Everything you need to pass Level II of the CMT Program
CMT Level II 2018: Theory and Analysis fully prepares you to demonstrate competency applying the principles covered in Level I, as well as the ability to apply more complex analytical techniques. Covered topics address theory and history, market indicators, construction, confirmation, cycles, selection and decision, system testing, and statistical analysis. The Level II exam emphasizes trend, chart, and pattern analysis, as well as risk management concepts.
This cornerstone guidebook of the Chartered Market Technician® Program will provide every advantage to passing Level II CMT Exam.
Table of Contents
About the CMT Association ix
What Is the CMT® Program? xi
How This Book Was Created xiii
Preface xv
SECTION I CHART DEVELOPMENT AND ANALYSIS 1
Chapter 1 Charting 3
Perry J. Kaufman
Chapter 2 Moving Averages 71
Charles D. Kirkpatrick II and Julie R. Dahlquist
Chapter 3 Time–Based Trend Calculations 99
Perry J. Kaufman
CHAPTER 4 T rend Systems (Part 1) 114
Perry J. Kaufman
CHAPTER 5 T rend Systems (Part 2) 138
Perry J. Kaufman
CHAPTER 6 Momentum and Oscillators 156
Perry J. Kaufman
Chapter 7 Volume, Open Interest, and Breadth 197
Perry J. Kaufman
Chapter 8 Bar Chart Patterns 234
Charles D. Kirkpatrick II and Julie R. Dahlquist
Chapter 9 Short–Term Patterns 267
Charles D. Kirkpatrick II and Julie R. Dahlquist
Chapter 10 Single Candle Lines 309
Steve Nison
Chapter 11 Multi–Candle Patterns 320
Steve Nison
Chapter 12 Forecasting and Trading Techniques 335
Steve Nison
SECTION II RISK MANAGEMENT 345
Chapter 13 Option Pricing Basics 347
Edwin J. Elton, Martin J. Gruber, Stephen J. Brown, and William N. Goetzmann
Chapter 14 Understanding Implied Volatility 361
Russell Rhoads
Chapter 15 About the VIX Index 373
Russell Rhoads
SECTION III TECHNICAL INVESTMENT STRATEGIES 387
Chapter 16 Selection of Markets and Issues: Trading and Investing 389
Charles D. Kirkpatrick II and Julie R. Dahlquist
Chapter 17 Intermarket Analysis 415
Markos Katsanos
Chapter 18 Cycle Analysis 427
Perry J. Kaufman
Chapter 19 Relative Strength Strategies for Investing 448
Mebane T. Faber
Chapter 20 A Stock Market Model 461
Ned Davis and Loren Flath
Chapter 21 A Simple Model for Bonds 496
Ned Davis and Loren Flath
Chapter 22 Perspectives on Active and Passive Money Management 503
Robert A. Weigand
SECTION IV MARKETS 535
Chapter 23 Prospect Theory 537
Edwin T. Burton and Sunit N. Shah
Chapter 24 Perception Biases 544
Edwin T. Burton and Sunit N. Shah
Chapter 25 Inertial Effects 552
Edwin T. Burton and Sunit N. Shah
SECTION V STATISTICAL ANALYSIS AND SYSTEM DEVELOPMENT 561
Chapter 26 Correlation 563
Markos Katsanos
Chapter 27 Regression 577
Markos Katsanos
Chapter 28 Regression Analysis 583
Perry J. Kaufman
Chapter 29 The Scientific Method and Technical Analysis 595
David Aronson
Chapter 30 Theories of Nonrandom Price Motion 648
David Aronson
Chapter 31 Case Study of Rule Data Mining for the S&P 500 699
David Aronson
Chapter 32 System Design and Testing 746
Charles D. Kirkpatrick II and Julie R. Dahlquist
