CMT Level II case studies

CMT Level II · Put your knowledge to work in context.

The Chartered Market Technician (CMT) Program is a three-level curriculum in technical analysis of financial markets, administered by CMT Association, leading to the CMT designation. CMT Association describes it as a rigorous program covering behavioral finance, risk management, and quantitative strategies, built on the analysis of statistical patterns in price, volume, and momentum. The CMT Level II case studies are 5 cases and about 2,757 words.

Breadth Divergence at an Index High: Distribution or Rotation?

It is mid-September and the S&P 500 prints a new 52-week high at 5,480, up 11% year to date. Over the same six weeks the cumulative NYSE advance-decline line has made a lower high, the share of S&P 500 members above their 50-day moving average has fallen from 78% to 54%, and equal-weight RSP has lagged cap-weighted SPY by 3.1 percentage points.

589 words, about 3 min 2

Failed Range Breakout on an Earnings Gap

XYZ Industrial has traded between 70 and 82.50 for eighteen months, with the 82.50 ceiling tested four times. On Tuesday it gaps up on an earnings surprise, trades to 84.60, and closes at 83.10, 0.7% above the line.

551 words, about 3 min 3

Crossover System Whipsaw in a Range Regime

You run a trend-following overlay on a diversified commodity ETF using a 20/50 EMA crossover, long-only, 100% notional, with 6 bps round-trip cost. From January last year through June this year the ETF has oscillated between 24 and 29 without a sustained trend.

550 words, about 3 min 4

Sentiment Washout: Capitulation or Just Oversold?

After a 9% three-week decline, VIX is 31 and VIX3M is 26, an inverted term structure. The CBOE equity put/call five-day average is 1.28, AAII bears are 51% versus bulls at 22%, and NAAIM exposure is 34.

516 words, about 3 min 5

Intermarket Non-Confirmation at an Equity High

The Nasdaq-100 makes an all-time high, but the copper/gold ratio has fallen 8% over eight weeks, high-yield option-adjusted spread has widened from 310 to 380 bp, the 2s10s curve has bear-flattened, and the dollar index has risen 3.5%. Semis are outperforming while banks and small caps lag.

551 words, about 3 min