56 year grid

Year ending 30 June Sq 48

Sq 01

Sq 28

Sq 37

Sq 08

Sq 17 1889

+ 27 + 27

1900

+9

1909

+ 27

1936

+9

1945

1920

+9

1929

+ 27

1956

+9

1965

+ 27

1992

+9

2001 0322

1976

+9

1985

+ 27

2012

+9

2021

Sq 44

Sq 53

Sq 24

Sq 33 +9

1905

+ 27

1932

+9

1941

+ 27

+ 27

1988 1987 1019

+9

1997

+ 27

+9

1925

+ 27

1952

+9

1961

1972

+9

1981

+ 27

2008

+9

2017

Sq 49

Sq 13

1896 1916

Sq 40

Sq 04

Sq 20 1892

Sq 29 +9

1901 1900 0924

Sq 56 + 27

1928

Sq 09 +9

1937

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RESEARCH

1912 1911 0925

+9

1921

+ 27

1948

+9

1957

1968

+9

1977

+ 27

2004

+9

2013

+ 27

1984

+9

1993

2024

11-10-7 Year Cycle and DJIA Lows McMinn (2006) established a cycle of DJIA lows repeating every 11-10-7 years. It was a close variation of the 11-9-7 year cycle proposed by Benner (1875) for 19th Century US pig iron price lows. A grid repeating 11-10-7 years on the horizontal and multiples of 56 years on the vertical was presented in Table 6. In the 80 years to 1970, the DJIA lows aligned exceptionally well within the table. It was less accurate between 1971 and 2000 with two anomalies: • •

1977 (the bear market low occurred four months late on 28 Feb 1978) 1987 (the S&P 500 bear market low on 4 Dec 1987 fell within the table).

The trend did not persist beyond 2000, as 2005 and 2016 were uneventful.

Curiously, the 11-10-7 year cycle repeated every 28 years or half the interval of 56 years on the verticals. Other cycles discussed in this paper were all based on 56 years, as well as nine years and its regular deviations.

Table 6: 11-10-7/56 year grid and DJIA lows

Year ending 5 November Sq 21

Sq 32

Sq 42

Sq 49

Sq 04

Sq 14 1886

1893 0726

+ 11

1904 1903 1109

+ 10

1914 1102

+7

1921 0824

+ 11

1932 0708

+ 10

1942 0428

1949 0613

+ 11

1960* 1025

+ 10

1970 0526

+7

1977

+ 11

1988 1987# 1203

+ 10

1998 0831

2005

+ 11

2016

+ 10

2026

* Low of a -17% correction. # The actual DJIA low took place on the day of the panic (19 Oct). The DJIA low after the panic happened on 3 Dec, while the bear market low for the S&P 500 occurred on 4 Dec.

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RESEARCH 19th Century US Bear Markets A listing of 19th Century bear markets in US stock prices was presented by Gonzalez et al. (2006). These highs and lows did not cluster preferentially in the 9/56 year grid. However, high significance could still be achieved via an 18/56 year pattern, which has been plotted in Table 7. This grid accounted for 25% of the complete 9/56 year cycle, yet some 47% of all highs and lows for 19th Century bear markets appeared in the layout (significant p < .001).

Table 7: 19th Century US bear markets and the 18/56 year grid

1800 - 1900* Year ending 1 May Sq 07

Sq 25

1823

1841 1842 Mar

1879 1880 Mar

1897 Aug 1898 Apr

Sq 21

Sq 39

1837 Jun 1837 Nov 1838 Apr

Sq 43

Sq 05

Sq 23

1803

1821 1822 Mar

1839 Nov

1859 Jul

1877 Jun

1895 Aug

Sq 01

Sq 19

Sq 37

1799 1800 Jan

1817

1835 May

1855 Jul 1855 Nov 1856 Apr

1873 Nov 1874 Feb

1891 Jul 1892 Feb

1853 Nov 1854 Mar

Sq 41

Sq 03

1801 Dec

1819 Jul

1857 Oct 1858 Mar

1875

Sq 55

Sq 17

1815

1833 Oct 1834 Feb

1871 1872 Apr

1899 Sep

1893 Jul 1893 Nov Dates of bear market peaks have been highlighted in RED and the troughs have been highlighted in BLUE. * Table presents the beginnings and endings of historic US bear markets.

Source of Raw Data: Gonzalez et al. (2006).

Discussion and Conclusions The DJIA highs at the beginning of a bear market cluster with significance in the 9/56 year cycle (see Table 1), as do the corresponding lows (see Table 4). The highs were least likely to fall in a 9-9-27/56 year grid (see Table 2) and the corresponding lows in a 9-27/56 year grid (see Table 5). Overall, the findings supported the hypothesis that the timing of DJIA bear market peaks and troughs was linked to the 9/56 year grid in some manner.

Strangely, the year of best fit for the DJIA highs was the year ended in early November (see Tables 1 and 2), whereas it was the

34

RESEARCH year ended 30 June for DJIA lows in Tables 4 and 5. The discrepancy was inexplicable. One would have presumed that the year of best fit would be the same for both sets of data, but this was not observed.

The timing of US bear markets can be closely linked to lunar phase for both the DJIA peaks (McMinn, 2015) and DJIA lows (McMinn, 2019). Additionally, several Moon Sun cycles align very closely at 9.0 and 56.0 solar years based on lunisolar cycles in integral and half integral numbers (McMinn, 2021). Thus, any events clustering in a 9/56 year grid will have the lunar ascending node (LAN) sited in two segments approximately 180 degrees opposite on the ecliptic (1st and 2nd harmonics) with no exceptions. For events falling in the same 56 year sequence, LAN will be sited in a narrow sector of the ecliptic (1st harmonic) with no exceptions.

For events occurring at around the same time of year, the mean position of Apogee will be sited in three ecliptic segments 120 degrees apart (3rd harmonic) with no exceptions. There is also a near perfect 6th harmonic between the ecliptic position of the Sun and the angle between the LAN and Apogee (McMinn, 2016). How weak lunisolar tidal harmonics actually functioned in relation to stock market activity and the 9/56 year cycle remained unknown.

NB: The lunar nodes are sited in the heavens where the plane of the Earth's orbit around the Sun (the ecliptic) is intersected by the plane of the Moon's orbit around the Earth. Where the Moon crosses the ecliptic from south to north gives the lunar ascending node and from north to south gives the lunar descending node. Apogee is sited in the lunar orbit, where the Moon is the greatest distance from the Earth. The lunar nodes and apogee are key determinants of terrestrial tides.

Natural phenomena also occurred preferentially in grid patterns based on 56 years on the vertical and multiples of nine years on the horizontal. For example: • • •

World mega quakes clustered in a 9-45/56 year grid (McMinn, 2011).

World mega volcanic eruptions happened in a 9-27/56 year grid. (McMinn, 2012).

Alaskan eruptions occurred selectively in a 9-18/56 year grid, while the beginning of Hawaiian volcanic eruptions took place in a 9-27/56 year grid (McMinn, 2014).

The DJIA highs and lows fall preferentially within grids based on the 9/56 year cycle and its variations. Although statistically significant, these patterns did not improve the accuracy of financial forecasting to any great extent. Even so, the findings do offer insights for the design of much needed follow up research.

References Benner, S. (1875). Benner's Prophecies of Future Ups & Downs in Prices. Robert Clark Co. Available at: https://stockmarketobservations.files. wordpress.com/2013/02/benners-prophecies-of-future-ups-and-downs-in-prices-by-samuel-benner.pdf Bespoke Investment Group (2008). Historical Bull and Bear Markets for the Dow: 1900 - Present. Available at: http://bespokeinvest.typepad. com/bespoke/2008/10/historical-bull.html Durden, T. (2014). When Global Stock Markets Closed. Available at: https://www.zerohedge.com/news/2014-08-01/august-1914-when-globalstock-markets-closed Gonzalez, L. et al. (2006). Defining and Dating Bull and Bear Markets: Two Centuries of Evidence, Multinational Finance Journal 10(1/2) 81–116.

McMinn, D. (1986). The 56 Year Cycles & Financial Crises, 15th Conference of Economists. The Economics Society of Australia. Monash University, Melbourne.

McMinn, D. (1993). Financial Crises & The Number 56, The Australian Technical Analysts Association Newsletter 21-25. September.

McMinn, D. (2006). Market Timing by The Moon & The Sun. Twin Palms Publishing.

McMinn, D. (2011). 9/56 Year Cycle: Record Earthquakes, New Concepts in Global Tectonics Newsletter 59 88-104.

McMinn, D. (2012) 9/56 Year Cycle: World Mega Volcanic Eruptions, New Concepts in Global Tectonics Newsletter 64 7-18.

McMinn, D. (2014). 9/56Year Cycle: Alaskan Volcanic Eruptions, New Concepts in Global Tectonics Journal (2)4 62-68.

McMinn, D. (2015). DJIA Peaks, Seasonality and Lunar Phase, New Concepts in Global Tectonics Journal (1)2 15-22.

McMinn, D. (2016). 9/56 Year Cycle: Lunar North Node - Apogee Angles, New Concepts in Global Tectonics Journal 4(1) 32-36.

McMinn, D. (2019). DJIA Bear Market Lows & Lunar Phase, Market Technician, Journal of The Society of Technical Analysts 86 27-33.

McMinn, D. (2021). 9/56 Year Cycle & Financial Panics, Cycles Magazine 50 (4) 31-51.

Prechter, R. & A.J. Frost (1978). Elliott Wave Principle: Key to Stock Market Profits. New Classics Library.

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RESEARCH Appendix 1: DJIA bear markets 1886-2020 Bespoke Investment Group (a) Highs 3 Dec 1886* 17 May 1890* 4 Mar 1892* 4 Sep 1895* 10 Sep 1897* 5 Sep 1899* 17 Jun 1901 19 Jan 1906 19 Nov 1909 30 Sep 1912 21 Nov 1916 3 Nov 1919 20 Mar 1923# 3 Sep 1929 7 Nov 1932 18 Jul 1933 5 Feb 1934 10 Mar 1937 12 Nov 1938 12 Sep 1939 7 Nov 1940 29 May 1946 6 Apr 1956# 13 Dec 1961 9 Feb 1966 3 Dec 1968 11 Jan 1973 21 Sep 1976 27 Apr 1981 25 Aug 1987 16 Jul 1990 17 Jul 1998# 14 Jan 2000# 21 May 2001 19 Mar 2002 9 Oct 2007 2 Jan 2009 3 Oct 2018# 12 Feb 2020

Lows 2 Apr 1888* 8 Dec 1890* 26 Jul 1893* 8 Aug 1896* 25 Mar 1898* 24 Sep 1900 9 Nov 1903 15 Nov 1907 25 Sep 1911 2 Nov 1914*(c) 19 Dec 1917 24 Aug 1921 27 Oct 1923# 8 Jul 1932 27 Feb 1933 19 Oct 1933 26 Jul 1934 31 Mar 1938 11 Apr 1939 10 Jun 1940 28 Apr 1942 13 Jun 1949 22 Oct 1957# 26 Jun 1962 7 Oct 1966 26 May 1970 6 Dec 1974 28 Feb 1978 12 Aug 1982 19 Oct 1987 11 Oct 1990 31 Aug 1998# 22 Mar 2001# 21 Sep 2001 9 Oct 2002 20 Nov 2008 9 Mar 2009 24 Dec 2018# 23 Mar 2020

Decline -20.1 -22.6 -34.6 (b) -24.8 -31.8 -46.1 -48.5 -27.4 -48.0 -40.3 -46.6 -18.6 -89.1 -37.3 -22.4 -22.8 -49.1 -21.7 -28.3 -32.5 -24.0 -19.4 -27.1 -25.2 -35.9 -45.1 -26.9 -24.1 -36.1 -21.2 -19.9 -19.9 -27.4 -31.5 -46.7 -27.5 -18.6 -38.1

1929-32 Era for the DJIA 3 Sep 1929 17 Apr 1930 24 Feb 1931 27 Jul 1931 9 Nov 1931 8 Mar 1932

Nov 1919 Dec 1930 Jun 1931 Oct 1931 Jan 1932 Jul 1932

-47.9 -46.4 -37.4 -44.3 -39.1 -53.6

A bear market was defined as a DJIA decline of over -20% that was preceded by a rise of over +20%. * Inserted by the author. # Five DJIA corrections were included, as they recorded declines from -18.5% to -19.9% and thus almost qualified as bear markets. (a) The 1886 - August 1896 data was based on the 12 Stock Average index. (b) A percentage decline could not be calculated, as the 1895 high was based on the 12 Stock Average and the 1896 low on the DJIA. (c) Due to the outbreak of WWI, the NYSE was closed from 31 July to 12 December 1914, although stocks were still quoted by brokers and traded off the exchange. According to Durden (2014), Global Financial Data calculated the average of the bid and ask prices from 24 August to 12 December and found that the 1914 bottom occurred on 2 November when the DJIA hit 49.07. This has been adopted as the 1914 low.

Sources: Bespoke Investment Group (2008). TheDowTheory.com.

36

RESEARCH

Our Cross Asset Analysis Suggests a Sell in May and Go Away A review of the S&P500 Index using Management Joint Trust’s methodology and newly developed automated approach.

Executive Summary:

Jean-Francois Owczarczak CFTe, MSTA, FRM and CEO of Management Joint Trust SA Jean-François Owczarczak is the CEO of Management Joint Trust SA (MJT), a Geneva based market consultancy firm founded in 1969, which has been publishing on-line charts since the mid 1980s using its envelopes and oscillators methodology (www.mjtsa.com).

•

Considering our methodology over our bi-monthly, weekly and daily frequencies, our manual analysis suggests that the S&P500 could retest up into April, perhaps May and may reach marginal new highs. It then retraces back below current levels into the Fall in first instance. On our bi-monthly charts, this top appears quite secular and could weigh on equity markets into 2023.

•

Our automated price projections do confirm this scenario, or at least a retest up into April for the S&P500 Index. The cross asset environment we expect using our automated projections on other Key Market Drivers, suggests a possible Growth recovery from March into late April / early May. During this period, Growth may lead US markets in an attempt to retest their highs. Thereafter, from May, inflationary/stagflationary pressures should make a come back leading the S&P500 to top-out again and correct down into the Fall in first instance.

S&P500 Index Weekly chart or the perspective over the next 2 to 4 quarters

Jean-François has 19 years experience in institutional cross asset advisory, holds the CFTe (for which he received the Bronwen Wood Award for the best CFTe II exam paper in the world in 2012) and the FRM Financial Risk Manager certification. MJT’s products were nominated 13 times over the last 7 years in the Technical Analyst Awards and its cross asset research product The Capital Observer won the Best Specialist research category in 2018.

Please don’t hesitate to contact Jean-François on support@mjt.ch or through his LinkedIn or Twitter accounts.

Copyright © 1985 - Management Joint Trust SA - www.mjtsa.com

MJT has been editing on-line charts since 1985. These range from long term bimonthly charts to Weekly, Daily, Hourly and intra hour frequencies. They cover circa 5’000 instruments worldwide across all asset classes as well as any relative studies or basket portfolios you may want to analyze. For an initial introduction to our

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37

RESEARCH methodology, please revert to our article presented in this same publication in the June 2011 edition titled , “3T methodology.") (page 1 to 5 of that issue).

As a short introduction, our approach can be summarized into 3 main focus points: •

Monitoring trends: using a combination of standard deviation envelopes: these are centered, and re-calculated dynamically on the last point of each chart (i.e. these are not historical envelopes such as Bollinger bands). The formula uses a centered moving average, extrapolates its last portion using a seasoned formula, and then calculates the standard deviation around it over the whole history of prices in the chart. The wider envelope (the yellow one) uses a longer term moving average as the basis for its calculation, the thinner white one a shorter term moving average. The system aims to identify trend direction and exaggerations in these trends at the point in time of the analysis. Trend direction is usually considered as the direction of the wider envelope over circa a 1/3 of the chart. Exaggerations in this trend are then identified when both envelopes touch each other.

In this example on the current Weekly graph of the S&P500, the yellow envelope is still heading up (i.e. in an uptrend), while both envelopes recently were touching each other to the upside (this uptrend is getting stretched compared to recent history).

•

Price Targets calculation: these are based off historic volatility. The formula uses the width of the larger yellow envelope as a starting point (a measure of historical amplitude/volatility). It is named Delta (here at 1’306 in the Weekly graph above – middle rectangle, right-hand side). The approach calculates Corrective and Impulsive target ranges by factoring Delta by either Corrective or Impulsive Factors and adding/subtracting the product to important turning points. The Corrective Factor which is used in 0.5 to 0.8 times “Delta” added to a bottom or subtracted from a top. Once this Corrective range has been broken through, we then calculate an Impulsive target range using a Factor range of 1.3 to 1.7 times “Delta”. For very extended moves, an Impulsive 2 target range can be calculated (perhaps 10% of cases). It then uses a Factor range of 2.3 to 2.7 times “Delta”.

Price moves beyond this Impulsive 2 target range are extremely rare. The main purposes of this price target system is to define prospective price target ranges as well as to assess if a price move is still Corrective (below 0.8 times “Delta”), or if it has turned Impulsive (and then has a stronger chance of reaching up/down to the 1.3 to 1.7 times “Delta” range), or if it is getting really extended as it nears the Impulsive 2 range (2.3 to 2.7 times “Delta”).

In the example above, the Weekly graph of the S&P500 has fulfilled its Impulsive targets to the upside (right-hand scale). The uptrend is hence quite exhausted in terms of risk/reward. Corrective targets to the downside over the next 6 to 12 months calculate in the 4’180 – 3’690 range.

•

Timing Oscillators: MJT uses timing oscillators to understand at what stage we currently stand in a trend (e.g. at an important turning point?, in an early stage uptrend?, reaching an intermediate top?, ready to resume a previous trend following some consolidation?, …).

Figure 1: Timing Oscillators

Timing Oscillators: different price cycles are captured by our 3 Timing oscillators. Monitor how their relative positioning defines specific situations (Cases), which will help you position yourself in the Trend (e.g. "Intermediate Top", "Resume Uptrend", "Low Risk", ...)

Shorter term Medium term Longer term

Copyright © 1985 - Management Joint Trust SA - www.mjtsa.com

The system uses a combination of 3 oscillators (a long term black one, a medium term red one and a shorter term blue one) to identify positions when all three oscillators bottom or top at the same time, marking important lows or tops and possible trend reversal (far left and far right situations in Figure 1). It also aims to understand how the trend develops between these important reversal points. Each one of our Timing oscillators has a specific timing parametering (i.e. a specific cyclicity), which implies that once you understand in which position you stand in either an uptrend or downtrend sequence, you can then project when the next timing point is likely to happen using a time unit of X (see model). X theoretically has a set value for each frequency +/- 10% (e.g. Weekly, Daily, …) and is usually standard for all instruments on the platform for that frequency. Note: each graph presents 2 series of 3 oscillators (lower and upper

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RESEARCH rectangles). The oscillator calculations on our Long Term oscillators (lower rectangle) are more momentum driven and twice as long as the ones used for our medium term oscillators (upper rectangles), which in turn also have more of a stochastic element to them. When analyzing a graph, the approach aims to find the best fit of each oscillator configuration to an idealized model (Figure 2) and then to coordinate the resulting sequences between our Long term (lower rectangle) and Medium term (upper rectangle) oscillator series into prospective timing scenario.

Figure 2: Timing Models: MJT's Timing oscillators allow investors to position themselves along the trend (uptrend or downtrend). Indeed, their relative position defines specific cases (Low Risk, Immediate Top, Fast velocity up, High Risk), so that when you know where you are, you can anticipate the probable future sequence of events. Trend Direction and Price targets are factored into algorithms to favour either on uptrend or a downtrend sequence.

Uptrend Model

Downtrend Model

Copyright © 1985 - Management Joint Trust SA - www.mjtsa.com

In practice, our platform allows users to manually Overlay these idealized models onto the oscillator series, thereby offering a visual output of which models (or half models) best fit the current oscillator configuration.

In the example above on the Weekly S&P500 graph, both oscillator series (lower and upper rectangles) are still following uptrend sequences. Yet, our medium term ones has now entered a High Risk position with a top expected between January and early Q2 (upper rectangle), while an important top is also expected on our long term ones at the end of the quarter. Hence, any attempt to retest up would lapse by late Q1 / early Q2.

Summary: Considering our Weekly graph above, the uptrend seems quite stretched in terms of our envelopes (they are touching each other), upside potential is also quite exhausted, while from a timing perspective, any attempt to retest up probably dies out from late Q1 / early Q2.

MJT’s analysis always aims to coordinate such analysis over several time frames. Hence, below, we also consider the S&P500 Index on a bi-monthly graph (scoping-out in term of timing) and on a Daily one (scoping-in in terms of timing).

Management Joint Trust SA (MJT) has been providing market advisory and research services since 1969. Its approach is based on Trend and Cycle analysis which is available on global markets from long term to intraday. Clients include Investment Committees, Advisory desk, Family Offices, Traders and Asset Managers.

www.technicalanalysts.com

39

RESEARCH S&P500 Index Bi-monthly chart or the perspective over the next 1 to 2 years

S&P500 Index Daily graph or the perspective over the next 2 to 3 months

This long term bi-monthly graph of the S&P500 presents a very extended picture. After 13 years of uptrend, our envelopes are still uptrending, yet touching each other to the upside, a sign of stress. Targets-wise, prices have moved beyond our Impulsive targets to the upside and entered our extended Impulsive 2 target range. The remaining upside potential is hence limited although a last move up to test towards 5’000 cannot be excluded (right-hand scale). On the Timing front, our long term black oscillators on both oscillator series (lower and upper rectangles) have entered Overbought positions, and both sequences are calling for a major top. Perhaps is it already done, if not at some point during H1 2022.

Such situations would usually result in 1 to 2 years of consolidation to the downside at least (or flat), as was for example the case (yet theoretically then with less consequences) for the intermediate top which was identified in late 2017 / early 2018.

While our long term oscillators (lower rectangle) could still see a resume uptrend situation, which may extend into April/May, our medium term ones (upper rectangle) may now be positioned in a downtrend. We are currently working around crucial support (around the lower end of our C Corrective targets to the downside – right-hand scale). Such levels (around 4’300) really need to hold if a full upside retest is to be envisaged. If not, we would probably get a break down now and a mere rebound into early April (upper rectangle).

Concluding remarks for our manual analysis on the S&P500 Index: When considering our Bi-monthly, Weekly and Daily graphs for the S&P500 Index, we can note than all three frequencies are stretched in terms of targets while our envelopes are showing some stress to the upside on our Bi-monthly and Weekly, and have started to head down on our Daily. Timing-wise, a last push higher can still be justified into late Q1, perhaps into earlyQ2, but current levels need to hold for it to materialize. Whatever the extent of the upside retest we still expect into late Q1 / early Q2 (with lower or marginally higher highs), our Weekly and Bi-monthly charts then point to an important top, possibly leading to several quarters of consolidation at least.

Automating our manual interpretation: Over the last 12 months, we have initiated a project to automate the analysis of our graphs. The process aims to automatically

40

RESEARCH identify the best and second best fits for each oscillator series and then weigh these projections according to the position of our envelopes and the risk/reward situation implied by our targets calculations. A price projection is then calculated based on a weighted average of these oscillator projections using “Delta” our measure of historical volatility.

Example of this automatic analysis on the Weekly graph of the SPY (the main ETF representing the S&P500):

Source: MJT Model Copyright © 1985 - Management Joint Trust SA - www.mjtsa.com

Our automatic analysis suggests a potential intermediate top in circa 3 months and an initial consolidation phase into the Summer. For now, according to this initial automatic analysis on the Weekly graph of SPY, further strength cannot be excluded later on this year. Our Daily model however suggests that the trend may have already turned down. The conjunction of both points to a retest up but not necessarily new highs.

Including Cross Asset confirmations within these projections: We then move on to confirm and complete this projection by performing the same automatic analysis on our Daily graphs and complement it by running similar studies on other assets which show a similar cyclical dynamic. This process which we describe as identifying Cyclical Analogs, running their own projections and integrating these for up to 50% of the final projection of the instrument we are analyzing confers cross asset robustness to our automatic projections. It is described in more detail in a recent IFTA (International Federation of Technical Analysts) webinar we held on the 19th of November 2021 for which you can assess the underlying slides on this link. What we can briefly say is that each projection combines 4 alternative scenarios (2 on each oscillator series) for each frequency (Weekly and Daily) on the instrument we are analyzing as well as 4 projections per the best 10 Daily Analogs we use and 4 more per the best 10 Weekly Analogs. All together, each final projection integrates almost 100 automatic projections from the reference instrument and its Cyclical Analogs. The weighing of these different projections is done following an adjustment to normalize volatility across all the different assets so that no projection takes an unnecessary predominance.

www.technicalanalysts.com

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RESEARCH Automated Projection on the S&P500 Index (data from the 18th February 2022, EOD): S&P500 Index

fully automatic, with Analogs Legend: The boxes correspond to the following information: Model fit: compares the models to the history of the oscillators (average from the 88 models which are used): 5-4 is Good, 3-2 is Fair, 1-0 is Poor.

Cross Asset Robustness: compares the final combined projection to the projection resulting from the Analog projections: 5-4 is Good, 3 -2 is Fair, 1-0 is Poor.

Estimated Max upside potential over 12 months.

Estimated Max downside Risk over 12 months.

Copyright © 1985 - Management Joint Trust SA www.mjtsa.com

This prospective graph presents our forward looking estimate of how the price of the S&P500 Index could involve over the next 9 months. It does so by presenting these projections using our Standard Deviation envelopes based off forward looking data.

In this example, the model expects the S&P500 Index to reach back up to its previous highs or slightly below them by late April / May. We then expect a reversal down which could last into the Fall in first instance. The upside potential could justify an 8% bounce from current levels, while the downside risk into the Fall may amount to 9%. This is not catastrophic yet, but does highlight the risk of an important top in the making.

For historical reference, this is the same graph we presented at the IFTA Webinar on the 19th of November 2021: S&P500 Index

fully automatic, with Analogs Our projection was quite accurate in identifying the period of correction that took place from late November into December. Yet, did have too much of a positive bias into the Spring.

Building the cross-asset scenario: To finalize this analysis, we move on to consider our automatic projections on a set of Key Asset Drivers in order to understand which type of environment could justify some kind of retest-up move on the S&P500 into late April / May and then a reversal down into the Summer / the Fall.

Copyright © 1985 - Management Joint Trust SA www.mjtsa.com

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RESEARCH S&P500 Index

US10Y Treasury Yield

US10Y - US3Y Treasury Spread

US Staples sector (XLP) vs S&P500 (SPY)

EUR/USD

S&P500 Value (IVE) vs S&P500 Growth (IVW)

Copyright © 1985 - Management Joint Trust SA - www.mjtsa.com

•

Since last November, the upside progression on the S&P500 has been more difficult resulting in a correction from early this year. While Growth has faltered on an absolute and relative basis, a strong rotation into Defensive sectors such as Staples or Utilities, as well as Value (e.g. Energy and Financials) has materialized.

•

These dynamics can be related to the sharp rally we’ve see on US Yields, generally across the curve, yet especially on the short end. EUR/USD held up in a rather flat consolidation.

•

Going forward, long term yields could be topping out over the next few weeks and could retrace into April. Staples and Value could follow this retracement on a relative basis while Growth makes a come-back. These dynamics could help US markets rebound / retest up, while EUR/USD resumes lower as the yield curve flattens to new lows (i.e. a less cyclical environment).

•

Thereafter, from Mid/late Q2 into the Summer, we expect yields to resume higher again. The yield curve could attempt to steepen slightly, while Staples and Value could outperform again and EUR/USD bounces. The S&P500 Index on the other hand, retraces down again, probably towards the Fall as these renewed inflationary pressures trigger further rate hikes anticipations.

About our automated projections: our program to automate our projections is currently Excel based, yet fully functional. We are currently programming it into Python and by the Summer expect to be able to feed these forward looking price projections through an API. We will then be looking for strategic partners with strong distribution networks to convert this service into a functional platform. Please don’t hesitate to contact us on the details below if you would like to learn more about these developments.

All opinions, news, research, analyses, prices or other information in the article above are provided as general market commentary and do not constitute any financial advice. No economical business decisions should be based solely on the article above.

www.technicalanalysts.com

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Visit STA’s Digital Library!

UK STA members are able to access the City of London Barbican Library’s digital Overdrive collection via their Libby App. For full details on how to join the library go to https://www.technicalanalysts.com/library

44

ANALYST FOCUS

Analyst Interview: Patricia Elbaz puts 5 questions to Murray Gunn Patricia Elbaz MSTA Technical Analyst & Lecturer

Murray, it’s always good to see young graduates starting in banking and various finance roles, taking an interest in Technical Analysis. How were you first introduced to Technical Analysis?

As an Economics graduate, I entered the financial markets thinking that they behaved rationally but quickly realised that they don’t. Thankfully, I soon had the great fortune of working with technical analysis legend Tony Plummer at Hambros Bank from 1992. One of my first assignments was to live-test a futures trading system based on momentum. It was a revelation to see that profits could be harvested from the markets without any “fundamental” input at all. That, and Tony’s seminal work, Forecasting Financial Markets, put me on the path of investigating just what was the underlying driver of price movement. Tony pointed me in the direction of the Society of Technical Analysts, and I was also introduced to Robert Prechter’s work on the Elliott Wave Principle around the same time. I was hooked.

Murray Gunn MSTA Murray Gunn MSTA is Head of Research for Elliot Wave International’s Global Market Perspective, a monthly summary of the firm’s 25 analysts’ views on every major freely traded market in the world. (You can follow his Elliott Wave analysis at www.elliottwave.com) A published author on technical analysis, Murray holds the MSTA, is a Certified Financial Technician (CFTe) and has been investing and trading with technical analysis since the early 1990s. Murray is a former member of the board of the STA.

What indicators would you recommend using when starting to learn about Technical Analysis?

Price! Every indicator is a derivative of the raw price and so it makes sense to start with the source. The Elliott Wave Principle is, of course, based on patterns in the price of a market but there are other price-based methods which are very useful to gain an understanding of what is going on. R N Elliott added a forecasting element to Dow Theory and so an understanding of that is essential. Japanese Candlesticks give a splendid education on psychology. Point & Figure takes us back to tape reading which is essentially looking for price patterns as well. An appreciation of how volume (and open interest) relates to price movements should also be a staple for the beginner.

A number of traders have said that they find technical analysis very useful for short-term trading and outlook. Would you agree with that or do you think that a long-term time frame is just as significant?

In the 1930s, R N Elliott discovered that the markets have a fractal design, meaning that patterns in price repeat at every time scale. This makes an understanding of where a market sits in its long-term cycle critical. It could be termed a “top-down” approach where the starting point is to appreciate the direction of the tide. Then

www.technicalanalysts.com

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ANALYST FOCUS look at the waves and finally the ripples. Charles Dow used this nautical-based language which Elliott expanded on, and it makes clear the importance of all time frames. When it comes to actually trading or investing, the choice of time frame very much depends on one’s own risk aversion. Like weather forecasting, the short-term offers generally higher probabilities whereas there are more variables at play in the long-term. This is one thing I have learnt over the years that has been a revelation. The general belief is that “day trading” is high risk and long-term investing is low risk. It’s actually the other way around.

New!

Student Membership now available!

The STA are delighted to announce a new Student membership category.

Students of recognised academic institutions may join the Society for the duration of their course at the discounted rate of £25 a year.

Student members will have to demonstrate their student status. For enquiries, email the office on info@technicalanalysts.com

MEMBERSHIP What advice would you give an analyst who is starting out learning about the different charts to use - bar, point and figure, candlesticks - and the different indicators?

The most important data point is the daily close and so I would encourage new analysts to get familiar with a simple daily line chart and understand the dynamics around the close in whichever market is being analysed. These days of round-the-clock trading makes it difficult but it’s still possible to mine important information from, for example, the London close in FX markets (London being where the bulk of FX volume takes place). I would also encourage new analysts to fully understand whatever indicator they are using, break it down and even calculate it by hand initially so as to appreciate how it relates to the price movement.

Finally, tell us a little more about the topic that you are teaching on the STA course and your involvement in education.

I will be outlining the major points of Dow Theory, Cycles and Market Breadth. Charles Dow was a business journalist and created his averages (and the Wall Steet Journal) out of a passion for understanding the business cycle. It may seem a little esoteric to those who think that technical analysis is only applicable to day trading, but the forces which Dow wrote about underpin how markets move. Market breadth is very much related to where we are in the market and economic cycle and can be a rich source of information for the analyst.

Thank you Murray for sharing your work and experience with us and for the great advice in using technical analysis tools and indicators. We hope to see many of you at future STA events listed on the website www.technicalanalysts.com.

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BOOK REVIEW

Trend Following Mindset: The Genius of Legendary Trader Tom Basso

By Michael W. Covel (2021) Harriman House, Hampshire, UK

Apparently Tom Basso has earned the nickname of ‘Mr Serenity’ as he doesn’t get excited on good trading days or depressed by bad trading days. The definition of a good day for him is when his trading strategies and models did what they were supposed to do. He anchors the days that making money seems easy by reminding himself of the days when he lost money, and lifts his spirits back up when he is losing money by remembering the days that he made money.

Book review by Gerry Celaya, MSTA

Michael W. Covel has written numerous books that highlight famous trend following traders and money managers, directed a movie that covered key economic themes, runs a website and offers podcasts and social media updates that are very popular. ‘Trend Following Mindset’ compiles his podcast interviews with Tom Basso as well as publishing some of Tom’s research papers. This book will appeal to those who find value in reading about how others manage the mental process of trading and achieve success.

This book was an entertaining read for me. I didn’t make it through the ‘Market Wizards’ books, and generally avoid books that interview traders or money managers in order to try and spill their ‘secret sauce’. I do like books that lay out real technical indicators, models or processes and try and explain what works, and doesn’t work, in different markets. This book doesn’t do that, but I found it interesting as I had never heard of Michael Covel or Tom Basso before reading it and felt that I had learned a lot by the end. Intrigued enough to finish ‘Market Wizards’ and pick up other ‘secret sauce’ books?

Maybe.

‘Trend Following Mindset’ was enjoyable as Tom Basso made it clear early on that the most important thing in his trading process when he ran TrendStat, and now that he focuses on managing his own money, was the mental part of trading. The entry, exit,

risk management and trade selection were all secondary to that in his view.

The book is split into two parts. The first part narrates the numerous podcast interviews between the author and Tom over the years. The second part offers some research papers that Tom and others have produced that offer some insight into their thinking on trade management, gearing and risk management, which I found useful. Tom’s trend following models or methods are not detailed, but as you read the book, it becomes clear again and again that he believes that the search for ‘serenity’ in trading and ‘enjoying the ride’ is more important than what price action gives a buy or sell signal. The idea of holding position sizes that let you sleep at night, taking profits by running reasonable stop profits in your system and controlling volatility in your portfolio or trading system make a lot of sense.

One surprising statistic that he mentions a few times is that he can run systems that he knows will lose money around 66% of the time they are implemented.

He takes the view that as long as the 33% of trades that are successful make a lot more money that the 66% of losing trades gave up (let your profits run, a key part of any trend following system) then that is ok. Another surprising fact that he has strived for, from the start of his trading career (which started as a side project while he was working as an engineer), is to trade and manage money/risk in a manner that allows him to enjoy his lifestyle.

Tom has apparently honed his system to run on a laptop, come up with the trading positions and send the orders out in 12 minutes or so at the end of the trading day. This goal should appeal to all of us who have put in long shifts at trading desks - work smarter, not harder! I would suggest that this book should be part of a traders reading list to give some insight into how important the mental part of the trading process can be, and some useful rules to keep in mind when allocating money to external managers and running trading positions.

www.technicalanalysts.com

47

THE STA

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.

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THE STA

STA Calendar 2022

MARCH

8

Tuesday 8th March 6.30pm Elizabeth Miller MSTA Mars Chocolate UK & Wrigley UK Via Live Webinar

APRIL

Tuesday 12th April 6.30pm One Moorgate Place Lee Sandford MSTA Trading College

APRIL

Thursday 21st April STA Diploma Part 2 Exam (online)

12

21

MAY

10

Tuesday 10th May 6.30pm Via Live Webinar Speaker to be confirmed

JUNE

14

Tuesday 14th June 6.30pm One Moorgate Place STA Summer Party & Awards

JULY

Monday 4th July STA Diploma Part 1 Exam (online)

JULY

Tuesday 12th July 6.30pm One Moorgate Place Joint STA, ACI UK and The Broker Club Mid-year Review of Crypto Currency

4

12

www.technicalanalysts.com

49

THE STA

The Education Channel STA education: the LSE courses and the Diploma in Technical Analysis Monthly meetings videos are available to members www.technicalanalysts.com/meetings Year

Month

Speaker

Description

2022

February

Tom McClellan

An introduction to Market Breadth Indicators

2021

November

John Bollinger

In conversation with Jeff Boccaccio

October

Anthony Cheung

Applying Macro Fundamentals to Short-Term Trading

September

Denise Shull

The New Lessons From Brain Science - And How They Inform Risk Taking

July

2021 Outlook: Mid Year Review

Panel Debate with ACI UK

June

Alexander Aburumieh

Trading an adapted Gann Theory in the 21st Century

May

Robin Mesch

New Thought on Market Profile: Trading the Flow of Control

April

Tom Bundgaard

Long-term forecasting using IPA, Interdisciplinary Price Analysis

March

Niels Kaastrup-Larsen

In conversation with Alistair Philip

February

Clive Lambert

Support and Resistance – Hidden Gaps and Other Methods

STA Library STA UK members are eligible to join the Barbican 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 www.technicalanalysts.com/library

50

THE STA

Bronwen Wood Memorial Prize 2021 Congratulations to Oliver Myers for winning the 2021 Bronwen Wood Memorial Prize.

This award is made for the best STA Diploma Part 2 Examination paper written each year if a score of 90% or above has been achieved.

Bronwen Wood was one of the founder Board members of the modern STA and died suddenly in late-December 2002. Bronwen was instrumental in developing both the STA Diploma Examination and the courses leading to the examination. She wrote and marked all the papers in the early years. Even when she went to work in Abu Dhabi from 1993 to 1999, Bronwen retained a lively interest in how the educational side of the STA was progressing.

Oliver is a Portfolio Manager at Brewin Dolphin, in their Lincoln office. He joined the firm straight after university four and half years ago. Oliver studied for the exams using the STA’s Home Study Course. On hearing that he had won the Award, Oliver said

Oliver Myers

Bronwen Wood Memorial Prize Bronwen was instrumental in developing the STA’s formal qualification in technical analysis, and apart from teaching courses for the STA Diploma, in the early years she wrote and marked all the papers. She was a Board member from 1986 until 1993, when she went to work at Adia in Abu Dhabi, and was also a longstanding member of the board of IFTA and of its executive committee. Through this connection, she was widely respected throughout the world, as well as in the UK, as an outstanding technical analyst and an expert in the teaching of technical analysis.

Bronwen died on 30 December 1992, aged only 60. In her memory, the Board of the STA voted to create an annual award for the best Diploma paper, which is known as the Bronwen Wood Memorial Prize.

“I first discovered Technical Analysis about six years ago whilst at university when I was attempting to learn to trade, and it’s great to see the hard work and curiosity pay off, having moved from first learning about Support/Resistance to now achieving a distinction in the STA Diploma.

I’m very grateful to have been awarded the Bronwen Wood prize which was a quiet goal of mine before taking the exam. The diploma has been very useful, both in terms of new knowledge, and expanding on my current knowledge, whilst the application of analysis on multiple charts/time frames in the Part 2 exam was so helpful in terms of bringing it all together for analysing with a higher degree of confluence. I look forward to carrying on expanding my skills and learning more over time.”

We look forward to presenting this Award to Oliver in person at a special Awards ceremony in 2022 - along with all other successful MSTA candidates in the UK. In the meantime, well done to them and also all our new MSTAs. Click for more info on the Award and our examinations.

www.technicalanalysts.com

THE STA

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 2022 and save £50.

Click here and enter code 'JNLPROMO' in the coupon box to redeem your discount.

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research NEWS

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 info@technicalanalysts.com 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

Congratulations to the latest STA Diploma MSTAs Distinction Dr Ahmad Aizudeen bin Zakaria Dr Azizah binti Asmar George Gabriel Ujai Mohd Firdaus bin Zulkefili Muhamad Somad Albasit bin Muhibin Oliver Myers Sudalli bin Haj Sabtuahim Nik Ahmad Yusri Che Yaacob

Pass Abdul Neqief Khan bin Razali Abdullah Muhsin bin Muhammad Tarmizi Adli bin Ishak Ahmad Farid bin Mohamed Ahmad Hafizol Helmi bin Rusli Aiman bin Mohd Zuhali Aini Zaliha binti Alias Aishah Mohamad Amin Alastair Wilson Dr Alek Missankov Amamad Firdaus M Zainol Anbarasu A/L Kalimuthu Anisah Ozleen Othman Ariffin bin Abdullah Azri Zainul Corinne Lai Chen Adamidou Fendy Ho Muhammad Benny Ho Haziq Ruzaini Mazlan Indrawathy Gunasegaran Dr Mahathir bin Mohamed Mohamad Nurhafizul Mohd Hosni

Mohd Alif bin Ahmad Mohd Ameruddin bin Ahmat Mohd Azizi Darus Mohd Fakhrul Islam Juhali Muhammad 'Adli bin Wan Ahmad Uzir Muhammad Zubair Zain Al-aabideen Nelly Samsuddin Norshahida Ahmad Fuad Philip Sheppard Razreen Ashraf Faiz bin Redzuan Rohaizi bin Bahari Roslinah Laikoi Sofea Arriana binti Rahmat Hidayat Suhaib Kamarudin Syahirul Ikhsan Shaharuddin Syazwan Syafiq bin Satria Sarawak Dr Syed Shafwan Redhauddin Shatri Syed Hasnul Hafiz bin Syed Mahamud Ton Nur Aisyah binti Wan Mohd Zaini Wan Mohd Hafiz Wan Met

54

THE STA

STA Executive Committee www.technicalanalysts.com/executive-committee

Richard Adcock MSTA Vice Chairman & Co Secretary

Jeff Boccaccio MSTA Director

Gerry Celaya BA MA MSTA Head of Marketing

Mark Tennyson d’Eyncourt FSTA Programmes

Tom Hicks MEng MSTA MSCI Director

Karen Jones BSc FSTA Treasurer

Eddie Tofpik MSTA, ACI-UK, ACSI Chair

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

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:

www.technicalanalysts.com

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THE STA

STA Advertising Rates 2022 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.

Position

Price

Specification

Inside Cover

£500.00

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

Full Page

£500.00

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

Half Page

£300.00

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

Quarter Page

£200.00

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 Katie Abberton, Society of Technical Analysts on info@technicalanalysts.com 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.

Contact 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.

The UK’s professional body for Technical Analysts.

Founded in 1968. The oldest of its kind in the world.

The Society of Technical Analysts Dean House Vernham Dean Andover SP11 0JZ tel: +44 (0) 20 7125 0038 info@technicalanalysts.com www.technicalanalysts.com