The Annual Award is issued to a person who made an outstanding contribution to the field of technical analysis. This year, Richard Donchian, a pioneer in the filed was recognized by the MTA. He is probably best known among market technicians for developing the fourweek rule. This trading strategy buys when prices reach a new four-week high and sells when prices reach a new four-week low. The system is always in the market, long or short.

Donchian had a very successful career, which is summarized in his biography at the web site of a charitable foundation he founded (http://www.foundationservices.cc/RDD2/aboutus.htm).

Richard Davoud Donchian was born in Hartford, Connecticut, in September, 1905, the son of Samuel B. Donchian and Armenouhi A. Davoud, both of whom migrated from the Armenian province of Turkey in the
1880’s. Richard attended public schools in Hartford, the Taft School in Watertown,

New techniques are always part of the MTA Symposium. Although Cloud Charts have been around for some time, they are still a relatively unknown technique, and the first exposure to the charts for many of the attendees was during David’s presentation. Ichimoku Clouds are based on principles first identified by traders in Japan in the 1930s.

To technicians, a picture is almost always worth a thousand words, and David understood his audience. He began with an example of a Cloud Chart and an explanation of what the chart showed.

SOURCE: WWW.CLOUDCHARTS.COM

Clouds are overlaid on price charts. The key components of the Could Chart are:

• Turning Line – midpoint of the high and low of the last 9 sessions.
• Standard Line – midpoint of the high and low of the last 26 sessions.
• Cloud Span

Editor’s Note: Julie Dahlquist, Ph.D, CMT, was recently named as the Editor of the MTA’s premier research publication. She provided the following comments:

I am excited to serve as the new Editor of the Journal of Technical Analysis. Since it was first published as the MTA Journal in 1978, the Journal has been the premier outlet for research relevant to the theory, practice, and application of
technical analysis. Many talented individuals have contributed to the success of the Journal, including the former editors, committee members, paper reviewers, and paper authors. Building on the work of these dedicated people, I am
eager to use my writing, publishing, and research experience to enhance the value of the Journal to the members of the MTA.

As the new Editor I am personally committed to the production of a journal that provides valuable information to the MTA membership through articles that are of interest and use

One of the most widely used tools in technical analysis is relative strength. The idea behind this technique is to identify individual stocks which are outperforming the general market. Numerous academic studies have shown that a portfolio comprised of stocks which have been market leaders for the past 3-12 months will usually outperform the market averages over the next 3-12 months. There are a number of ways to calculate relative strength, and practitioners apply the idea in a number of different ways.

Broad index analysis is another tool that technicians use to identify long-term trends in the stock market. To do this, a ratio of two indexes is charted, in effect creating a relative strength chart between the two indexes.

Louise Yamada, CMT, presents a detailed explanation of this idea in her 1998 book, “Market Magic.” She shows how the Capital/Consumer ratio could be used to help identify major stock market turning