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Half-Day Technical Analysis Course

Realizing that there is growing interest in the subject of Technical Analysis by college instructors who may not have the preparation to teach all or most of the MTAEF’s 12-lecture course, but who would like to introduce their students to the subject, the MTAEF has developed a condensed, half-day course.

The half-day course, which can be taught in one session or two sessions, introduces students and instructors to the major topics in the course, with a goal of spurring additional interest and, perhaps, leading to a full semester course.

The four sections below can be described in this fashion:

  • Trend and momentum indicators tell the analyst the direction and force of a move;
  • Sentiment and supply/demand indicators help the analyst determine where we are in the move, and
  • Intermarket relationships (the change in value of equity alternatives) can move the entire supply/demand curve for stocks up or down.

If you are interested in presenting this course to your alma mater, your local college/university, or if you are a university professional looking to introduce the subject of technical analysis to your students, please contact us.

Trend & Momentum

The majority of the half-day course is devoted to defining and understanding market trends and momentum. For most technicians this material forms the bulk of their work. This section covers the rationale behind trends, the definition and measurement of trends (e.g., patterns and momentum indicators), relative strength, and money management. Indeed, one must believe that trends exist and can be measured to use technical analysis as an important part of forecasting markets and managing money.

Sentiment

Sentiment analysis, the technician’s method of assessing levels of fear and greed by market participants, has been recognized by academia and fundamental analysts and renamed “Behavioral Finance.” The indicators in this section include polls of market participants, mostly traders, as well as transactional indicators. Transactional indicators include such measures as put/call ratios, short selling, and valuations. Sentiment analysis is not “The little guy is always wrong”; he’s not.

Supply/Demand

Supply/Demand analysis is akin to the work done by quantitative analysts and is often called “Flow of Funds” analysis. The indicators deal with corporate buybacks, new offerings, cash on the sidelines, equity allocations, mutual fund flows, insider activity, and international flows. We believe “Investors make bottoms and traders make tops”; that is, people with long-term horizons are motivated by price and value and people with short-term horizons are motivated by trends. We note that Sentiment and Supply/Demand indicators overlap. For example, mutual fund cash is both a sentiment indicator and a supply/demand indicator: when mutual fund managers have a lot of cash, it means they are bearish on equities (i.e., a sentiment indicator) and they have great buying power (i.e., their potential demand is high).

Intermarket

Intermarket indicators deal with the relationships among the equity market, the bond market, the commodity markets, and the currency markets. The technical analyst’s use of those relationships overlaps with economic analysis. For example, an important precept in technical intermarket analysis is “Stocks are a leading economic indicator, commodities are a coincident economic indicator, and interest rates are a lagging economic indicator.”

 

What's Happening at the MTAEF
Information on the latest news and upcoming events.

Nov. 28th, 2016

The 2016 Market Technicians Association Educational Foundation annual fundraiser was held on October 26th at The Yale Club of New York City. This yearly event is an important source of funding that contributes to the foundation’s ongoing efforts to establish, … Continue reading

Aug. 14th, 2015

Phil Roth, CMT recently made public his Masters Thesis, “Investors Make Bottoms; Traders Make Tops.”  Below, you can find an abstract from the paper: Preface My intention is not to defend or deny the theories of “Behavioral Finance”.  It has long … Continue reading