1. Let Charts Help You Become a Better Investor Michael Kahn, CMT November 2013

2. Who am I? Chartered Market Technician (CMT) trained and certified in market analysis trained and certified in market analysis Columnist – Barron's Online Newsletter Editor – Quick Takes Pro Former charting software designer …and beaten up enough by the markets

3. What do I do? Help investors assess risk and reward. no crystal ball no tea leaves no chicken entrails

4. Agenda Just the basics Just the basics When the market is moving - trend When the market is moving - trend When the market is resting - pattern When the market is resting - pattern Other important stuff – volume, sentiment, time Other important stuff – volume, sentiment, time.

5. Possible Goals Get the feel for the market Get the feel for the market What does the market say? What does the market say? Bullish? Bullish? Manic? Manic? Does the chart agree with the fundamentals? Does the chart agree with the fundamentals? Or at least not disagree? Or at least not disagree? Intangibles Intangibles The Fed The Fed Gurus Gurus “Risk on” “Risk on”

6. Possible Goals What part of the market is best? What part of the market is best? Size Size big or small big or small Sectors Sectors Defensive or aggressive? Defensive or aggressive? Traditional leaders or not? Traditional leaders or not? Bonds? Bonds? Maybe it is time to diversify asset classes Maybe it is time to diversify asset classes

7. Technical analysis is a windsock, not a crystal ball. - Carl Swenlin

8. People People tend to do similar things when faced with similar situations. People tend to do similar things when faced with similar situations. People’s behavior is the basis for chart patterns. People’s behavior is the basis for chart patterns. Interpreting those patterns in 2013 is different than it was in 2003 and 1993. Interpreting those patterns in 2013 is different than it was in 2003 and 1993.

9. What is Fundamental Analysis? A method of evaluating a security that entails attempting to measure its intrinsic value by examining related economic, financial and other qualitative and quantitative factors. -- from the CFA Institute website (and Investopedia)

10. What is Technical Analysis? A method of evaluating securities by analyzing statistics generated by market activity. -- from the Market Technicians Association website

11. What do they have in common? Neither one can handle conditions that cause the market to be restricted, manipulated and otherwise not free. Fraud Fraud Mergers Mergers Quantitative Easing Quantitative Easing

12. Save us Obi Ben Bernanke

13. I will make you a chart you cannot refuse The Godfather of Technical Analysis

14. Price Rules! Price - The stuff you put in the bank Price - The stuff you put in the bank In price, there is knowledge. Alan Shaw, CMT, Chief Technical Analyst. Smith Barney, retired Ralph Acampora, CMT, Chief Technical Analyst, Prudential Securities, retired

15. Volume is next Volume – How much money is moving Volume – How much money is moving In volume, there is truth. Dennis Jarrett, Jarrett Research

16. Momentum Momentum – How fast it got there Momentum – How fast it got there Which speed is profitable and most sustainable?

17. Structure (Patterns) Structure – Trends and Patterns Structure – Trends and Patterns

18. Sentiment (Fear and Greed) Sentiment Sentiment I feel good! Whatever She’s gonna eat us! Tesla Oct 2013 Electronic Arts Jul 2012

19. We got game! Price Price Volume Volume Momentum Momentum Structure Structure Sentiment Sentiment

20. Looks like a cheaper place to buy How many times have you thought, “My stock is on sale, let’s buy!”

21. Looks like a cheaper place to buy Same price, different trend

22. The trend said it all It works in both directions.

23. What does the market have to say?

24. The trend said it all It works in long-term time frames at major turning points, too.

25. Does something look right here? The Big Picture a few years ago.

26. And today… Log scales

27. Leadership Changing? Barron’s Online last week

28. Leadership

29. Leadership

30. It’s the end of the world as we know it. – R.E.M. Sentiment

31. Sentiment Are you the last to be invited to the party? Are you the last to be invited to the party? social media stocks? social media stocks? Is your hair stylist giving you tips? Is your hair stylist giving you tips? Are they ridiculing the bearish commentators? Are they ridiculing the bearish commentators? Or for early 2009, were doom and gloom forever? Or for early 2009, were doom and gloom forever?

32. Quiz Time Question - What does it mean when the neighborhood tavern has CNBC on the television and not ESPN? Question - What does it mean when the neighborhood tavern has CNBC on the television and not ESPN?

33. Quiz Time Question - What does it mean when the neighborhood tavern has CNBC on the television and not ESPN? Question - What does it mean when the neighborhood tavern has CNBC on the television and not ESPN? Answer - the market is not at a bottom Answer - the market is not at a bottom

34. Quiz Time Question - What does it mean when the banks are offering new interest only mortgages? Question - What does it mean when the banks are offering new interest only mortgages?

35. Quiz Time Question - What does it mean when the banks are offering new interest only mortgages? Question - What does it mean when the banks are offering new interest only mortgages? Answer – the real estate market is not at a bottom……(sound familiar?) Answer – the real estate market is not at a bottom……(sound familiar?)

36. Quiz Time Question - What does it mean when there are whole aisles in the supermarket dedicated to the Atkins diet? Question - What does it mean when there are whole aisles in the supermarket dedicated to the Atkins diet?

37. Quiz Time Question - What does it mean when there are whole aisles in the supermarket dedicated to the Atkins diet? Question - What does it mean when there are whole aisles in the supermarket dedicated to the Atkins diet? Answer – time to buy bread and cereal stocks Answer – time to buy bread and cereal stocks

38. Quiz Time Question - What does it mean when everyone is talking about the Great Depression and Financial Armageddon? Question - What does it mean when everyone is talking about the Great Depression and Financial Armageddon?

39. Quiz Time Question - What does it mean when everyone is talking about the Great Depression and Financial Armageddon? Question - What does it mean when everyone is talking about the Great Depression and Financial Armageddon? Answer – It’s March 2009! Answer – It’s March 2009! The AAII survey showed 70.27% bears on March 5. Unprecedented. And it was not the only one. The AAII survey showed 70.27% bears on March 5. Unprecedented. And it was not the only one.

40. Quiz Time Question – What does it mean when, after a five-year bull market, mutual fund company advertisements show regular people saying “we’ve got to get back into the market?” Question – What does it mean when, after a five-year bull market, mutual fund company advertisements show regular people saying “we’ve got to get back into the market?”

41. Quiz Time Question – What does it mean when, after a five-year bull market, mutual fund company advertisements show regular people saying “we’ve got to get back into the market? Question – What does it mean when, after a five-year bull market, mutual fund company advertisements show regular people saying “we’ve got to get back into the market? Somebody is about to get burned again. Somebody is about to get burned again.

42. Up is good, down is bad. Nice long-term base

43. What do you see?

44. How about this?

45. or this?

46. There was no need to lose it all.

47. real trading!

48. If you don’t see anything, it’s not there.

49. Up is good, down is bad.

51. The Real World Right Now

53. Up is good, Down is Bad

54. The real reason we do this: To make the buy, sell or hold decision. Not to predict the future

55. The Big Question Does market analysis work anymore? Yes! (mostly)

56. The Real World Right Now

63. End with some laughs An ode to Quantitative Easing

64. Ben Lightyear. QE to infinity and beyond!

65. Have another shot of Bernanke juice.

66. Ben Bernanke as a child

67. Quick Takes Prowww.QuickTakesPro.com www.QuickTakesPro.com Getting Technicalwww.Barrons.com www.Barrons.com Books: Beginner’s Guide to Charting Financial Markets On sale at the conference bookseller Technical Analysis: Plain and Simple – 3 nd edition Real World Technical Analysis

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