IFTAUPDATE 2016 Volume 23 Issue 3

page 12016 Volume 23 Issue 3

a newsletter for the colleagues of the International Federation of Technical Analysts

IN THIS ISSUE

President’s Report to Colleagues

1

President’s Report to Colleagues

2

Congratulations New MFTAs!

2

Congratulations New CFTes!

2

MFTA Research Paper

2

Member News

3

IFTA 2016 Conference

4

Calendar At-A-Glance

Education Lounge
5 Using Divergences Between the Commodity
Channel Index (CCI) and the Relative Strength
Index (RSI) for Spotting Turning Points
7

Focus on Reflation, Cyclicals and Value

15

Join the Quest for the “Composite Man”

17

A Perfect Storm for a Goldilocks Market: How
to Prep Your Shelter, Just in Case…

20 Expect a Major Fall in the (Autumn) Fall of 2016
23 MFTA and CFTe Exam Dates
24 2016 IFTA Board of Directors Nominations (Term
October 2016–October 2019)26 IFTA Member Societies
26 IFTA Update Schedule
26 Board of Directors

Next Issue: December 2016
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The IFTA UPDATE is a publication of the International Federation ofTechnical Analysts, Inc. www.ifta.org, a not-for-profit professionalorganization incorporated in 1986.
International Federation of Technical Analysts
9707 Key West Avenue, Suite 100
Rockville, MD 20850 USA
Email: admin@ifta.org • Phone: +1 240-404-6508

Dear IFTA Colleagues,
The countdown to the 29th IFTA Annual
Conference has begun. With less than a month
to go, the hosting society (ATAA) has been
preparing for a memorable event in Sydney.
Whether it is the exciting conference themeor the outstanding list of guest speakers andintriguing topics, I have no doubt that thisconference will be yet another successful IFTA
event, and one that will leave the delegateswith plenty to take back home, digest, andexperiment on while operating in the financial markets. I can already tell that members
across the globe are becoming aware of thisas well, as very few spots remain before theconference is fully booked! So if you plan toregister but haven’t yet, I strongly suggest thatyou take action before it’s too late!
The day before the conference, the Annual
General Meeting (AGM) will be held in Sydney
at the Primus Hotel. The AGM is a unique
opportunity for liaisons/representatives of
IFTA member societies to meet with each otherand with the IFTA board. Both IFTA board
and member society-liaisons will present andshare their reports on the annual events anddevelopments of their organizations.

This year’s AGM agenda will include electing candidates for the IFTA board. This year,
IFTA has seven vacant positions, for which wehave received seven applications compliant
with IFTA bylaws. The candidates’ profiles areincluded in this newsletter. As per the bylaws,
IFTA formed a Nominating Committee consisting this year of Stephanie Eismann (VTAD), Dan
Valcu (IFTA/AATROM), Tom Hicks (IFTA/STA),
Mohamed Younis (ESTA), and me.
Also in October, three IFTA directors will be
stepping down after completing their terms.
Our dear colleagues Akira Homma (Director/
VP Asia Pacific), Dan Valcu (Marketing andMembership Director), and Mohamed Ashraf(Director/VP Middle East and Africa), on behalfof IFTA, I thank you for your profound, active,
passionate, and significant contributions overthe past years. It has certainly been a pleasure
to work with all of you, and I sincerely wish you
all the best in your future endeavours.
On a sad note, ESTA lost a dear friend, colleague, and mentor to many ESTA members—
Mohamed El Zayat MSTA, CFTe—who passed
away suddenly in August. In addition to over

IFTA 2016
Annual General Meeting
Thursday, October 20, 2016
16:00 to 17:30 (4:00PM – 5:30PM)
Primus Hotel Sydney
Sydney, Australia
All IFTA colleagues are invited andencouraged to attend. For further information,
contact the IFTA staff at admin@ifta.org.

22 years of experience in the financial markets as a technical strategist, Mohamed has
been a major contributor to and co-founderof ESTA since its inception in 2001. He held
several positions on the ESTA board and committees, ranging from treasurer to director atlarge, as well being significantly involved in the
ESTA education committee. On the IFTA front,
Mohamed was responsible for CFTe translation to Arabic back in 2006–2007. On behalfof IFTA, I offer my sincere condolences on the

IFTAUPDATE 2016 Volume 23 Issue 3

President's Report continued
passing of my dear friend and colleague, andto his family, ESTA friends, and colleagues.
Through his precious contributions, Mohamed
will always be remembered by ESTA.
Last but not least, I would like to thank all
member societies who shared updates andnews from your local societies with us, as well
as all those who contributed to the production of this newsletter. Sharing information,knowledge, and experience is and will always
be, in spirit, the reason why IFTA was createdand continues to exist.
I’m looking forward to meeting many of you
this year in Sydney at the 29th Annual IFTA
Conference!
Best regards,

Mohamed El Saiid, CFTe, MFTA
IFTA President

page 2MFTA Research Paper

Member News

Jordan Roy-Byrne, CMT, MFTA

STA (United Kingdom)

The Significance of the 400-Day Moving Average as a Sell
Signal as Compared to Other Moving Averages
Jordan Roy-Byrne, CMT, MFTA, is a member of the Market Technicians
Association. He is the editor and publisher of TheDailyGold.com and
TheDailyGold Premium, a subscriber publication that emphasizes
market timing and stock selection for precious metals investors. He is
also the author of the 2015 book The Coming Renewal of Gold’s Secular
Bull Market.
Among other areas, Jordan focuses on intermarket analysis, historicalanalogs, and moving average analysis. He realized that the 400-day MA or 20-month MA
was providing superior signals for primary trend analysis in most markets and asset classes
and decided to study it for his thesis.
With respect to both Gold and gold mining stocks, the 20-month moving average has been
an excellent trend indicator, both in recent years and over the long term. For example, thestrongest bear rallies in both Gold and gold stocks from 2012 to 2015 peaked at the 20-monthmoving average. In early February, both Gold and gold mining stocks exploded throughthat resistance, and the sector has since continued to advance to higher levels.
Jordan’s book shows that Gold is driven by trends in real interest rates (inflation and interest
rates) and little else. As a result, it is the perfect asset class for technicians to follow. Its realtime fundamentals can be charted and measured through charts and technical analysis.

Congratulations Congratulations New CFTes!
New MFTAs!
Eric Benhamou (AFATE)
Jordan Roy-Byrne
Greg Schnell (CSTA)

Mohsin Bukhari (STA)
Federico Bustos (STA)
Harry Callaghan (STA)
Elena Charalambous (STA)
Ian G. Coleman (STA)
Melina Deltas (STA)
Ron Faulkner (STA)
Pierre-Emmanuel Fehr (SAMT)

Edoardo Fusco Femiano
Simon Gray (STA)John Harris (STA)
Nicolas Hatt (SAMT)
Piotr Madej
Serge K. Mazodila (STA)
Timothy McMonagle (STA)Mark W. Muir (ATAA)

Kenneth Ndungu (STA)
Estevao Oliveira
Guillaume Osouf (STA)
James Philip (STA)
Pavandeep Punny (STA)
Colin Ringrose (STA)
Alberto Rossini (STA)
Mohamed Othman Sayed (ESTA)

Daniel Sedgwick (STA)
Matt Simpson
Olga Small (STA)
Kane Stockwell (STA)
Constantinos Tsangarides (STA)
Christian Walter (STA)
Andrew Willis (STA)
Wing Ho Steven Wong (STA)The Society of Technical Analysts
The summer kicked off with the STA
Summer Party and Awards Ceremony,
where diploma certificates were presented to newly qualified MSTAs by the
STA chairman, Axel Rudolph. For the second year in a row, the STA had a teamrunning in the JPMorgan Corporate
Challenge—London’s most popularteam road race—raising funds for Cancer
Research UK.
The next highlight of the social calendar
is the STA Anniversary Dinner, celebrating
30 years since the STA was incorporated.
Guests will gather for drinks and a sitdown three-course dinner at the National
Liberal Club on Wednesday 30 November.
In mid-October the CISI-accredited
Diploma Part 1 course will commence
running for 7 x 1 evening a week classes.
This will be followed by the Diploma Part
2 course in mid-January 2017. For thoseunable to attend the courses in London,
the home study course is available todownload and can be viewed using PC,
Mac, iPad, or Android machines. For
more information on the courses we offer,
please click here or contact the STA office
on info@sta-uk.org
To keep up to date with the STA and its
events, follow us on Twitter @STA_ORG or
like our Facebook page.

IFTAUPDATE 2016 Volume 23 Issue 3

page 3

Visit Conference Website

IFTA 2016 Conference

21–23 October 2016 I Primus Hotel Sydney
http://conference.ifta.org/2016

This year's IFTA conference is being sponsoredby the ATAA. It will run over the three days andis strongly attracting both Australian and overseas technical analysts.

Masaaki Yamada. (Full speaker and presentation details are on the website).

There will be 25 high-caliber speakers, including
Muhamad Alatih, Gregor Bauer, John Bollinger,
Francesco Caruso, Alan Clement, Muhamad
Firdaus bin Majid, Daryl Guppy, Akira Homma,
Alan Hull, Nik Ihsan Raja Abdullah, David Keller,
Takashi Nakamura, Saleh Nasser, Miyoko
Nishimura, Trevor Neil, Jonothan Pain, Hank
Pruden, Adam Sorab, Gary Stone, Andrea
Unger, Mathew Verdouw, Rolf Wetzer and“Early-bird” registration is now closed.
Registration numbers to date, from both
Australia and overseas, have been extremely“robust”. The Primus Hotel is now fully booked;
however, other accommodation options are
nearby.
It is highly likely that the maximum number ofdelegates (due to the capacity of the conference
venue) will be reached. Conference registrations
may need to close in advance of 20 October.

If you are still considering attending IFTA 2016
Sydney, we recommend you decide now andbook soon.
IFTA 2016 Sydney: It will be busy, exciting,demanding, educational and social. Be there
if you can!
Robert Grigg
IFTA Conference Committee ChairIFTAUPDATE 2016 Volume 23 Issue 3

page 4

Calendar At-A-Glance
Date

Topic
Monthly Presentations from local and international speakers on a comprehensive range of topics (e.g.,

HostSpeaker

Location

Time

Contact

STANZ(New
Zealand)

Various

Epsom Community Centre
200-206 Gillies Ave.
Auckland, NZ

Varieswww.stanz.co.nz/

Monthly Meetings are held monthly in nine cities across Australia. All monthly meetings are free to members.

ATAA(Australia)

Various

Various

Varieswww.ataa.com.au/meetings

Monthly Chapter leaders and their volunteer members serve as ambassadors for the CSTA and plan social and

CSTA
Chapters(Canada)Various

Various

Varieswww.csta.org

Monthly Meetings & Events: The STA holds monthly meetings in London, usually on the second Tuesday of

STA

VariesBritish Bankers Association • Pinners Hall 105 – 108
Old Broad Street • London EC2N 1EX

VariesKatie Abberton, info@sta-uk.org

Octsharemarket, CFDs, options, futures, FOREX trading, methodologies, money management, psychology).

Visitors are welcome to attend. Bookings are not required. Visitors fee is $30.

educational events for the area. Events include presentations by industry professionals and technicalanalysis experts and peer learning gatherings. Chapters also play a vital role in their communities byconnecting individuals and promoting technical analysis.
every month, except for a summer break in August.

Nov

2

Master of Financial Technical Analysis (MFTA) Session 2 application, outline
and fees deadline

IFTA

NA

NA

NA

admin@ifta.org

15

Master of Financial Technical Analysis (MFTA) Session 1 paper submission
deadline

IFTA

NA

NA

NA

admin@ifta.org

20

Certified Financial Technician (CFTe) Examination

IFTA

NA

VariesVariesadmin@ifta.org; www.ifta.org

20

IFTA Annual General Meeting (AGM)

IFTA and
ATAA

VariesPrimus Hotel Sydney
Sydney, NSW Australia

16:00-17:30

admin@ifta.org; www.ifta.org

21-23

IFTA 29th Annual Conference: Theory of Profit: Achieving Better Returns ThroughTechnical Analysis

IFTA and
ATAA

VariesPrimus Hotel Sydney
Sydney, NSW Australia

Variesadmin@ifta.org; www.ifta.org

1

IFTA Journal Web publication

IFTA

NA

NA

NA

http://www.ifta.org publications/journal/

15

IFTA Update submission deadline for educational articles (mid-December
release)

IFTA

NA

NA

Variesnewsletter@ifta.org
Attn: Aurélia Gerber, Journal Director

1

IFTA Update submission deadline for news content (mid-December release)

IFTA

NA

NA

Variesadmin@ifta.org

1

IFTA Journal Web publication

IFTA

NA

NA

NA

http://www.ifta.org publications/journal/

15

IFTA Update submission deadline for educational articles(mid-March release)

IFTA

NA

NA

Variesnewsletter@ifta.org
Attn: Aurélia Gerber, Journal Director

28

Master of Financial Technical Analysis (MFTA) Alternative Path, Session 1
application deadline.

IFTA

NA

NA

NA

http://www.ifta.org

1

IFTA Update submission deadline for news content(mid-March release)

IFTA

NA

NA

Variesadmin@ifta.org

3

Certified Financial Technician (CFTe) Level II—deadline to register for April
examination

IFTA

NA

VariesVariesadmin@ifta.org

15

Master of Financial Technical Analysis (MFTA) Session 1 paper submission
deadline

IFTA

NA

VariesVariesadmin@ifta.org
http://www.ifta.org

Apr

20

CFTe II Examination

IFTA

NA

VariesVariesadmin@ifta.org
http://www.ifta.org

May

1

Certified Financial Technician (CFTe) Level II – registration opens for October
examination through IFTA website

IFTA

NA

VariesVarieshttp://www.ifta.org

2

Master of Financial Technical Analysis (MFTA) Session 1 application, outline,
and fees deadline

IFTA

NA

NA

NA

admin@ifta.org

15

IFTA Update submission deadline for educational articles(mid-June release)

IFTA

NA

NA

Variesnewsletter@ifta.org
Attn: Aurélia Gerber, Journal Director

31

IFTA Journal Call for Paper submission deadline

IFTA

NA

NA

NA

journal@ifta.org

1

IFTA Update submission deadline for news content (mid-June release)

IFTA

NA

NA

Variesadmin@ifta.org

Dec

2017
Feb

Mar

June

IFTAUPDATE 2016 Volume 23 Issue 3

page 5

Education Lounge

Using Divergences Between the Commodity Channel Index (CCI)
and the Relative Strength Index (RSI)for Spotting
II. Definitionof the CCI Turning(Calculation, Points
Purpose)By Mag. Cezar Lupusor, CFTecezar.lupusor@yahoo.com

Introduction
In this paper, I will examine visually how to use
divergences between the CCI and RSI for spotting turning points. A turning point is defined
as a change of direction in the prevailing trendof the underlying security, i.e., at a turning
point the trend of the security turns down fromup or up from down.
A divergence occurs when the two technicalindicators do not confirm each other, i.e., one
indicator reaches a new high, for example,
whereas the second indicator fails to reach a
new high as well. This signals a loss of momentum in the underlying security, and the trader
can expect a change of direction in its trend.
Strictly speaking, a divergence can only occur
when the technical indicators have reached an
overbought or oversold reading. Nevertheless, I
expanded the concept of divergence in order toinclude exhaustion points as well. Exhaustion
points will be described later in this paper.

Donald R. Lambert developed the Commodity Channel Index (CCI) in 1980. It is an
The trader should notice, however, that diveroscillator with as filter levels and 0 as a trigger
shows up in a lower amplitude). The look-backunbounded oscillator with ±100 as filter levels and 0 as a trigger line. Its calculation isgences could be misleading in a strong trend:line. Its calculation is based on the following
period also depends on the security’s volatility.
based oncan
the following
formula:a strong uptrend, for instance,
show
formula:numerous divergences between its price and
The CCI is an unbounded oscillator, which
𝑇𝑇𝑇𝑇 − 𝑆𝑆𝑆𝑆𝑆𝑆 20 𝑜𝑜𝑜𝑜 𝑇𝑇𝑇𝑇
𝐶𝐶𝐶𝐶𝐶𝐶 =the technical indicators before a top actuallymeans that theoretically, there are no upper or
0.015×𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀 𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎
materializes—these numerous divergences arelower bounds. is used as a filter to qualify forwhere TP is the Typical Price, SMA (20) is the 20 period Simple Moving Average of theindicative of the strong uptrend. Often thesewhere TP is the Typical Price, SMA (20) is thestrong uptrends (>100) or overbought condiTypical Price,a constantand theMean Average
Deviationofisthe
basedtions
on thedivergences will show up between
the CCI0.015(as is20
period Simple
Movingand Standard
strong downtrends (<-100) or oversold
it is more sensitive than the
RSI)
and
the
price
TypicalPrice,
0.015
isa
constant
and
the
Mean
conditions.
Deviation to reflect dispersion around the mean. TP equals (H+L+C)/3 where H Itismeans
the that whenever the CCIof the security.
Deviation is based on the Standard Deviation
crosses 100, a strong or prolonged uptrend isHigh of the range of the security, L is the Low and C is the Close. The divisor is used forto reflect dispersion around the mean. TP
present and the trader should long the secusmoothing
themoreCCI. Theequals
look-backperiodor parameter
forof
the
20Whenperiods.
Theleaves this overbought zone
As already mentioned, the
CCI is the(H+L+C)/3,
where
H is the High
theCCI isrity.
the CCIsensitive indicator, as it reaches
overbought
range
of
the
security,
L
is
the
Low
and
C
is
the
and
crossesthe0-Line, the setup changes
look-back period is the crucial parameter for identifying oscillators. If it is lowered thisand oversold conditions more often than the
Close. The divisor is used for smoothing thefrom bullish to bearish. When the CCI reaches
the stuck
sensitivityCCI.
of Thethe look-backoscillatorsperiod(thatorshows
up infora thegreateroversold,
amplitudeof theRSI. The RSI is less sensitiveincreases
and it is often
parametera prolonged
downtrend is present
in the range of 40 to 60. I will
come back
CCI isit20
periods. The
look-back period
is theandtraderupshouldoscillator)
andtoifthe
it is raised
decreases
the sensitivityof the oscillator(thattheshows
in short the security. Theselatter point later.
crucial parameter for identifying oscillators.
are technical rules that can be optimized ina lower amplitude). The look-back period also depends on the security’s volatility.
If it is lowered, this increases the sensitivity
accordance with the risk preferences of the
In the next passage I will briefly describe theof the oscillators (that shows up in a greater
trader. It means, for example, that the trader
construction of the CCI and
RSI.
amplitudeoftheoscillator),
and
if
it
is
raised,it
short
The CCI is an unbounded oscillator that means that theoretically therecan
arealreadyno upperor the security when the CCI
decreases the sensitivity of the oscillator (thatcrosses the 0-Line from above.
lower bounds. ±100 is used as filters to qualify for strong uptrends (>100) or

Definition of the CCI
overbought conditions and strong downtrends (<-100) or oversold conditions. It means(Calculation, Purpose)
Donald R. Lambert developed
Commodity
that thewheneverthe CCI crosses 100 a strong or prolonged uptrend is present and theChannel Index (CCI) in 1980. It is an unbounded
trader should long the security. When the CCI leaves this overbought zone and crosses

the 0-Line the setup changes from bullish to bearish. When the CCI reaches oversold aprolonged downtrend is present and the trader should short the security. These aretechnical rules that can be optimized in accordance with the risk preferences of the

trader. It means for example that the trader can already short the security when the CCI
crosses the 0-Line from above.

IFTAUPDATE 2016 Volume 23 Issue 3

page 6

Education Lounge
Definition of the RSI Its calculation is basedIts
is basedon the following formula:
oncalculation
the following
formula:(Calculation, Purpose)100

Average Loss. The look-back period for the
RSI is 14 periods.

J. Welles Wilder Jr. developed the Relative
𝑅𝑅𝑅𝑅𝑅𝑅 = 100 −1 + 𝑅𝑅𝑅𝑅
Strength Index (RSI) in 1978. It is a bounded oscilThe 70 and 30 levels are used to identify overwhere
betweenAverage
Average
Loss. The Average
Gainoversold
islator that moves between 0 and
100;RS
theequals
50-Linethe ratio
where
RS equals
the GainratioandbetweenAveragebought andareas respectively. Theseis the mid-line. It is consideredthe
overbought
whenover theGain
andLoss. The
AverageGain is true
key levels
can be adjusted to 80 and 20 dependsum of Gains
past
14Average
periods divided
by 14.
The converse
for theabove 70 and oversold when
belowLoss.
30. RSIis look-backis the sumof forGains
14 periods
ing on the strength of the trend. Usually, theAverageThe
periodthe over
RSI isthe
14 pastperiods.
used to identify the general trend.
divided by 14. The converse is true for thelevels 40 and 60 are used in addition to 30 and
70. It means that wheneverThe 70 and 30 levels are used to identify overbought and oversold areas respectively. the RSI leaves overbought,
These key levels can be adjusted to 80 and 20 depending on the strength of the trend. a bullish consolidation (orcounter-trend rally) is presUsually the levels 40 and 60 are used in addition to 30 and 70. It means that wheneverent if the RSI finds support at
the RSI leaves overbought, a bullish consolidation (or counter-trend rally) is present if the 40-Line—these are low risk
the RSI finds support at the 40-Line – these are low risk entry points to participate in the entry points to participate in
the uptrend. When the RSI
uptrend. When the RSI leaves oversold a bearish consolidation is present if the RSI finds
leaves oversold, a bearish
resistance at the 60-Line. It follows for a trend of normal strength that the RSI must consolidation is present if thereach overbought once it leaves oversold. If it finds resistance at the 60-Line then this RSI finds rwesistance at the
60-Line. It follows for a trend
Up-Trend is merely a counter-trend rally.
of normal strength that the
RSI must reach overbought
once it leaves oversold. If it
IV. Practical Example
finds resistance at the 60-Line,
Having outlined the CCI as well as the RSI I will return to our main topic, i.e. finding
then this uptrend is merely adivergences between the CCI and the RSI for spotting turning points in the trend of a counter-trend rally.
security. Related concepts to divergences are so called exhaustion points. An exhaustion
point occurs whenever the CCI reaches overbought/oversold whereas the RSI fails to

Practical Example

Having outlined the CCI asreach overbought/oversold. If for example the CCI reaches overbought then the RSI will well as the RSI, I will return
reach a reading around 60 whereas if the CCI reaches oversold then the RSI will reach a to our main topic, i.e., find-ing divergences between
the CCI and the RSI for spotexhaustion point has the same implication as a divergence: it signals a loss of ting turning points in the
momentum and consequently a turning point. The reader will notice that exhaustion trend of a security. Related
concepts to divergences
points are usually more frequent than divergences between the CCI and the RSI.
reading around 40. In both cases the RSI will miss its critical readings of 70 or 30. An

I will show this by using one stock – Micron Technology. The timeframe of the charts is

one year.

are so called exhaustion points. An exhaustion point occurs whenever the CCI reaches
overbought/oversold, whereas the RSI fails toreach overbought/oversold. If, for example,
the CCI reaches overbought, then the RSI willreach a reading around 60, whereas if the
CCI reaches oversold, then the RSI will reacha reading around 40. In both cases, the RSI
will miss its critical readings of 70 or 30. An
exhaustion point has the same implication as
a divergence: it signals a loss of momentum
and consequently a turning point. The reader
will notice that exhaustion points are usuallymore frequent than divergences between the
CCI and the RSI.
I will show this by using one stock—Micron
Technology. The timeframe of the charts is one
year. As can be seen, there are several turning
points on this chart. I have marked a total of
17 turning points.
The first turning point is P1: it is characterized
by a major upward move of Micron Tech. What
do the CCI and RSI tell us about P1? The CCI isoversold, as it is below -100. On the contrary,
the RSI remains above oversold at a reading of about 40. This is a typical exhaustion
setup—the CCI being oversold, whereas the
RSI is not oversold. As a result Micron Techmoves up until P2.
The second turning point is P2: it is the opposite
of P1—the CCI is overbought, as it reached alevel above 100, whereas the RSI fails to reachoverbought. This is another exhaustion setup.

IFTAUPDATE 2016 Volume 23 Issue 3

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Education Lounge
As a result, Micron Tech moves down. The
stock reversed its trend from up to down.
The third and fourth turning points are P3
and P4: by now the reader can see that theexhaustion setup repeats itself.
The turning point P5 is again of major
importance, similar to P1 and P2: the CCI
briefly reached a reading slightly above 100,
whereas the RSI got stuck at 50. Micron Techaccelerates to the downside. Between the
points P6 and P13, there is an enormous bottom formation. The stock moves sideways
as demand and supply are in equilibrium
again. The point P13 marks the end of thisbottom: it is again characterized by the familiar exhaustion setup. Micron Tech moves up
as demand takes control of supply. The point
P14 is characterized by a divergence between
the CCI and RSI: the CCI forms two higher
highs, whereas the RSI forms two lower highs.
As a consequence Micron Tech moves down.
This move can be described as a countertrend rally.

is P17. P17 is the last turning point on this chart:
it is again characterized by the exhaustion
setup, so my prediction would be that Micron
Tech will move down.

Conclusion
I have shown in this paper how to use the CCI
and the RSI for spotting turning points on
the chart of a well-known security—Micron
Technology. I have shown that divergences aswell as exhaustion setups can occur between
the CCI and RSI. These can be used for spotting turning points. Using the CCI in combination with the RSI is not difficult and it may add
considerable value to the tools of every trader.

Jean-François Owczarczak, CFTe
(Article Submitted on 6 September 2016)

Literature
John Murphy “Technische Analyse der Finanzmärkte.”
FinanzBuch Verlag 2006
Kirkpatrick II & Dahlquist “Technical Analysis.” FT Press 2012
Colby “The Encyclopedia of Technical Market Indicators.”
McGraw-Hill Professional 2004

Software
StockCharts.com

About the Author
I have also shown an up-trendline on theMicron Tech chart. This bullish trendline
should be compared with the bearish trendline above the CCI. This is the typical case of abearish divergence between the CCI and theprice of the security. However, this sequenceof bearish divergences between the CCI andthe price of the security is an indication of astrong uptrend. I have mentioned this fact in
the beginning of this paper. The crucial point

Focus on Reflation, Cyclicals and Value

Cezar Lupusor, CFTe,
attended the Vienna
University of Economics
and Business, where hestudied economics. He
finished his studies witha master’s degree. In
2013, he obtained his
CFTe from IFTA. He is a private investor andcurrently lives in Linz, Austria.

Introduction
When we first presented our reflation scenario
back in mid-April of this year, doomsayers werestill very much predominant. At the time, US
equity markets and Oil were still in the earlystages of their rebounds, China was still amajor concern, and Janet Yellen was justifying
a slower path of interest rate increases basedon global economic and financial uncertainties. Our scenario correctly expected equity
markets to temporarily top out in early May
and enter into a correction period during May
and June (although in retrospect the correction
would be better labeled as a flat consolidation
period). Our medium-term anticipation wasthat equity markets should start accelerating up again during the 3rd quarter. You canreview this scenario in the presentation weheld for our IFTA webinar dated 19 April 2016.

Now that the S&P 500 has recently broken
out to new all-time highs, growth prospects in
China have improved, and the FED is turningslightly more hawkish again, we believe it’s time
to review the reflation theme.

Long-term prospects for the S&P 500
We will start our review with our long-termbimonthly charts on the S&P 500 (Chart 1).
The projection we show is the same as theone we had back in April (Chart 1). We will also
backtrack this chart to 2013 to emphasize thatthe correction, which started in summer 2015,
had long been expected (Chart 2). This will also
allow us to highlight the basics of our timing
methodology.

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Chart 1. S&P 500 bimonthly chart or the perspective over the next 1 to 2 years

Chart 2. S&P 500 bimonthly chart as of 26 July 2013

Our automatic messaging is calling for a “probable continuous uptrend” on this long-term chart of the S&P 500. The scenario(model) we project on our medium-term oscillators (upper rectangle on the chart) calls for a Case 5 (C5), i.e., an acceleration up,
which could start soon and lead us into the first half of next year. Following that, a higher “red” bottom on our long-term oscillators (lower rectangle on the chart) could help extend the uptrend into a major top in late 2017 or early 2018. Our price targets (onthe right-hand side of the chart) could first reach above 2,350. These will probably be revised up further as the move accelerates.

Back then, our automatic messaging read “probable continuous uptrend until August 2015”. As a matter of fact, thesystem did confirm the top a bit earlier on 24 July 2015, or a couple of weeks before the sharp August 2015 sell-off. The
price targets we anticipated in 2013 did anticipate levels into 2,050, or just below the 2,100 that were actually achieved.
We’ve overlaid the model behind this automatic analysis to highlight how the algorithm goes about interpreting thecharts (it uses the latest red top to calculate its timing projection toward the following black top: here, a red top in early2013 results in a black top projected for August 2015).

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Methodological brief

Chart 3. Ideal uptrend model (oscillators, derived model and case sequence)

In Charts 3 and 4, Management Joint Trust
SA (MJT—www.mjt.ch) uses standard deviation envelopes to assess trend direction andcalculate potential price targets (middle rectangle on the chart). These elements are thenfactored into the algorithms, which interpret
our medium and long-term timing oscillators(respectively, top and bottom rectangles).
This analysis results in a specific positioningin either an uptrend or a downtrend event
sequence and delivers the related Timing
Message.
Note: Each oscillator is meant to capture a specific time cycle. Each series of oscillators features three oscillators (a blue one–the shorter
term one; a red one–the medium-term one;and a black one–the longer term one). Theirrelative positioning delivers specific situations(so called “Cases”) to always know where you
stand within either an uptrend or a downtrend.
The long-term oscillators (lower rectangle)
serve as the basis for the automatic analysis.
The medium-term ones (upper rectangle) areused as confirmations and to fine tune subsegments of the model.

Ideal uptrend model explanations from left to right: From an
oscillator black bottom (usually a Low Risk or a Case 2), the oscillators and prices will start moving up. An uptrend is confirmed
once a red top can be made above a blue one. The correction
down that follows delivers a buying opportunity (“Resume
Uptrend”) followed by an intermediate top (Case 3). A new periodof consolidation down or sideways then starts, ending with aCase 5 acceleration up toward an important top (usually a High
Risk or a Case 1). For each timeframe, a fixed time unit separates
each timing incidence, so that the distance between a blue andred top is usually X, the distance from the red to the black top isthen 2X, and the distance between the first and second black top
is 3 to 4X.

Chart 4. Ideal downtrend model (oscillators, derived model and case sequence)
Ideal downtrend model explanations from left to right: Froman oscillator black top (usually a High Risk or a Case 1), theoscillators and prices will start moving down. A downtrend isconfirmed once a red bottom can be made below a blue one. The
correction up that follows delivers a selling opportunity (“Resume
Downtrend”) followed by an intermediate bottom (Case 4). A new
period of consolidation up or sideways then starts, ending with aCase 6 acceleration down toward an important bottom (usuallya Low Risk or a Case 2). For each timeframe, a fixed time unit
separates each timing incidence, so that the distance between a
blue and red bottom is usually X, the distance from the red to theblack bottom is then 2X, and the distance between the first andsecond black bottom is 3 to 4X.

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We recently added a new functionality thatallows users to overlay their own interpretation, i.e., position their own uptrend anddowntrend models on the charts. This is agreat addition in terms of tutoring users on
the system as well as visually projecting themost likely scenario.
Overall, the MJT system, which was first developed in the 1970s, can be applied to any asset
class, any timeframe, to relative charts or to
portfolios with many positions. We would bedelighted to explain more about our methodology, our functionality set, and our coverage(we cover 5,000 instruments globally acrossstocks, indexes, trackers, FOREX, interest rates,bond indexes, and commodities, on timeframes
ranging from bimonthly to intraday). Please
don’t hesitate to contact us using the details at
the end of this article.
We will now move on to review our case forreflation.

Recent historical perspective
Chart 5 shows a mosaic of four long-term
charts. Mosaics offer great market visualisation for intermarket analysis. We recently
introduced a new functionality to allow users
to create their own mosaics of up to 15 chartson the system.
In early 2014, following several years of loose
monetary policy (US QE, SNB peg, Abenomics
Chart 7. I), the ratio between the S&P 500 andthe 30-Year Treasury Futures entered a periodof consolidation. This inflexion point (a Case

3 intermediate top on our chart) coincidedwith the beginning of the FED tapering program, which extended into late October 2014
when FED asset purchases were ultimately
halted. During this tapering process, US GDP
was holding up nicely above 4%. Yet, in themeantime, the recovery in Europe had lost
momentum and ended with the resurgenceof the Greek debt crisis, EUR/USD droppingfrom 1.40 to almost parity and the announcement of the huge ECB QE program in early2015. The second half of 2014 also saw the
beginning of the sharp drop in oil prices andits negative incidences on the US oil industry
and high yield, as well as more generally oncommodities and emerging markets. On theback of these negative global developments,
US GDP growth slowed down to circa 2% in2015 and ultimately 1% since the beginningof 2016. During 2015, with the FED on halt toraise rates, Japan extending its Abenomics
program, and the huge ECB QE program inplace, the S&P 500 vs. the 30-Year Treasury
Bonds Futures ratio (revert to chart above)
did make a marginal new high in June. Yet,
we believe the move was still part of the consolidation pattern started in early 2014. This
top was rapidly reversed, as the stock market
bubble in China—initiated on the back of the
Shanghai–Hong Kong connect program anda series of rate cuts—ultimately burst, andBrent Oil resumed its downtrend below $50
to ultimately reach $28 in January this year.

Fast forward to today
According to the models we’ve drawn on theprevious charts, we believe the S&P 500 vs.

the 30-Year Treasury Bond Futures ratio hasmade an important low earlier this year. A
Case 5 bottom (“C5”) could soon materialize(i.e., a higher low that concludes a consolidation period and leads into a new acceleration up). At the same time, the downtrend on
EUR/USD now seems extended. It could start

reversing up in a few months once reflation
gathers global steam (reflation will probably
start in the US). Oil has reached an importantbottom and could continue its correction up.
Finally, China has stabilized, creating a basethat could see it resume its uptrend into 2017.

Chart 5. Bimonthly mosaic (or the perspective over the next 1 to 2 years) on S&P 500 vs. 30-Year
Treasury Bond Futures, EUR/USD, Brent Oil and the Shanghai Composite Index (models havebeen added to facilitate interpretation)

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Oil, a key reflation actor
The case for reflation is based off the global
recovery and its anticipation. With monetary
policy around the world being still very accommodative, it could materialize as the businesscycle enters a cyclical expansion. We believethat asset and sector rotation may be ripe foran acceleration in inflation-sensitive assets(our current interpretation of the Pring Turnermodel). Indeed, following widespread liquidation, most commodities have initiated afirst leg up. At the same time, US stocks haverecently broken out to new highs, and bonds
seem expensive, with many trading at negative yields. On the sector front, 2015 saw early
cycle movers such as Consumer Discretionary
or Technology outperform. Now, Industrials
and Materials could soon be breaking out ona relative basis, and Energy could follow suit.
The US definitely leads the theme as a data
dependent FED remains on standby despite atight labor market, yet loose monetary policies
and lower equity valuation elsewhere, as wellas increasing discussion about fiscal stimulus worldwide, could see other developed
markets—and especially emerging markets—aggressively catch up.
We will start our review with the oil market,
which, along with other commodities, is oneof the key actors of this positive accelerationof the business cycle.

Chart 6. Brent Oil bimonthly chart or the perspective over the next 1 to 2 years
Our automatic messaging has identified a Probable Case 4. Although a
Case 4 is theoretically an intermediatebottom, the reaction up that follows on
a long-term chart such as the bimonthly
one above could last 1 to 1.5 years(possibly into mid-2017 in our presentcase). Targets (right-hand side of thecharts) show that impulsive targets
down (toward $20) have almost beenreached and that the correction up thatis underway could lead us back toward$76, possibly above $100. Although at
early stages of a recovery, this longterm chart is promising. We also get
comfort from the following mosaic
looking at similar long-term intermediate bottom on Emerging Markets vs. the
MSCI World Index and the MSCI World
Index vs. the S&P 500, as well as theSilver to Gold ratio and Copper.

Chart 7. Bimonthly mosaic (or the perspective over the next 1 to 2 years) on the MSCI Emerging Markets
Index vs. the S&P 500, the MSCI World vs. the S&P 500, Silver/Gold ratio and Copper
As the recovery accelerates andcommodities enter a second leg up,
we expect the reallocation of capital
into Emerging Markets to increase (aCase 4, which has already started toreact). More generally, once confidence
returns, we expect capital flows out of
the US into other markets, which today
show cheaper valuations levels andhigher return perspectives (the MSCIWorld has reached a Low Risk zone vs.
the S&P 500). On the metals front, theSilver to Gold ratio is reacting off a Case
4 (the ratio is often used as a proxy forhigher industrial metals demand vs.
Gold), while Dr Copper (itself a proxy forupcoming economic health) is waiting
to confirm a similar configuration. Allfour charts are positioned on importantbimonthly bottoms, which could seethem correct up into the second halfof 2017.

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Bond markets waiting to correct
Although secular deflationary forces arestill strong, the above cyclical reflationary
scenario, if correct, could trigger a sizeable
correction down on bond markets. As withother corrections in recent years (2003–2004,
2005–2006, 2009–2010, 2012–2013), it could lasta year to a year and a half and add between
100 to 150 bps to the 10-year US government
yields. This is equivalent to a circa 10% correction on bond prices, which is a lot in anenvironment were most bonds offer little yieldcushion. (Chart 8)
To refine our timing and have a closer look at
the internals of the US bond market, we will
review the following weekly mosaic, looking
at perspectives for the yield curve as well as
different segments of the US bond markets(Chart 9).
We believe that the corrections in Chart 9 could
gain momentum during the coming quarters.
As bond markets correct, investors will to want
to seek protection by lowering duration and byconsidering inflation-protected bonds. They
will also need to take on more risk, favoring
the corporate bond market and ultimately
high yield.

Chart 8. US 10-Year Government Bond Yields bimonthly chart or the perspective over the next 1 to 2 years
Following their rebound off a Case 4 in
2012–2013 on our longer term oscillators(lower rectangle), US Treasury yields
resumed their downtrend in a succession of descending tops (Case 6). This
acceleration down should be coming
to an end between now (our suggested
model position) and January 2017
(automatic message). Our mediumterm oscillators (upper rectangle) are
getting close to a Case 4 intermediatebottom. This also implies at least several
quarters of consolidation up.

Chart 9. Weekly mosaic (perspective over the next several quarters) on IEF (iShare 7–10-Year Treasury Bond
ETF), SHY (iShare 1–3-Year Treasury Bond ETF) vs. IEF, TIP (iShare TIPS Bonds ETF) vs. IEF, HYG (iShares iBoxx $High Yield Corporate Bond ETF) vs. LQD (iShares iBoxx $ Investment Grade Corporate Bond ETF)
Following a consolidation throughout
the year, IEF ended 2015 with a Case 5
acceleration up. It has now reached ahigh-risk zone and may have alreadystarted to correct down. The yield curve(SHY vs. IEF) followed the opposite
path, steepening slightly in 2015 before
flattening again aggressively during thefirst half of 2016. We believe it has now
reached a low risk zone and could start
steepening again. TIP vs. IEF reversed up
in the first quarter 2016. Our model wasa bit late but can now confirm a low-risksituation, i.e., a comfortable base to
move higher as investors gradually seek
more inflation protection. HYG vs. LQD
has made a Case 4 intermediate bottom
early in 2016. A first leg of correction up
has been completed. It is now waiting toconfirm that it can move higher.

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Internationally, we see similar patterns, as
you can observe from the mosaic shown inChart 10.

Chart 10. Bimonthly mosaic (or the perspective over the next 1 to 2 years) on the Bund,
10-Year Japanese Government Bond Futures, the spread between 10-Year and 2-Year YearEuro Swap rates, as well as between 10-Year Italian and German Government Bond yields
The Bund and the Japanese
Government Bond Futures are close
to completing a long-term uptrend(approaching a high-risk zone). We
believe they could initiate a correction down over the next coupleof quarters. The European yield
curve is close to an intermediate“red” bottom, which could see itsteepening during several quarters.
At the same time, government
credit spreads should narrow
again in Europe, as with the Italianvs. German spread, which should
resume its downtrend into late 2017.

A quick look at the dollar
As mentioned earlier, the long-term downtrend
on EUR/USD seems extended. It could start
to reverse over the coming months (a low-riskzone is expected between now and year end).
We will now consider the weekly chart of the
Dollar Index to gain a more precise perspective. (Chart 11)tChart 11. Dollar Index weekly chart or the perspective over the next several quarters
Since its strong uptrend in 2014, the Dollar Index has
struggled to move much higher. It is now approaching a high-risk zone on both our long-term andmedium-term oscillators (respectively lower and upper
rectangles). These should result in several quartersof consolidation down into 2017. These tops could
coincide with the globalization of the reflation trade,
as investors start to seek more risk exposure in emerging markets and undervalued developed markets(and their currencies). Over the next few months, theDollar Index may attempt a last move up to re-test its
highs. Yet, the trend looks exhausted, as confirmed
by our automatic messaging system, which is alreadypositioned in a downtrend (i.e., the correction up sincelate April/early May is labeled as a correction up rather
than a new impulse).

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Value vs. Growth
We conclude our longer term analysis with
the Value vs. Growth theme. We believe it
plays well into many of the arguments developed above. Indeed, when cyclical recovery
accelerates, typical value sectors such as
Industrials and Energy usually outperform.
At the same time, a correction up in interest
rates should benefit Financials (banks especially), another value sector, while negatively
impacting the valuation of companies withlong-dated cash flow projections (typicalof growth sectors such as Technology and
Healthcare)(Chart 12).

What to monitor over the next
couple of months
To monitor the shorter term developments ofour reflation scenario, we will focus on two
main items: Brent Oil and the S&P 500. We will
use our daily charts, which typically give theperspective over the next few months. Bothassets are currently consolidating following
their first leg up since the January/Februarylows. Over the next few weeks, and couple ofmonths, it will be crucial that they hold up at
high levels in order to build a solid base for asecond reflation move up into 2017. (Charts
13 and 14)

Chart 12. IVE ( iShares S&P 500 Value ETF) vs. IVW (iShares S&P 500 Growth ETF) bimonthly or
the perspective over the next 1 to 2 years

Chart 13. Brent Oil daily chart or the perspective over the next few months
According to the model on
our long-term oscillators(lower rectangle), Brent oil
topped out a bit earlier thanplanned, in June. That said,
if we do follow the modelthrough, Brent could now
be in a position to resume its
uptrend. The medium-term
oscillators (upper rectangle)
started a downtrend in June.
They are now approaching
the timing of a Case 4 (C4)black bottom (between
now and mid-September).
This bottom could offer welcome support to the resume
uptrend situation outlined
above on our long-term
oscillators. More generally,and despite a certain levelof volatility, the consolidation down on Brent Oil has
remained relatively tame since it topped out in June. Going forward, we remain confident with our global
reflation scenario, as long as it can hold above the lower end of its corrective targets (i.e., above $36).

Chapter 14. S&P 500 Daily chart or the perspective over the next few months

The downtrend model on our long-term oscillators (lower rectangle) is close to perfection. Indeed, following many yearsof underperformance (-35% since 2006), Value has finally reached a low-risk zone vs. Growth. Our corrective targets now
indicate that it could outperform between 10 and 20% over the next 12 months.

Mid-August, the S&P 500
reached a Probable Case
3 intermediate top on our
long-term oscillators (lower
rectangle). Typically, aCase 3 would see prices
consolidate from 3 weeks
to 1.5 months. Following
that, prices would typicallyresume their uptrend on a
blue bottom and accelerate on the following higher
red bottom. Our mediumterm oscillators (upper
rectangle) also made a
top in August, yet only a
red one. This implies thatprices could resume their
uptrend sooner rather thanlater to reach a mediumterm black top by end of
September. Although the medium-term and long-term oscillators may seem in contradiction here in terms of timing, such patterns are typical of running consolidations, when the markets go through a series of small gyrations
at high levels before accelerating higher. This situation is not dissimilar to what happened in the Autumns of 2003
and 2009 on the same S&P 500. That said, we intend to remain prudent until the second half of September (basedon our long-term oscillators).

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We remain at your disposal to provide moredetailed insight into our reflation scenario. ).
Many thanks
Jean-François Owczarczak, CFTe
CEO, Management Joint Trust SA, Geneva,
Switzerland. email: jfo@mjt.chphone: + 41 22 328 93 33 • skype: jfozak
All opinions, news, research, analyses, prices orother information in the article above are provided as general market commentary and do notconstitute any financial advice.

About the Author
Jean-François Owczarczak
is the CEO of Management Joint Trust SA (MJT—
www.mjt.ch), a company
founded in 1969 in
Geneva, Switzerland,
which provides institutional market advisory
services based on proprietary algorithms. The methodology uses timing
oscillators, trend analysis and price target
calculations to monitor risk/reward and cyclicality as well as project likely market scenarios
over timeframes ranging from longer term
charts to intrahour. Coverage includes circa
5,000 instruments over all asset classes (stocks,
indexes, ETFs, commodities, bond indexes, andinterest rates). Mr. Owczarczak started his
career in investment banking (Paribas, thenDeutsche Bank in London), joined MJT in 2003,
was awarded IFTA’s Bronwen Wood Memorial
Award in 2013 (for the best CFTe certification
diploma paper in the world during 2012), andwas nominated in 2015 as Finalist in “the technical analyst awards” (under the FinGraphs
brand-name) for his research.

Join the Quest for the “Composite Man”
Hank Pruden, Ph.D.
Professor, School of Business , Golden Gate University, San Francisco, CA, USA
hpruden@ggu.edu
The most profound lesson I learned abroadwhile working with individuals and groups
during my year as IFTA’s Roving Ambassador(2004–2005) was the essentialness of theconcept of the Composite Man for studentsof the Wyckoff Method of technical analysis.
As Richard D. Wyckoff and his disciples have said:
In studying, understanding, and interpreting market action, we consider all market
action as a manufactured operation inwhich the buying and/or selling is sufficiently
centered and coming from interests better informed than the generally untrained
individual investor/speculator. The manylarge interests which do have an effect on
the market place (trust companies, banks,
mutual funds, investment trusts, investmentcompanies, hedge funds, specialists, position brokers, etc.) are best thought of as theComposite Man. This Composite Man causes
the market to act and react. Or, what actually happens is the market responds to theageless, natural law of supply and demand.
The Composite Man and the effects of thelaw of supply and demand are really synonymous. It is the result of the motives, objectives, hopes, and fears of all the buyers andsellers whose actions produce the net effectupon the market.

Other terms which may be thought to besynonymous with the Composite Man
would be “the market,” “the sponsor,”“the operator,” or “they.” These terms areused interchangeably…. The selection of theterms is determined by what is most meaningful to the student [emphasis added].
It should be your objective to think of theComposite Man as the primary force in themarket place. Thinking of him in this lightshould enhance your analysis of the action
resulting from the dominant groups operating within the individual stocks and their
total effect within the general market place.
During my IFTA Ambassadorship I cameto better appreciate how difficult it is for
traders and analysts to really grasp andapply with ease the concept of the Composite
Man. The upshot of that lesson learned
abroad was that serious students need to
track down the Composite Man. Each ofus needs to understand him and use him
more thoroughly, more intimately, and more
profoundly.
To commence this quest for the Composite
Man, you can rely on the fine starts made byRichard D. Wyckoff and his associates. You

can also turn to the captivating anecdotes
found in Reminiscences of a Stock Operator.
To dig more deeply, select any of the following available routes. There is the historical route of studying the character, life
and times of the legendary operators ofWall Street in the early 1900s or of otheroperators on earlier streets, for example,
James R. Keene. Another route would be to
conduct the quest using the most modern
analytical tools available from the theories of behavioral finance. An interesting
and creative approach would be to capture the Composite Man with allegories andmetaphors. A challenging, and perhaps themost profound route, would be to collect anunderstanding of the Composite Man andincrease your capacity to make profitable
use of that Composite Man Concept throughwriting, especially fictional writing.
During the year that I travelled about Europe
and the Middle East, my awareness of thepower of writing, particularly the powerof writing fictional stories, became considerably enhanced. In Spain, I found fruit in
Washington Irving’s Tales of the Alhambra.
In Paris, I located a good guide in William H.
Gass’s Fiction and Figures of Life. Then there

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was the inspiring visit to Winston Churchill’shome in Chartwell, England. In Cairo, I was
introduced to the fascinating short stories recorded in The Time and the Place, by
Egyptian Nobel Prize Winner Naguib Mahfouz.
Finally, in Prague, the Czech Republic, I visitedan intriguing exposition of Franz Kafka, andthen purchased and studied a book coveringthat exposition titled The City of K.: Franz Kafka
and Prague.
All of the foregoing routes and books instruct
us to believe that we have powerful ways
within our grasp that enable us to command a greater mastery of the concept of
the Composite Man. For example, Kafka, who
was the master at getting behind the scenes
and exploring the essence of things, had thefollowing to say about his craft of writing:
The strange, mysterious, perhaps dangerous, perhaps saving comfort that there is in
writing: it is a leap out of murderers’ row; itis seeing of what is really taking place. Thisoccurs by a higher type of observation, ahigher, not a keener type, and the higher
it is and the less within reach of the “row,”
the more independent it becomes, themore obedient to its own laws of motion,
the more incalculable, the more joyful, themore ascendant its course.”
Literature is a fiction that achieves its greatest power when it reveals, denounces, ordismantles the powerful fiction that governs
the lives of men...

Within my “Three-in-One Trader Model”
there is an additional or fourth dimension,
the person of the trader or technical-trader
himself or herself. An image of this idealized
trader is visible in my book, The Three Skillsof Top Trading. The image of the 3-in-1 trader
appears in the center of that model, where
it suggests the combination and unificationof the three other dimensions or the threeelements of behavioral finance, pattern recognition, and mental discipline personified
in one individual.
A fruitful future direction for case study
research would be the pursuit of the “person” contained within the Three-in-1 Trader
Model. For a sense of proportion and direction in conducting such a pursuit, one canturn to the historical examples provided by
Edwin Lefevre in Reminiscences of a Stock
Operator. Some observers have asserted
that the book was based on the persona andthe exploits of Jesse Livermore, the famous
trader of the 1920s. Other observers believethat the numerous anecdotes were reallyfictional, that they were inspired by the lives
and accomplishments of the many real
traders encountered by Lefevre during that
epoch of the early 1900s on Wall Street.
The principal character found in the
Lefevre book, Mr. Larry Livingstone, could
well be a composite of many other men.
In any respect, traders and analysts havediscovered and rediscovered this book asa treasure chest. Reminiscences can serve

as a valuable means of rounding out theComposite Man.
The concept of the Composite Man can be
fashioned into an archetype, a fictional character, who works behind the scenes. A useful
guide is for one to follow in his footsteps byreading the charts per the Wyckoff Method
to interpret his/her intentions and then to act
accordingly.
Although the concept of the Composite Man isa valuable heuristic for grasping the essenceof the 3-in-1 Trader, it is an elusive concept. It
has been my experience that the concept of
the Composite Man is difficult for professional
people who are active in the market to grasp
and thus to employ with ease. Therefore, aquest for the concept of the Composite Man
is an ongoing task of high priority for all IFTA
members.

References
Hank Pruden, The Three Skills of Top Trading (John Wiley& Sons, 2007).
Edwin Lefevre, Reminiscences of a Stock Operator, reprint(John Wiley & Sons, Inc.).

About the Author
Dr. Hank Pruden is a professor in the School ofBusiness at Golden Gate
University in San
Francisco, where he has
been teaching for 37
years. Dr. Pruden is morethan a theoretician; he

has actively traded his own account for the
past 20 years. His personal involvement in themarket ensures that what he teaches is practical for the trader and NOT just abstract academic theory.
Dr. Pruden is the executive director of theInstitute of Technical Market Analysis (ITMA).
At Golden Gate University, he developed theaccredited courses in technical market analysis in 1976. Since then, the curriculum has
expanded to include advanced topics in technical analysis and trading. In his courses, Dr.
Pruden emphasizes the psychology of trading
as well as the use of technical analysis methods.
He has published extensively in both areas.
He has mentored individual and institutional traders in the field of technical analysis
for many years. He presently serves on theboard of directors and is past president of
the Technical Securities Analysts Associationof San Francisco. Dr. Pruden was also on theboard of directors of the Market Technicians
Association (MTA). He has served as vice chair,
IFTA (International Federation of TechnicalAnalysts); IFTA educates and certifies analysts
worldwide. For 11 years, Dr. Pruden was theeditor of The Market Technicians Association
Journal, the premier publication of technicalanalysts. From 1982 to 1993 he was a member of the board of trustees of Golden Gate
University.
Dr. Pruden is the recipient of IFTA’s 2013 Lifetime
Achievement Award.

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A Perfect Storm for a Goldilocks Market: How to Prep Your Shelter, Just in Case…
By Jeanette Schwarz Young, CFP©, CFTe, CMT, M.S.

What we need to watch:
 FOMC decision to raise interest rates thismonth or in December, whatever!
 US Dollar, which gives clues for everything!
It is important to note how the US Dollar’sstrength has impacted corporate income.
(See charts at the end of the article.) Gold and its role as a currency, a metal anda hedge against inflation. Although whenacting as a commodity, gold depreciates
as the US Dollar rises, during any global
currency disruptions, gold becomes the defacto safety net currency. For those whoare adventurous, buy gold in a weakercurrency rather than the US Dollar to takeadvantage of the strength of the US Dollar
and the weakness of the target currency
while giving you an exposure to gold.
Defensive ball via options: Buy put spreads
on the S&P 500 futures, SPY, or NASDAQ,
depending on the concentration of your portfolio (buy a higher strike and sell a lower striketo help offset some of the costs). For example,
you could purchase the December 2035 putson the S&P 500 for 45.88 and then sell the2010 puts for 39, the cost would be 5.88 andoffer you 20 points of downside protection.
Alternatively, you could buy the 2030 puts

for 44.75 and sell the 1990 puts for 35.5, giving you 40 points of downside protection fora cost of 9.25. The amount of put spreadsbought/sold is dependent on the size of theportfolio you are hedging. Support for the
S&P 500 futures is at 2030.25 below that themarket will likely fall to 2019 then 2012. Belowthat level, there will be a painful trip to 1992
and then 1967. The upside resistance level is at
2184.25. Above that level, there is open space!
Sell covered calls on stocks in your portfolio,
making sure to capture any dividend thatmight be paid. I am a believer in selling naked
puts on stocks that I want to own. I get paid
while waiting to purchase the security. Keepstops active.
September is the worst month of the year,
as investors sell fearing a October crash.
While this typically doesn’t happen, theOctober 24, 1929, and October 19, 1987, free
falls have burned painful memories into thecollective memories of investors. By the third
week in October, the pressure is off and themarket rallies. We have reason to believe
this effect may be somewhat delayed thisyear because…. The US elections will bleed
uncertainty into the markets. The markets
hate uncertainty! Chaos reigns!!! No matter
what the outcome, the reality is that nothingmuch will change. Remember that whatever is being promised has to be passed by
Congress…..good luck on that one! Then
we move quickly into December tax-sellingseason.
While none of this sounds great for the bulls,
much of this is seasonal and as such will pass.
Money is flowing to the United States fromabroad because we actually have companies that pay decent dividends and bondsthat pay interest rather than charging theinvestor to park their money. Another pieceof support for the market is that baby boomers are retiring and cannot live on the paltry
interest rates seen on government bonds andare subsequently looking for dividend-paying
equities as investment to pay their bills. The
only rub is that equities move both up anddown and may or may not keep their value,
while bonds fluctuate in value but eventually pay off at full value when due or called.
Seniors have less time to recoup any losses,
simply because the clock is running on theirtime horizon.
FOMC RATE HIKE in plain English means the
FOMC believes the US economy is doing wellenough to absorb a rate hike, minimizing
the negative effects of the increased costof money. What we need to ask is are thegovernors correct or are they misreading
the economic data? I believe that a strong
dollar, the short-term result of a rate hike,will continue to have a negative effect on
corporate earnings and an overall deflationary effect. That, paired with the greater
cost of borrowing money, could impact US
economic expansion. That said, with the
10-year treasury at 1.61% and the yield of
the German bund is not negative, where
do you think global investments will flow?
The market pressure produced by foreign
funds chasing comparatively high US rates
will prevent any serious run up in US interest
rates. Unfortunately, global yield-seeking
investments flowing into our shores might
prevent significant rate increases. As the
US government bond interest rates decline,
the cost of hedging currency risk for foreign
investors impacts the flow of funds to theUnited States. At this time, the hedge canbe paid for and interest rates collected. Just
remember, the cost of the hedge will impact
the flow on money in a declining rate environment. The result of lower corporate profits due to the effects of a strong US dollar
will be reduced employment and reduced
capital expenditures (machinery and equipment). This last point is, of course, with the

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Education Lounge
USDX weekly

USDX daily

GOLD daily

GOLD Heikin-Ashi declining volume

Notice on all charts, I use horizontal lines as wellas trend lines. CQG provided the charts used.

IFTAUPDATE 2016 Volume 23 Issue 3

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exception of opportunities to reduce costs,
such as equipment that replaces humanlabor. Mergers and acquisitions will continue
as corporations try to trim expenses by merging with companies that will bring value tothe bottom line.

Brexit shopping bash!
Money has been flowing into the US markets
for the juicy yields on the bonds. How long
can this last and when will see this migrationof money stop? The flow of money will end
soon because, unless the yields appreciate,
the cost of hedging that transaction back into
the investing currency will negate the interest
rate earned. That should slow down the flowof money into the US markets.
The Bank of England devalued its currency
by lowering their interest rates. The effect of
doing that is to deflate the value of the currency. Here in the USA the FOMC seems to beitching to raise interest rates, which would
make the US Dollar strong. A weak currency
can be inflationary while a strong currency
can be viewed as deflationary. Why? Well,
because a strong currency can buy more
stuff, especially when buying from a weakercurrency. For example, should we want tobuy real-estate in London with our strong
US Dollars, it is much cheaper today with thepound at 1.31 to the US Dollar than it was a
couple of months ago, when the pound was
1.53 to the US Dollar. Your London hotel room
will be cheaper if you are from the UnitedStates, and the tours will certainly be cheaper.

English companies might be so cheap as tobecome the target for a takeover. Imports fromEngland will also become cheap. Any wonder
why England is the hot destination for tourism.
Brexit put England on sale, not only for tourists,
but also as a prime target for mergers and acquisitions of companies. If they were fairly valued
before Brexit, they are downright cheap now.
What does the weak pound gain? Clearly
tourism, shopping, everything is cheaper inEngland; exports are hot because they are
now cheap, and companies, well they too
are cheap. We should see some aggressive
takeovers in the near future. If you are English
and live in England, the world hasn’t changed
much. Your devalued pound still buys you
the same stuff it bought before. Imports are
expensive, and travel will likely be out of thequestion for a while.
As Americans we can stock up on thoseimports from England that a couple ofmonths ago were too expensive. Everythingis on sale in England…enjoy and shop on!

About the Author
Jeanette Schwarz Young
CFP®, CMT, M.S., hasbeen a Wall Street professional since 1981, when
she began her professional career withT h o ms o n M c K in n o nSecurities. Her career

includes portfolio management, syndication,
option strategist, hedger, operations principal,
bond principal, pit trader, and general market
trader. Jeanette worked for the NYBOT (NewYork Board of Trade) and later ICE, where she
wrote, produced, and aired two daily market
reports covering the financials, currencies, andsofts, which include Frozen Concentrated
Orange Juice, Sugar, Cocoa, Coffee andCotton. She has been a frequent guest on FOX,
CNBC, Bloomberg, Yorba TV, CNN and others.
She was a market maker in the FINEX ring(Russell 2000 ring) and became an expert
hedger. As such, she has used this skill-set toprotect capital and make money.
Jeanette was the first director of the CMT program for the Market Technicians Associationand is the past president of American
Association of Professional Technical Analysts
and continues to serve on the board of directors. She is also a past and current member of
IFTA’s board of directors. Jeanette is the authorof the Option Queen Letter, a weekly newsletter
issued and published every Sunday. She is amember of ICE, COMEX, and CHX holdings,
and is also a member of the Adelphi University
Presidents Counsel.
In 2007, her book The Options Doctor was published by John Wiley & Son. She placed third in
the globe in the National Investment Challenge
Pro Option’s Division in the mid-90s.

IFTAUPDATE 2016 Volume 23 Issue 3

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Expect a Major Fall in the (Autumn) Fall of 2016
By Ron William, CMT, MSTA

(This article was originally published on June23, 2016, and then September 8, 2016, and later
updated after the predicted early stage sell-off
in equity markets after each of those timing
windows.)

storm” of almost 60 trading days without a 5%
move up or down. In price terms, a number ofmarkets also triggered DeMark™ exhaustion
signals, which still suggests further downsidepressure ahead. These market risks are further
heightened against the backdrop of rising
volatility (VIX).
Why now? It’s just time. One technical piece ofthe puzzle can be found in the annual cyclesof each year, which can bring a marked
change not only to the weather, but also thesurrounding investment landscape. As thetemperatures cool again in the fast approaching Autumn equinox (22nd September), ourseasonality analysis suggests a growing probability for equity markets, notably those withthe highest valuations, to be at risk of a major
fall in the (autumn) fall of 2016, during late
September/early October.

US equities sold off sharply on the opening
week of September, during Friday the 9th, withlarge cap markets such as the Dow, S&P500 &NASDAQ, breaking back under their previous
all-time highs (ATHs) at 18351, 2135 and 4816
respectively. This served as a classic bearish
volatility breakout, with the market previously exhibiting an unusual “calm before theIn fact, what the infamous market almanacs
have long cited as the seasonal pattern of“Sell-in-May-and-Go-Away” or SIM, actually
suffers its greatest downside risk during themonths of June and September (Fig 1). The
exact reasons for this general seasonal trading pattern are not known. Although, lower
trading volumes due to the summer vacation months and increased investment flows

during the winter months are traditionallyhighlighted as the discrepancy in performance of the overall SIM period between
May-October.
Looking back at this year, the equity markets
did partly follow the early stages of this pattern by triggering a sharp correction during the second half of June (approx. -5%),

which was further pressured by the mounting event risk of “Brexit”. However, US equity
markets launched a sharp relief-rally fromoversold conditions, into a marginal new
all-time high (ATH) territory. This price reaction was also in-line with the expected timing window of the mid-summer rally, whichtends to appear during the month of July
(Figure 1). Thereafter, the probabilities

Figure 1. SIM Seasonality pattern suffers its greatest downside risk in June and September

Source: RW Market Advisory, Market Analyst

IFTAUPDATE 2016 Volume 23 Issue 3

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Education Lounge
favoured a market peak/drawdown process
in the month of August.
Mr. Market should now lead us into the wellknown “Autumn (Q3) Fall-Crash cycle” thattraditionally unfolds between September
and October. Figure 2a illustrates the shapeof this seasonal pattern, which is based on
the average performance of over 100 yearsof back-tested price data on the Dow Jones
Industrial Average. These results tell us thelargest price fall can be expected in late
September, followed by a volatile rise/
whipsaw, then another fall in October,which traditionally marks the final capitulation “true low” in the market.

During the latest cyclical recovery since 2009,
there have several peak/drawdown periods inAugust (Figure 2b). The largest one occurred
beforehand, on 8th August 2008, whichmarked one of the final major peaks of the
Global Financial Crisis, triggering a drop of-34%. The second largest was an extended
drawdown timing window into early August
2011, with a net fall of -17%, which triggered aweek earlier on 22nd July.
More recently, our analysis had correctlypredicted the mini-crash of 2015, which suffered a price drop of -14% during the monthof August, pressured by the Chinese equity
market crash. Historically, one of the mostFigure 2. SIM Seasonality analysis bearish for (Autumn) fallinfamous seasonal anniversaries of this kind
was the peak of the 25th August 1987, and we
all know how that ended.

the market, having just broken the pre-2008
crisis record for number of days without a
20% correction.

Ultimately, this peak out in seasonality not
The four-year presidential election cycle serves
only marks the end of the shorter term midas an intermediate overlay, and this year issummer rally, but alsoa multitude of more Figure 3. Cyclical market forces led to 9 out of 11 of major stock market
powerful and larger corrections in the last 100 years (decennial and presidential cycles).
cycles. This analysis
100 years of major
Post Pre bull-mkt
Decennial (D)is primarily based on
Stockmarket
corrrections
crash
(rise
/duration)
Presidential (P)Robin Griffiths’ signature%
fall
CyclesRoadmap cycle schema,
-40%
+128%
(D)
7-yr of decade
which is driven by a 10-, Bankers panic+26months4- and 1-year cycle. The (1907)-86% +463%
most influential input is Wall Street crash+96 months
the 10-year cycle, also (1929)-60% +340%(D) 7-yr of decade
known as the or decen- The Fed mistake+57 months
nial cycle, which, accord- (1937)
ing to our studies, has led Post-war crash-30% +122%(D) 7-yr of decade+49 months
to nine out of eleven of (1947)
the major stock market “Flash crash”-28% +334%+150 months
corrections in the last (1962)
100 years (Figure 3). Two Energy crash-36% Sideways(D) 0-yr of decadeof the major corrections (1970)
were in years ending ‘0’, Oil crisis-48% +50%+31 months
and the remaining major- (1973)
ity in years ending ‘7’.
-27% Sideways(D) 0-yr of decadeInflation crisis(1980)
Equity markets tradition- Program trade crash-34% +232%(D) 7-yr of decade
ally suffer their biggest (1987)+61 months(P) Reagan 1988
drop in year 6–7 of the Tech crash-49% +220%(D) 0-yr of decade
decade, which presently (2000)+67 months(P) Clintontranslates to 2016–2017. Global financial crisis-57% +84%(D) 7-8 yr of decadeHere, we should also be (2007-08)+61 months(P) G.W. Bushalerted to the historically Pending crisis?
+184%(D) 6-7 yr of decade
overextended nature of (2016-2017?)+74 months(P) Obama







?

Source: The ECU Group, Multi-Asset Research & Advisory Team, Datastream, Market Analyst.

IFTAUPDATE 2016 Volume 23 Issue 3

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Education Lounge
no exception with the level of sheer politicaluncertainty ahead of the coming US electionsin November, less than 60 days away.
Although, it is true that in the run up to a US
presidential election, the market normallyrises and stays strong through the election
to give whoever wins a honeymoon period.
However, if the election is at the end of a

two-term president, they become a “lameduck”, thereby leading to a negative equity
market underperformance of -13.8% (Figure4b). This occurs as the incumbent president
runs out of time, with a lack of policy ammunition and in most cases diminishing popularity.
This year’s level of political and economic
uncertainty is mounting higher with a

Figure 4. Presidential and seasonal cycles, with bearish projected roadmap (Q3 2016)

rather polarized selection of US presidential candidates between Trump and Clinton.
Market risks are further amplified by the everwidening divergence of asset price inflation
vs. economic-business conditions, ahead of apending risk of Fed rate hikes (potentially on
the 20th or 21st of September) and a looming
Italian referendum that is set to trigger further
ammunition at EU unity. Against this uniquebackdrop of event risk, the triad of aforementioned cycles; decennial, presidential andseasonal, all support our bearish roadmap
prediction.

Until then, both price and time overlays continue to signal that bearish forces are clawing
away at this “greater fool” danger zone,
where the risk/reward remains highly asymmetric. At 89 months old, the resulting bear
skew will likely be much stronger this timearound. Indeed, to quote an adapted market
maxim, “the stronger the market trend, theharder the price fall”. It should come as no
surprise that when the Wall Street Bear starts
its stampede, investors from around the world
will be able to be feel the herded exit out of thestadium doors.

So far, the successful prediction was to begin
the year with a negative January, which was
one of the worst in over a decade, followed bya very strong rally from mid-February, into a
mid-April peak and a sharp move down intolate-June. There is now growing probability
for the infamous Autumn fall-crash cycleof September and October; just one monthahead of the ever-heated US presidential
elections. (Figure 4a)
Technically speaking, it remains important
to monitor the key equity market price confirmation for real evidence of trend direction.
Only a move above the following risk levels at
4945 (NASDAQ COMPOSITE), 2203/20 (S&P
500) and 18668 (DOW JONES INDUSTRIAL)
would either delay the timing, or alternatively,
a strong all-time high (ATH) breakout (signs ofa new bull-trend extension, marked by with alower swing low above the ATH) would cancel
the bearish perspective.
Source: The ECU Group, Multi-Asset Research & Advisory Team, Datastream, Market Analyst.

Select video image to review IG media interview: “Market’s Skewed to Volatility in late
September”

Disclaimer
No information published constitutes a solicitation, or offer, or recommendation, or advice,
to buy or sell any investment instrument, toeffect any transactions, or to conclude any
legal act of any kind whatsoever.

IFTAUPDATE 2016 Volume 23 Issue 3

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Education Lounge
The information published and opinions
expressed are provided by RW Advisory (RWA)
for personal use and for informational purposes only and are subject to change without
notice.
RW Advisory (RWA) makes no representations(either expressed or implied) that the information and opinions expressed are accurate,complete or up to date.
In particular, nothing contained constitutes
financial, legal, tax or other advice, nor should
any investment or any other decisions be madesolely based on the content.
All opinion is based on sources that RW
Advisory (RWA) believes to be reliable, but
it has no guarantees that this is the case.
Therefore, whilst every effort is made to ensurethat the content is accurate and complete, RWAdvisory (RWA) makes no such claim.

About the Author
Ron William, CMT, MSTA,
is an accomplished strategist, trader and educator.
Mr. William has 16 years offinancial industry experience, working for leading
economic research andinstitutional firms andproducing macro
research and trading strategies. He specializes
in macro, semi-discretionary analysis, driven
by cycles and proprietary timing models.

Mr. William’s work, most recently as part ofhis institutional market advisory firm (RWA),
acquired global industry recognition with the
2014/2013 Finalist Award for “Best Independent
Research House for FX” and 2012 Finalist Awardfor “Best Technical Analyst of the year”. His
market insights are featured regularly acrossnotable industry publications and financial
media programs.
He dedicated four years working at Bloomberg
L.P. as a senior technical analyst specialist,
responsible for training/consultation acrossthe EMEA region, and contributed to thedevelopment of charting strategies and thetechnical analysis platform of the Bloomberg
Professional Service™.

MFTA and CFTe Exam Dates
Certified Financial Technician (CFTe)—Level I
Date

Offered Year-roundSee our website for further instructions www.ifta.org/certifications/registration/
Syllabus and Study Guide http://www.ifta.org/public/files/publication-downloads/IFTA_CFTe_Syllabus.pdf

Certified Financial Technician (CFTe)—Level II
Date

20 Apr 2017

TBA October 2017

Registration deadline

3 March 201725 Aug 2017

Register at www.ifta.org/register/cfte2.php

Mr. William is a board member of IFTA, vicepresident and head of the Geneva Chapter of
the Swiss Association of Market Technicians,
and honorary member of the Egyptian Societyof Technical Analysts and holds both the MSTA
and CMT professional designations. He is
also co-founder of the SAMT CFTe Immersion
Course and a lecturer of STA diploma course
at the London School of Economics.

Syllabus and Study Guide http://www.ifta.org/public/files/publication-downloads/IFTA_CFTe_Syllabus.pdf
For more information on the CFTe program, visit http://www.ifta.org/certifications.

Master of Financial Technical Analysis (MFTA)
Alternative Path Pre-Application Deadline

28 Feb 201731 July 2017

Application/Outline Deadline

2 May 20172 Oct 2017

Paper Deadline

15 Oct 2017

15 Mar 2018

(Session 1) Register at www.ifta.org/register/mfta_alt_session1.php/(Session 2) Register at www.ifta.org/register/mfta_alt_session2.php/MFTA/IFTA Journal Style Guide

IFTAUPDATE 2016 Volume 23 Issue 3

page 242016 IFTA Board of Directors Nominations (Term October 2016–October 2019)
Nominations were received for seven open
positions on the IFTA board of directors.
Elections will be held at the Annual General
Meeting (AGM) on Thursday, October 20, 2016,
from 16:00 to 17:30 (4:00 pm–5:30 pm).

From September 2004 until January 2012,
Fowzy managed portfolios that are investedon the Saudi stock market. Since 2012, he has
worked as an independent full-time trader.

Gregor Bauer, Ph.D., CFTe
If you would like to contact any of the candidates, please email the IFTA staff at admin@
ifta.org, and we will be glad to facilitate yourcommunication.

Fowzy Alkoblan, CFTe, DipTA
Nominated by: ATAA (Australia)
Current Board Member: No
Fowzy Alkoblan worked
as a civil engineer at
Saline Water Conversion
Corporation—a company
that converts sea water
into potable water in
Saudi Arabia—from 1984
until 2012.
His journey with technical analysis started inAugust 2004 when he took a course on thebasic principles of technical analysis. After
that, Fowzy continued reading the well-known
technical analysis books and built my own WallStreet knowledge. In 2012, he was awarded
the diploma of the Australian Society (DIPL.
TA ATAA), which is equivalent to the CFTe, thefamous certificate of IFTA.

Nominated by: VTAD (Germany)
Current Board Member: Yes
Gregor Bauer works as
an independent asset
manager for private clients and companies inGermany. He is also thepresident of the German
Association of TechnicalAnalysts (www.VTAD.de).
Gregor authored two
books on technical analysis and covers a regular technical outlook on German TV. He also
writes articles for leading financial newspapers
on a regular basis. He is specialized in applying
advanced candlestick techniques in combination with traditional western techniques.
Gregor conducts lectures in portfolio management and technical analysis at various elite universities in Germany and Liechtenstein and runs
seminars and workshops on technical analysis
for institutional Investors. Together with a partner, he runs a very successful computer-based,medium-term ETF trading system, which is now
also open to institutional investors.

Gregor serves on the board of directors of IFTA
as a member of the Execution Committee, andin his capacity as exam management director, he oversees the exam administration andis responsible for structuring the exams. For
further information please visit: www.drbauerconsult.de or follow him on Facebook.

Italian history and was awarded IFTA’s John
Brooks Award® for the best MFTA paper. The
paper, “Technical Tools and Equity Selection:
A Reward/Risk Rating Indicator for the Stock
Market Components”, was also published in
the official 2010 IFTA Journal. In 2011, Francesco
entered the newly organized SIAT Awards forthe first time and won. He won again in 2015.

Francesco Caruso, MFTA
Nominated by: SIAT (Italy)
Current Board Member: No
Francesco Caruso graduated from Bocconi
University with a degreein economics. Since 1989,
as fund manager andchief of relevant
European financial organizations, he has focusedon the development oftrading systems and the application of technical and algorythmic analysis to asset management and asset allocation.
Fracesco has published books and articles for financial media and created manytechnical models and indicators, including
the Composite Momentum®. He is a twotime winner (1997 and 1998) of the international award, Leonardo d’Oro della Ricerca
Finanziaria®, in the technical analysis division. In 2008, he became the first MFTA in

Francesco has 30 years of experience in all
the fields of financial markets, from technical and quantitative analysis to trading, asset allocation, and asset management. He is a strategist, chief of financialarea, member of the board of directors,
CEO, and consultant for primary financialgroups (UBIBANCA, BANCA DEL SEMPIONE,
ARCA GROUP, RCF, MELIOBANCA, BANCA
INTERMOBILIARE, BANQUE MORVAL etc.),
He is currently a prominent financial blogger
and author of technical books and specialized articles, founder and owner of Market
Risk Management, and an Italian leader inindependent advisory. He is also an advisor
for banks and funds and is associate professor at the Cassino University in the Executive
Master’s degree in Quantitative and TechnicalAnalysis of the Financial Markets.
Francesco is vice president of SIAT, the ItalianTechnical Analysis Society, and president of
the Scientific Committee of the association.

IFTAUPDATE 2016 Volume 23 Issue 3

He has held many courses and conferenceson technical analysis and markets and has
already been an official speaker at IFTA 1998
(Rome) and IFTA 2006 (Lugano) and the SIAT
ambassador at the IFTA Annual Congress 2007.

Alek Jankowski, BE, M.Eng.Sc.,
Grad.Dip.Mgt.
Conference Director
Current Board Member: Yes
Alek Jankowski originallytrained as an electricalengineer (University of
New South Wales) andalso holds post-graduate degrees in industrial
engineering (operations
research) and management. Prior to retiringfrom full-time employment, Alek worked for
a Fortune 500 international corporation asgroup general manager, with responsibility
for several businesses in Australia, New
Zealand and Southeast Asia. During his
career, he worked for several international
corporations where he held senior executiveroles. He joined the ATAA some nine years
ago and since retirement, has taken an activerole within the organisation. Alek joined the
local Chapter Council in 2013 and then the
National Board in 2014. He was elected president in November 2015.
Alek has a keen interest in financial markets,with his current focus on the managementof his personal investment portfolio and thedevelopment of his own trading systems. He
has been instrumental in the development of alarge aged care facility in Sydney and has been
the finance director for some 15 years. He is

page 25

now the deputy chairman. An active Rotarianfor 32 years, he has served that organisation
at Club and District levels.

Takashi Nakamura, MFTA, MBA,
MA, CIIA, CMA, CFP, MRICS, CTP,
SMECA
Nominated by: NTAA (Japan)
Current Board Member: No
Takashi Nakamura is asenior strategist at TokaiTokyo Research Center,mainly focusing on theJapanese stock market,
including J-REIT utilizing
technical analysis in combination with fundamental approach and behavioral finance theory. Prior to his current
position, Takashi worked for both sell-side andbuy-side, Yamaichi Securities, Merrill Lynch
Japan Securities, Japan Investment Trust,
Sompo Japan Asset Management, and Okasan
Asset Management.
Takashi has more than 15 years of experiencein the field of financial markets. In his previous positions at the asset management companies he has served, he managed pension
fund and mutual fund portfolios as a fundmanager, investing in stocks (including REIT)
in developed countries; emerging markets(mainly focusing on Asian markets); and large-,
mid-, and small-cap funds; and employing
active quantitative investment strategies andbottom-up approach complemented by fundamental and technical analysis.
Takashi graduated from Keio University(Faculty of Business andCommerce). He received his MBA from the
University of Wales HABS and an M.A. inclinical psychology from Alliant International
University/California School of Professional
Psychology. He is a visiting professor at
Buckinghamshire New University.

IFTA’s board of directors. Jeanette is the authorof the Option Queen Letter, a weekly newsletter issued and published every Sunday. She isa member of ICE, COMEX, and CHX holdings,
and is also a member of the Adelphi University
Presidents Counsel.

Jeanette Schwarz Young
CFP®, CMT, M.S.

In 2007, her book The Options Doctor was published by John Wiley & Son. She placed third in
the globe in the National Investment Challenge
Pro Option’s Division in the mid-90s.

Current Board Member: Yes
Jeanette Schwarz Young
has been a Wall Street
professional since 1981,
when she began her professional career with
Thomson M c K innon
Securities. Her career
includes portfolio management, syndication,
option strategist, hedger, operations principal,
bond principal, pit trader, and general market
trader. Jeanette worked for the NYBOT (NewYork Board of Trade) and later ICE, where she
wrote, produced, and aired two daily market
reports covering the financials, currencies, andsofts, which include Frozen Concentrated
Orange Juice, Sugar, Cocoa, Coffee andCotton. She has been a frequent guest on FOX,
CNBC, Bloomberg, Yorba TV, CNN and others.
She was a market maker in the FINEX ring(Russell 2000 ring) and became an expert
hedger. As such, she has used this skill-set toprotect capital and make money.
Jeanette was the first director of the CMT program for the Market Technicians Associationand is the past president of American
Association of Professional Technical Analysts
and continues to serve on the board of directors. She is also a past and current member ofSimon Warren, FSTA
Nominated by: STA (UK)
Current Board Member: No
Simon Warren was headof investments at Bupa
for seven years, withresponsibility for £3.7bnof assets and £1.1bn ofdebt. Prior to that, he
was deputy treasurerand head of front officetrading, where he was responsible for alltransactional and FX hedging.
Simon is a fellow of the Association of Certified
Accountants and began his career at Bupa in
1987 as an accountant before moving over tothe treasury and investment areas, where heutilizes his technical analysis skills.
Simon has been treasurer of the STA since2003 and was also a director of IFTA for three
years, where he was chair of the FinanceCommittee.

IFTAUPDATE 2016 Volume 23 Issue 3

page 26IFTA Member Societies
AUSTRALIA—ATAA Australian Technical Analysts Association www.ataa.com.au
CANADA—CSTA Canadian Society of Technical Analysts www.csta.org
EGYPT—ESTA Egyptian Society of Technical Analysts www.estaegypt.org
FRANCE—AFATE Association Française des Analystes Techniques www.afate.com
GERMANY—VTAD Vereinigung der Technischer Analysten Deutschlands e.V. www.vtad.de
HONG KONG—FTAA* Financial Technical Analyst Association www.ftaa.org.hk
INDIA—ATA The Asociation of Technical Analysis www.taindia.org
INDONESIA—AATI Asosiasi Analis Teknikal Indonesia
ITALY—SIAT Società Italiana di Analisi Tecnica www.siat.org
JAPAN—NTAA Nippon Technical Analysts Association www.ntaa.org.jp
LEBANON—LSTA Lebanese Society of Technical Analysts www.lstalebanon.com
MALAYSIA—MATA* Malaysia Malaysian Association of Technical Analysts site.malaysianchartist.com
NIGERIA—TASN Technical Analysts Society, Nigeria www.tasnigeria.org
THE NETHERLANDS—DCTA Dutch Commission of Technical Analysis
NEW ZEALAND—STANZ Society of Technical Analysts of New Zealand www.stanz.co.nz
ROMANIA—AATROM Asociatia Analistilor Tehnici din Romania www.aatrom.org
SCANDINAVIA—STAF Skandinaviens Tekniska Analytikers Förening www.staf.nu
SINGAPORE—TASS Technical Analysts Society (Singapore) www.tass.org.sg
SPAIN—IEATEC Instituto Español de Analistsas Técnicos y Cuantitativos www.ieatec.es
SOUTH AFRICA—TASSA Technical Analysts Society of Southern Africa www.tassa.org.za
SWITZERLAND—SAMT Swiss Association of Market Technicians www.samt-org.ch
TUNISIA—ATAT* Association Tusisienne des Analystes Technique
UNITED KINGDOM—STA Society of Technical Analysts Ltd. www.sta-uk.org
USA—TSAASF Technical Securities Analysts Association www.tsaasf.org
USA—AAPTA American Association of Professional Technical Analysts www.aapta.com* Developing

IFTA Update Schedule
The IFTA Update is the quarterly electronic newsletter of the International Federation of Technical Analysts, reaching
more than 6,950 IFTA colleagues worldwide. The Update is an efficient and cost-effective way to communicate with
IFTA’s member societies and colleagues.

PUBLICATION SCHEDULE
December Issue

Education articles: November 15

All other content: December 1

March Issue

Education articles: February 15

All other content: March 1

June Issue

Education articles: May 15

All other content: June 1

September Issue

Education articles: August 15

All other content: September 1

Send education article submissions to newsletter@ifta.org. Send all other content to admin@ifta.org
For more information and to advertise, visit our website: www.ifta.org/publications/newsletter/

Board of Directors
President Mohamed El Saiid, CFTe, MFTA (ESTA)
Email: melsaiid@hc-si.com
Vice-President—the Americas Jeanette Schwarz-Young, CFP®, CMT, M.S. (AAPTA)
Email: optnqueen@aol.com
Vice-President—Asia Pacific, Conference Director Akira Homma, CFA, CIIA, CFTe, FRM, CMA, CMT (NTAA)
Email: akira.homma@ifta.org
Vice-President—Europe Thomas Hicks (STA)
Email: tom.hicks@live.co.uk
Vice-President—Middle East, Africa Mohamed Ashraf Mohfauz, MFTA, CFTe, CETA (ESTA)
Email: mohamed.ashraf.esta@gmail.com
Treasurer Karin Roller, CFTe (VTAD)
Email: karen.roller@ifta.org
Examination Director Gregor Bauer, Ph.D., CFTe (VTAD)
Email: gregor.bauer@vtad.de
Education Director Saleh Nasser, CMT (ESTA)
Email: saleh.nasser@pharosholding.com
Marketing and Membership Director Dan Valcu, CFTe (AATROM)
Email: ta@educofin.com
Journal and Newsletter Director Aurélia Gerber, MBA, CFA (SAMT)Email: aurelia.gerber@ifta.org
Development Director (Academic & Society Affairs) Carlos Jaurequizar (IEATEC)
Email: carlos.jaurequizar@noesis.es
Development Director Ron Williams, MSTA, CMT (SAMT)Email: ron.williams@samt.org.ch
Development Director (Asia-Pacific Affairs) Akihiro Niimi, MFTA (NTAA)
Email: niimia@aifaminc.com
Acting Conference Director Alek Jankowski (ATAA)
Email: alek.jankowski@ataa.asn.au

Staff
Executive Director Beth W. Palys, FASAE, CAE
Vice President, Meetings Grace L. Jan, CAE, CMP
Senior Member Services Manager Linda Bernetich, CAE
Marketing Manager Julie Hill
Senior Graphic Designer Jon BenjaminAccounting Dawn Rosenfeld
Editor Lynne Agoston

IFTA HEADQUARTERS
International Federation of Technical Analysts
9707 Key West Avenue, Suite 100
Rockville, MD 20850 USA

Phone: +1 240-404-6508
Fax: +1 301-990-9771
Email: admin@ifta.org