Everything you need to pass Level II of the CMT Program
CMT Level II 2021: 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
Introduction ix
The CMT Association ix
The CMT Program x
The Level II Textbook xii
Section I Chart Development and Analysis 1
Chapter 1 Charts: Understanding Data Intervals 3
Julie R. Dahlquist, Ph.D., CMT
Chapter 2 Additional Charting Methods 12
Julie R. Dahlquist, Ph.D., CMT
Chapter 3 Moving Averages 21
Charles D. Kirkpatrick II and Julie R. Dahlquist
Chapter 4 Time-Based Trend Calculations 49
Perry J. Kaufman
Chapter 5 T rend Systems (Part 1) 64
Perry J. Kaufman
Chapter 6 T rend Systems (Part 2) 88
Perry J. Kaufman
Chapter 7 Momentum and Oscillators 106
Perry J. Kaufman
Chapter 8 Price Trends and Volume 147
Buff Dormeier, CMT
Chapter 09 Volume and Breadth 152
Perry J. Kaufman
Chapter 10 Bar Chart Patterns 178
Charles D. Kirkpatrick II and Julie R. Dahlquist
Chapter 11 Short-Term Patterns 211
Charles D. Kirkpatrick II and Julie R. Dahlquist
Chapter 12 Single Candle Lines 253
Steve Nison
Chapter 13 Multi-Candle Patterns 264
Steve Nison
Chapter 14 Candle Pattern Forecasting and Trading Techniques 279
Steve Nison
Chapter 15 Concepts in Cycle Theory 288
Kyle Crystal, CMT, CFTe
Chapter 16 Applied Cycle Analysis 299
Kyle Crystal, CMT, CFTe
Section II Measuring Volatility In Today’s Financial Markets 313
Chapter 17 Options 315
Michael Kahn, CMT
Chapter 18 Understanding Implied Volatility 323
Russell Rhoads
Chapter 19 About the VIX Index 335
Russell Rhoads
Section III Topics In Behavioral Finance 349
Chapter 20 Prospect Theory 351
Edwin T. Burton and Sunit N. Shah
Chapter 21 Perception Biases 358
Edwin T. Burton and Sunit N. Shah
Chapter 22 Inertial Effects 366
Edwin T. Burton and Sunit N. Shah
Chapter 23 Analyzing Sentiment in the Stock Market 375
Michael Carr, CMT, CFTe
Chapter 24 Analyzing Sentiment in Derivatives Markets 383
Michael Carr, CMT, CFTe
Section IV Statistical Applications For Technical Analysts 391
Chapter 25 Inferential Statistics 393
Jonas Elmerraji, CMT
Chapter 26 Correlation 409
Markos Katsanos
Chapter 27 Regression 423
Markos Katsanos
Chapter 28 Regression Analysis 429
Perry J. Kaufman
Section V Technical Methods and Market Selection 441
Chapter 29 Selection of Markets and Issues: Trading and Investing 443
Charles D. Kirkpatrick II and Julie R. Dahlquist
Chapter 30 Intermarket Analysis 469
Markos Katsanos
Chapter 31 Relative Strength Strategies for Investing 481
Mebane T. Faber
Chapter 32 A Stock Market Model 494
Ned Davis
Chapter 33 A Simple Model for Bonds 529
Ned Davis
Chapter 34 Perspectives on Active and Passive Money Management 536
Robert A. Weigand
Section VI Designing and Testing Technical Trading Systems 569
Chapter 35 The Statistics of Backtesting 571
Jonas Elmerraji, CMT
Chapter 36 The Scientific Method and Technical Analysis 581
David Aronson
Chapter 37 Theories of Nonrandom Price Motion 634
David Aronson
Chapter 38 Case Study of Rule Data Mining for the S&P 500 685
David Aronson
Chapter 39 System Design and Testing 732
Charles D. Kirkpatrick II and Julie R. Dahlquist
Index 760
