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Sample Questions for CMT Level I

1. Cycles are most likely measured a. low to low. b. low to high. c. high to low. d. high to high. 2. Which of the following is the most important aspect of a cycle in studying the relationship between cycles of different lengths? a. Phase b. Period c. Amplitude 3. With regard to cycle analysis, translation is best described as a. the distance between peaks. b. the distance between troughs. c. to the left when the peak is beyond the halfway point. d. useful in checking where the trend direction is headed or if it is changing. 4. A complete Elliott Wave cycle is composed of how many subwaves? a. 3 b. 5 c. 8 d. 13 5. In a normal 5-wave Elliott upward motive impulse wave, which wave is most likely the longest and most dynamic? a. First b. Fifth c. Third 6. When analyzing long-term price movements with considerable volatility it is most appropriate to use a chart with which type of scale? a. Arithmetic b. Geometric c. Logarithmic 7. Which of the following would LEAST likely be a continuation pattern? a. Flag b. Ascending triangle c. Broadening formation d. Inverse head and shoulders

8. According to Dow Theory, secondary corrections can most likely be replaced by a a. flag. b. line. c. wedge. d. triangle. 9. Which of the following would be the LEAST important factor in determining the significance of a trendline? a. Duration b. Angle of ascent or descent c. Distance from current price d. Number of times touched by prices 10. What is most likely indicated when Bollinger Bands narrow? a. A stock is ready for a rally. b. A stock is ready for a decline. c. A stocks volatility has increased. d. A stocks volatility has decreased. 11. Which of the following is NOT true about gaps? a. Gaps are always filled. b. Common gaps are typically of no consequence. c. Upward breakaway gaps usually are accompanied by heavy volume. d. Exhaustion gaps are seen at the end of a move and signal a potential trend reversal. 12. Which of the following does NOT represent a sell signal confirmation for Dow Theory? a. The Dow Jones Industrials and the Dow Jones Transportation indexes peak simultaneously. b. The Dow Jones Industrials and the Dow Jones Transportation indexes fail to confirm at the highs. c. Both the Dow Jones Industrials and the Dow Jones Transportation indexes break below an important intermediate term support level. 13. Dow Theory uses a. low prices. b. high prices. c. closing prices. d. average daily prices. 14. Point and figure charts are LEAST likely suited for a. establishing targets. b. identifying breakouts. c. identifying areas of support and resistance. d. identifying areas of accumulation or distribution.

15. Which of the following is a Fibonacci ratio used in retracement? a. 33% b. 50% c. 66% d. 75% 16. Using moving averages to signal buy/sell decisions can result in a number of whipsaws in a. up trending markets. b. down trending markets. c. sideways trending markets. 17. A stock trades in a range between 51 and 55 for ten days and then moves higher. If you had been charting the stock with a three-box reversal point and figure chart, with two points assigned per box, what would the horizontal count be? a. 10 points b. 30 points c. 60 points d. There would be no horizontal count. 18. Which of the following is usually associated with major market tops? a. A pennant pattern b. Ascending triangles c. An extended third wave d. A broadening formation 19. In Dow Theory, the length of a secondary trend most likely is a. less than three weeks. b. more than three months. c. three weeks to three months. 20. As a general rule, in rectangle, triangle, flag and pennant patterns, volume most likely a. increases as the pattern nears completion. b. decreases as the pattern nears completion. c. remains fairly consistent as the pattern nears completion. 21. Which of the following types of gaps is LEAST likely to be filled when it occurs with high volume? a. Common b. Runaway c. Breakaway d. Exhaustion 22. Trends are more likely to persist than reverse in

a. no markets. b. all markets. c. bull markets only. d. bear markets only. 23. Which of the following is NOT an important use for an oscillator? a. Providing a trading signal in the direction of the price trend when it crosses zero. b. Providing a warning when the oscillator and price are diverging and the oscillator is at an extreme. c. Providing a method of evaluating the performance of a security relative to another security or index. d. Determining when overbought or oversold conditions exist when the oscillator reaches an extreme reading near the upper or lower end of its boundaries. 24. Which of the following is characteristic of trends? a. Trends are straight lines. b. Trends tend to reverse rather than continue. c. Any trend is influenced by its next longer and next shorter trend. 25. The Directional Movement Indicator (DMI) can be described as two a. moving averages of the lows. b. moving averages of the highs. c. lines tracking higher highs and lower lows to determine trend. d. lines placed two standard deviations above or below a moving average. 26. Regarding trends, which of the following statements is NOT correct? a. Always trade with the trend. b. A trendline break is at least a warning of a changing trend. c. Breakouts from support/resistance are usually a change in trend. d. The longer the trend, the more difficult it is to identify its reversal. 27. To increase the sensitivity of a 5x3 point and figure chart, one would a. increase the box size. b. decrease the box size. c. increase the number of boxes needed for a reversal. 28. In point and figure charting, the ability to obtain price objectives through the use of horizontal count is a principal advantage of the a. one-box reversal chart. b. five-box reversal chart. c. three-box reversal chart. 29. Which of the following patterns are found on point and figure charts? a. Doji

b. Island reversal c. Head and shoulders 30. Using intraday 1x1 point and figure charts, the most significant breakout is from a a. 5 column congestion zone. b. 10 column congestion zone. c. 15 column congestion zone. 31. An analyst is updating one-box reversal point and figure charts ($1 box size) and the current column contains 4 Xs. The most recent posting is $40. The stock closed yesterday at $40.50, opened today at $40.60, went up to $40.95, and closed at the low for the day at $39.11. How many NEW postings should the analyst make on the chart to reflect todays trading? a. 0 b. 1 c. 2 d. 3 32. Which of the following is characteristic of a logarithmic scale for a chart? a. They are typically used in intraday charts. b. They are preferred over arithmetic scaling for long-term trend analysis. c. The vertical price scale shows an equal distance for each dollar price change. 33. An analyst is updating 5x3 point and figure charts. The most recent posting is $175. The stock began trading today at $175.55, went up to $177.88, and closed at the low for the day at $161.23. How many postings should the analyst make on the chart to reflect todays trading? a. 0 b. 1 c. 2 d. 7 34. An inverse head and shoulders pattern is a. a topping pattern. b. a reversal pattern. c. generally unreliable. 35. Which of the following is NOT an advantage of trading futures contracts relative to trading stocks? a. They are leveraged. b. They have limit days. c. They have a favorable tax benefits. 36. Which of the following statements is NOT correct? An equally-weighted average a. is a dollar weighted average.

b is also called an unweighted average. c. is the methodology used to construct the S&P 500 Index. d. most closely represents how the typical investor goes about organizing a portfolio. 37. Symmetrical triangles a. are also called coils. b. are usually broadening patterns. c. represent the acceleration of an existing trend. 38. The simple moving average a. gives equal weight to each periods price. b. includes all of the data in the life of the instrument. c. gives greater weight to the more recent periods price. 39. Which of the following regarding moving averages is NOT correct? Moving averages a. follow the trend. b. lead market action. c. are smoothing devices. 40. The most commonly used price to calculate a moving average is the a. low. b. high. c. close. d. midpoint. 41. Which of the following statements regarding moving averages is NOT correct? Longer term moving averages a. give fewer buy and sell signals than shorter term moving averages. b. are better at giving signals at major tops than shorter term moving averages. c. give back a lot more when the trend reverses than shorter term moving averages. 42. A moving average a. is a smoothing device. b. enables the analyst to predict precise price targets. c. enables the analyst to predict precise time and price targets. 43. When compared to longer term moving averages, shorter term moving averages a. produce more trades. b. produce fewer whipsaws. c. are less likely to falsely indicate a trend change. 44. Volume in a head and shoulders pattern is usually highest

a. at the top of the head. b. at the completion of the head. c. during the formation of the left shoulder. d. during the formation of the right shoulder. 45. Symmetrical triangle price patterns should generally be accompanied by a. consistent volume within the pattern. b. a gradual decline in volume until the breakout. c. heavier volume in the direction of the eventual breakout. d. no discernible difference in volume until after the breakout occurs. 46. Open interest is the a. number of futures contracts outstanding in all delivery months. b. number of futures contracts outstanding at any one time in each delivery month. c. largest number of futures contracts outstanding at any one time for a particular security. 47. A candlestick with identical, or nearly identical, opening and closing prices is a a. doji. b. spinning top. c. morning star. d. neutral cloud. 48. The primary use of a candlestick pattern is to a. determine if a market is in a bull or bear market. b. define the primary, intermediate, and short-term trends. c. identify indications of both reversal and continuation patterns. d. define the intermediate and short-term trends, but not the primary trend. 49. All of the following are momentum oscillators EXCEPT the a. stochastic oscillator. b. advance/decline line. c. relative strength index (RSI). d. Moving Average Convergence-Divergence (MACD). 50. Which of the following can be used in conjunction with candlestick analysis to improve results? a. Using cycles to confirm a candle pattern. b. Using western techniques to confirm a candle pattern. c. Accepting only those patterns that are confirmed by the intermediate trend. 51. Which of the following statements is correct? a. Long-term charts are meant for trading purposes. b. Triangles do not appear in long-term charts because of their very short nature.

c. The proper order to follow in chart analysis is to begin with the long range and gradually work to the near term in order to gain perspective. 52. For a futures contract, daily volume refers to the a. open interest at the end of the day. b. cumulative price change for the day. c. number of contracts traded during the day. d. dollar amount of the contracts traded for the day. 53. The objective of Dow Theory is to determine a. the timing of market bottoms. b. changes in market psychology. c. the likelihood of volume reversals. d. the primary direction of the stock market. 54. A point and figure chart a. ignores time and volume. b. shows opening and closing prices. c. cannot be used to project price targets. d. provides a clear picture of volume distribution. 55. The concept of Relative Strength (RS) measures the relationship between a. two securities. b. volume changes and price changes. c. buying pressure and selling pressure. d. a stocks own price movement during the past 14 periods. 56. The resistance level of a price trend refers to the a. boundaries of the trading range of the trend. b. level where buying interest is sufficiently strong to overcome selling pressure. c. level where selling pressure is sufficiently strong to overcome buying pressure. 57. The advance-decline line is used to indicate a. market breadth. b. price momentum. c. volume momentum. d. a moving average crossover point. 58. The Kondratieff Wave extends for a period of approximately a. 13 years. b. 54 years. c. 13 weeks.

d. 54 weeks. 59. The target for a rectangle can be calculated by a. adding the height of the formation to the breakout price. b. using the width of the rectangle multiplied by the duration of the move. c. using the number of times the resistance/support were touched multiplied by the width of the formation. 60. Moving average crossovers can be used to indicate a. trend divergence. b. buy and sell signals. c. positive relative strength. 61. Which of the following is NOT considered a sentiment indicator? a. Advance-decline line b. Specialist short sales ratio c. Mutual fund cash as a percentage of assets d. Ratio of the premium paid for calls versus the premium paid for puts 62. Which of the following is NOT correct regarding speed resistance lines? a. They divide a trend into thirds. b. They are used to measure percentage retracements. c. They measure the rate of ascent or descent of a trend. d. They measure rallies and declines using only closing prices. 63. An exhaustion gap is associated with a. light trading volume. b. the beginning stage of a bear market. c. the terminal phase of a rapid advance or decline. d. an extended period of sideways movement in price. 64. Which of the following statements regarding point and figure charts and bar charts is correct? a. Period volume is clearly shown on a point and figure chart. b. Time intervals are clearly shown on a point and figure chart. c. Bar charts do not show the closing price for each time interval. d. A new plot on a point and figure chart is made only when the price changes by a given amount. 65. Point and figure charts display a. volume data. b. time on the horizontal axis. c. high, low and closing prices. d. sequential reversals of price in unit increments.

66. In constructing a point and figure chart, a new entry is added only when the a. price has moved to a new high or low. b. volume confirms the price movement. c. price has moved by equal to or more than the specified box size. 67. As the price unit of a reversal on a point and figure chart is decreased a. the possibility of whipsaws decreases. b. time analysis becomes more critical for interpretation. c. the sensitivity of price movement graphically displayed is increased. 68. Which chart type is more commonly used for displaying relative strength between a stock and the market? a. Bar b. Line c. Candlestick d. Point and figure 69. The body of the candlestick line displays the relationship between the current sessions a. high price and low price. b. opening price and high price. c. opening price and closing price. d. closing price and the prior sessions closing price. 70. A shaded real body in candlestick charting means that the a. opening price is higher than the low price. b. closing price is lower than the opening price. c. closing price is higher than the opening price. d. current sessions close is lower than the prior sessions close. 71. An important use of a trendline is to a. provide a signal of a reversal in trend. b. determine overbought or oversold market conditions. c. identify the cyclical interval between bull and bear markets. d. identify a price target for the extent of the price movement. 72. With respect to trend analysis, technical analysts believe that a. trading volume is irrelevant. b. retracements should be ignored. c. trendlines are not helpful in gauging support and resistance points. d. the more times a trendline has been successfully tested, the greater the significance of its violation.

73. In a head and shoulders pattern, volume generally is a. heaviest around the neckline. b. light as prices approach the peak. c. consistent throughout the pattern. d. heaviest during the formation of the left shoulder. 74. The parameters of a cycle are a. price, volume and flow. b. length, width and breadth. c. form, perimeter and wave. d. amplitude, period and phase. 75. A simple moving average is often criticized because a. it involves a complex calculation. b. the most recent events are given extra weight. c. the entire price series is used in its calculation. d. equal weight is given to each point included in the calculation. 76. An exponentially smoothed moving average a. suffers from the drop-off effect. b. cannot be plotted on a bar chart. c. excludes older price points in the calculation. d. gives more weight to more recent observations. 77. A sell signal is normally given when a a. shorter length moving average remains above a longer length moving average. b. longer length moving average remains above a shorter length moving average. c. shorter length moving average crosses a longer length moving average from above. d. longer length moving average crosses a shorter length moving average from above. 78. Oscillators are used to alert the analyst to a. volume divergences. b. continuation patterns. c. extended rallies and corrections. d. overbought or oversold conditions. 79. Oscillators are most useful when prices are a. sharply rising. b. sharply falling. c. in a trading range. 80. Violated support levels typically

a. indicate an imminent price reversal. b. become support levels as prices fall lower. c. become resistance levels on price bounces. d. are associated with declining price projections. 81. As with trendlines, speed resistance lines a. must be confirmed with volume. b. reverse roles once they are violated. c. indicate the potential for immediate price reversals. d. may be used in conjunction with sentiment indicators. 82. A rising relative strength (RS) line for a stock in a falling market indicates that a. the stock is outperforming the market. b. the stock is underperforming the market. c. price and volume for the stock are diverging. d. the stocks price is rising despite the falling market. 83. Which indicators would be most helpful in analyzing trading range markets? a. Cycles b. Oscillators c. Elliott Wave d. Moving averages 84. Which of the following is NOT used to measure market breadth? a. Sell/buy ratio b. Plurality index c. McClellan Oscillator d. Advance-decline line 85. Rising relative strength (RS) indicates a. positive price momentum. b. lack of investor conviction. c. the market is performing better than the security. d. the security is performing better than the market or the entity being compared. 86. Which of the following is NOT an underlying assumption of technical analysis? a. Markets trend b. Investors act rationally c. Price discounts everything d. Price is determined by the interaction of supply and demand 87. When Bollinger Bands contract it means that

a. volatility has increased. b. a stock is ready to rally. c. volatility has decreased. d. a stock is ready to decline. 88. Which of the following bar chart patterns are LEAST useful? a. Wedges b. Pennants c. Triangles d. Broadening formations 89. Which of the following is NOT characteristic of a doji pattern? a. It is often a warning of reversal. b. It is an effective pattern based upon percent winners. c. The opening and closing prices are identical or nearly identical. d. It suggests the market is in equilibrium and affected by indecision. 90. Which of the following statements about gaps is NOT correct? a. The most profitable gaps are opening gaps. b. Common gaps are of little or no consequence. c. Upward breakaway gaps usually occur on heavy volume. d. Exhaustion gaps occur at the end of a move and signal a trend reversal. 91. Which of the following would most likely be a continuation pattern? a. Flag b. Double bottom c. Engulfing pattern d. Head and shoulders 92. An extreme overbought reading on a momentum indicator in the early stages of a rally a. shows that the market is ready to correct. b. indicates that the rally is strong and will probably carry further. c. is a clear indication that the pace of the rally is about to accelerate. d. is a clear indication that the pace of the rally is about to slow down. 93. Which type of chart is usually considered best suited for establishing price targets based on a horizontal measurement? a. Line charts b. Daily bar charts c. Candlestick charts d. Point and figure charts

94. The theory of contrary investing is based upon the assumption that a. individual investors are always wrong. b. traders are often most bearish at market tops. c. institutional investors have access to better information. d. it is at turning points that the majority gets things wrong. 95. Which of the following is the most comprehensive index? a. Value Line Index b. Wilshire 5000 Equity Index c. NY Stock Exchange Composite Index d. Standard & Poors 500 Composite Index 96. The longest term cycle recognized in technical analysis is the a. Bachelier cycle. b. Decennial cycle. c. Kondratieff cycle. d. Presidential cycle. 97. The January Effect refers to a seasonal tendency in which a. returns for the year tend to be positive when January returns are positive. b. returns for the year tend to be negative when January returns are positive. c. large capitalization stocks outperform small capitalization stocks in January. d. small capitalization stocks outperform large capitalization stocks in January. 98. Which of the following is NOT considered a sentiment indicator? a. Put/call ratio b. Brokerage firm hiring c. Consumer Confidence Index d. Relative strength index (RSI) 99. Equivolume charting is best described as a a. variation of candlestick charting. b. variation of the McClellan Oscillator. c. bar chart when the bars vary in width determined by volume. d. technique that compares market performance on days with equal volume. 100. Which of the following is NOT characteristic of on-balance volume (OBV)? a. It is an oscillator. b. It is plotted on a bar chart. c. The volume for the day is added in when the price rises and is subtracted when the price falls. d. It is interpreted by comparing it to the price using divergences, trendline breaks and price patterns to point out underlying strength or weakness.

101. Which of the following is NOT correct regarding point and figure charting? a. It has no time factor. b. It has no volume factor. c. It requires a continuous price flow. d. Due to the complexity in their creation, it has only come into common usage since the advent of computers. 102. Horace Jain, CMT, was recently convicted of embezzling funds from a local non-profit organization where he volunteers his time. When he was first charged, an article appeared in the local paper and identified Jain as a CMT charterholder. In the article, Jain was quoted as saying all charges are false, and my accuser, Richard Smith, is simply out to get me. With respect to the MTA Code of Ethics, Jains actions a. are not in violation. b. violate the standard against disparaging others. c. violate the standard against misuse of the CMT designation by disclosing his status as a CMT charterholder. d. violate the standard with respect to maintaining the highest standards of professional competence, integrity and judgment. 103. Jacobi Giovanni, CMT, has a private wealth management firm and is soliciting new clients. In a meeting with a potential client, Giovanni says I promise that if you select me to manage your money I will work as hard as I can to put together and manage an appropriate portfolio considering your unique circumstances, goals and objectives. With respect to the MTA Code of Ethics, Giovannis actions a. are not in violation. b. are in violation as the statement is inaccurate and misleading. c. are in violation as Members and Affiliates cannot make any promises when soliciting clients. d. are in violation as the Code prohibits taking into account an individuals unique circumstances. 104. Noel Martinelli, a CMT Level I candidate, recommended the purchase of the stock of the New Brewing Company. In his technical analysis report he stated that The last five times the Paraco National Soccer team has been victorious in an international match, New Brewing Company stock has risen significantly in price. Because Paraco defeated Uraco last weekend in an international match, I am recommending the stock. With respect to the MTA Code of Ethics, Martenellis actions are a. not in violation. b. in violation as the statement is inaccurate. c. not in violation, as he is only a Level 1 candidate and is not bound by the Code. d. in violation as the analysis is not considered reasonable in field of technical analysis. 105. Alex Chacko, a CMT Level I candidate, was being interviewed on a local radio show. Chacko was very bullish about the equity market based on applying the basic principles of Dow Theory. A prominent fundamental analyst who was also on the radio show stated that based on his analysis, the outlook for the equity market was bearish. Chacko responded to the remarks of the fundamental analyst by stating that The fundamentals simply dont matter. Anyone who looks at fundamentals over technical signals deserves the losses they will receive. With respect to the MTA Code of Ethics, Chackos actions are

a. not in violation, as he is only a Level 1 candidate and is not bound by the Code. b. not in violation of the Code because the statements were not in published form. c. in violation of the Code in terms of disparaging the work of the fundamental analyst. d. in violation of the Code in terms of not keeping current with developments in major analytical fields. 106. Ishmael Tariq, CMT, is out to lunch at a restaurant close to the headquarters of the Simon Engineering Company. He overhears the management of Simon talking about the negative article on Simon that appeared in the local newspaper that morning. Tariq reads the article at lunch and calls his assistant and instructs her to sell the Simon stock holdings from the mutual fund he manages. Two weeks later, the stock price of Simon was down 50% from the time Tariq sold the holdings. With respect to the MTA Code of Ethics, Tariqs actions a. are not in violation of the Code. b. violate the Code with respect to acting on the basis of inside information. c. are not in violation of the Code because Browns actions benefited his clients. d. violate the Code because he did not have a reasonable basis for the investment decision. 107. Which of the following markets is NOT considered fungible? a. Cash b. Futures c. Options d. Real Estate 108. Which of the following indices is NOT capitalization-weighted? a. Russell 2000 b. NASDAQ Composite Index c. Dow Jones Industrial Average d. NY Stock Exchange Composite Index 109. Harold Johnson, CEO, sells 10,000 shares of his company stock. Mr. Johnson is which type of market participant? a. Liquidity b. Informed c. Uninformed 110. Which of the following is NOT a consideration for money management? a. Stops b. Exit strategies c. Position size management d. Trend following strategies 111. For the purposes of money management, risk is defined as a. beta.

b. volatility. c. loss of capital. d. variability of returns. 112. The most important aspect of money management is a. diversification. b. developing a winning system. c. determining the optimum position size. 113. Which of the following formulas is NOT a method for determining optimum position size? a. Risk of Ruin b. Theory of Runs c. Optimal f (or Kelly) d. Modified Martingale 114. All of the following are true regarding short sales EXCEPT a. shorted stocks are borrowed. b. margin must be used in this trade. c. the trade does not need to be closed. d. a short sale is a buy waiting to happen. 115. Methods to measure relative strength (RS) include all of the following EXCEPT the a. beta method. b. alpha method. c. trend slope method. d. percentage change method. 116. Which of the following is NOT included in the CANSLIM stock screening method? a. Leader or laggard b. Annual sales increases c. Institutional sponsorship d. Annual earnings increases 117. One of historys first known technical analysts, Sokyo Honma, developed trading rules known as the a. Sakata constitution. b. Saku-Gawa No Kon. c. Rokushaku bo kabudo. d. Shimuzu charting approach. 118. The first known stock certificate was created by the a. Lonja

b. Amsterdam Exchange c. New York Stock Exchange d. Dutch East India Company 119. The original intent of Charles Dow was to use the interplay of his Industrial and Railroad averages as a. market indicators. b. economic indicators. c. timing signals for intermediate term trading. 120. The expression The market is not a weighing machine, rather it is a voting machine refers to the a. correctness of the Efficient Market Hypothesis. b. value of each issue being recorded by an exact and impersonal mechanism. c. countless individuals who register their choices which are the product of and partly of emotion. 121. Which of the following is not included in Robert Rheas Dow Theory hypotheses? a. Dow Theory is infallible. b. The primary trend is inviolate. c. The averages discount everything. 122. Dow Theory teaches that the investor should forego attempting to predict the secondary trends because a. they are too random. b. they are subject to manipulation. c. exogenous events can be too great of an influence. d. their reversals are too similar to primary reversals and can create confusion. 123. The Dow tenet that says Volume goes with the trend is mainly focused on a. all the trends. b. only the primary trend. c. only the secondary trend. d. both the primary and secondary trend. 124. Which of the following is NOT a tool of Federal Reserve monetary policy? a. Changing the discount rate b. Changing the federal funds rate c. Changing the amount of reserves banks are required to hold d. Buying and selling U.S. Government and Agency issues in open market operations 125. A rising VIX index indicates a. increasing implied volatility. b. decreasing implied volatility. c. increasing historical volatility. d. decreasing historical volatility.

126. A bullish sign for the stock market is high levels of a. brokerage firm hiring. b. pessimism of Wall Street strategists. c. the Conference Boards Consumer Confidence index. d. the American Association of Individual Investors sentiment index. 127. Which of the following statements regarding price-weighted averages is correct? a. The S&P 500 Index is a price-weighted average. b. Float is taken into account when constructing price weighted averages. c. A high-priced stock has more influence on the average than a lower-priced stock. d. Stock splits and stock dividends are not taken into account when constructing price weighted averages. 128. Which of the following regarding the McClellan Oscillator is NOT correct? a. It is scaled to range from +1 to -1. b. It is a measure of market breadth. c. High readings indicate an overbought stock market. d. It is the difference between two exponential moving averages of advances minus declines. 129. The Arms Index a. is a ratio of two ratios. b. measures market sentiment. c. is a market capitalization weighted average. d. is a bullish signal for the market when the reading is high. 130. Which of the following statements regarding standard deviation is incorrect? a. It is a measure of volatility. b. It ranges in value from -1 to +1. c. It is a commonly used measure of risk. d. It is measured in the same units as the mean. 131. Three Steps and a Stumble is a market indicator based upon three consecutive a. monthly increases in insider trading activity. b. monthly increases in the bank prime interest rate. c. highs in the Dow Jones Industrial Average reached on decreasing volume. d. increases in either the federal funds target rate, margin requirements or reserve requirements. 132. Odd-lot short selling a. ranges from -1 to +1. b. is a contrary indicator of market direction. c. is mostly utilized by professional investors. d. is no longer a valid indicator of market sentiment.

133. Which of the following statements regarding margin debt is NOT correct? a. Margin debt is money borrowed from the Federal Reserve using securities as collateral. b. During stock market declines, margin debt becomes an important source of stock supply. c. The collateral value of the securities used as a basis for the margin debt falls as stock prices declined. Primary stock market peaks are generally preceded by rising interest rates, which increases the cost of carrying margin debt. 134. Bar charts typically contain all of the following prices EXCEPT the a. low. b. high. c. closing. d. opening. 135. Which of the following prices is common to both line and bar charts? a. Low b. High c. Open d. Close Answer Sheet CMT Level 1 Sample Questions 1. Answer: a. (low to low.) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 21, p. 391 2. Answer: a. (Phase) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 19, p. 454-5. 3. Answer: d. (useful in checking where the trend direction is headed or if it is changing.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 19, p. 457-8. 4. Answer: c. (8) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 20, p. 478-80. 5. Answer: c. (Third) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 20, p. 481. 6. Answer: c. (Logarithmic) Reference: du Plessis, The Definitive Guide to Point and Figure, Chapter 2, p. 71-77 Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 11m p. 220.

7. Answer: c. (Broadening formation) Reference: Edwards, Magee, & Bassetti, 2007, Technical Analysis of Stock Trends, 9th Edition, Chapter 10, 151. 8. Answer: b. (line.) Reference: Edwards, Magee, & Bassetti, 2007, Technical Analysis of Stock Trends, 9th Edition, Chapter 3, p. 21. 9. Answer: c. (Distance from current price) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 12, p. 242. 10. Answer: d. (A stocks volatility has decreased.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 14, pp. 292-5. 11. Answer: a. (Gaps are always filled.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 17, pp. 363-7. 12. Answer: a. (The Dow Jones Industrials and the Dow Jones Transportation indexes peak simultaneously.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 6, pp. 82-3. 13. Answer: c. (closing prices.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 6, pp. 82-3. 14. Answer: d. (identifying areas of accumulation or distribution.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 18, p. 420. Note accumulation and distribution are volume dependent. Point and figure charts have no volume. 15. Answer: b. (50%) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 15, pp. 298-300. 16. Answer: c. (sideways trending markets.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 14, p. 280-1. 17. Answer: d. (There would be no horizontal count.) Reference: du Plessis, The Definitive Guide to Point and Figure, 2nd Edition, Chapter 5, pp. 199-205. 18. Answer: d. (A broadening formation) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 15, pp. 320-325. 19. Answer: c. (three weeks to three months.) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, pp. 38-9. 20. Answer: b. (decreases as the pattern nears completion.) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, pp. 74-5.

21. Answer: c. (Breakaway) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 17, p. 363-70. 22. Answer: b. (all markets.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 2, pp. 9-16. 23. Answer: c. (Providing a method for evaluating the performance of a security relative to another security or index.) Reference: Kirkpatrick & Dahlquist, 2007, Technical Analysis, 2nd Edition, Chapter 18, pp.433-4. 24. Answer: c. (Any trend is influenced by its next longer and next shorter trend.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 2, pp. 15-6. 25. Answer: c. (lines tracking higher highs and lower lows to determine trend.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 14, pp. 288-91. 26. Answer: d. (The longer the trend, the more difficult it is to identify its reversal.) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 1, p 17. 27. Answer: b. (decrease the box size.) Reference: du Plessis, 2012, The Definitive Guide to Point and Figure, 2nd Edition, Chapter 6, p. 243. 28. Answer: a. (one-box reversal chart.) Reference: du Plessis, 2012, The Definitive Guide to Point and Figure, 2nd Edition, Chapter 5, p. 177 29. Answer: c. (Head and shoulders) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 14, pp. 280-2. 30. Answer: c. (15 column congestion zone.) Reference: du Plessis, The Definitive Guide to Point and Figure, 2nd Edition, Chapter 3. 31. Answer: a. (0) Reference: du Plessis, The Definitive Guide to Point and Figure, 2nd Edition, Chapter 2. 32. Answer: b. (They are preferred over arithmetic scaling for long-term trend analysis.) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 5 & 8, pp. 68-71; 142-5. 33. Answer: a. (0) Reference: du Plessis, 2012, The Definitive Guide to Point and Figure, 2nd Edition, Chapter 2, pp. 77-80. 34. Answer: b. (a reversal pattern.)

Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 5, p. 80. 35. Answer: b. (They have limit days.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 5, pp. 64-5. 36. Answer: c. (is the methodology used to construct the S&P 500 Index.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 5, p. 72. 37. Answer: a. (are also called coils.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 15, pp. 317-8. 38. Answer: a. (gives equal weight to each periods price.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 14, pp. 276-8. 39. Answer: b. (lead market action.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 14, pp. 276-81. 40. Answer: c. (close.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 14, p. 276. 41. Answer: b. (are better at giving signals at major tops than shorter term moving averages.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 14, pp. 279-81. 42. Answer: a. (is a smoothing device.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 14, p. 276. 43. Answer: a. (produce more trades.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 14, pp. 279-81. 44. Answer: c. (during the formation of the left shoulder.) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 5, p. 76. 45. Answer: b. (a gradual decline in volume until the breakout.) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 5, p. 94. 46. Answer: b. (number of futures contracts outstanding at any one time in each delivery month.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 18, pp. 427-8. 47. Answer: a. (doji) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 17, pp. 391-2. 48. Answer: c. (identify indications of both reversal and continuation patterns.)

Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 13, p. 259. 49. Answer: b. (advance/decline line.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 18, pp. 432-44. 50. Answer: b. (Using western techniques to confirm a candle pattern.) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 13, p.276. 51. Answer: c. (The proper order to follow in chart analysis is to begin with the long range and gradually work to the near term in order to gain perspective.) Reference: Edwards Magee, & Bassetti, 2007, Technical Analysis of Stock Trends, 9th Edition, Chapter 17, p. 323. 52. Answer: c. (number of contracts traded during the day.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 18, p. 427. 53. Answer: d. (the primary direction of the stock market.) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 3, p. 36. 54. Answer: a. (ignores time and volume.) Reference: du Plessis, The Definitive Guide to Point and Figure, 2nd Edition, Chapter 2 55. Answer: a. (two securities.) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 16, p. 304. 56. Answer: c. (level where selling pressure is sufficiently strong to overcome buying pressure.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 12, p. 230. 57. Answer: a. (market breadth.) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 24, p. 436. 58. Answer: b. (54 years.) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 20, p. 369. 59. Answer: a. (adding the height of the formation to the breakout price.) Reference: Edwards, Magee, & Bassetti, Technical Analysis of Stock Trends, 2007, Chapter 9, pp. 133-4. 60. Answer: b. (Buy and sell signals) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 14, p. 288. 61. Answer: a. (Advance-decline line) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 26, pp. 488-506.

62. Answer: d. (They measure rallies and declines using only closing prices.) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 15, pp. 294-7. 63. Answer: c. (the terminal phase of a rapid advance or decline.) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 6, p.105. 64. Answer: d. (A new plot on a point and figure chart is made only when the price changes by a given amount.) Reference: du Plessis, 2012, The Definitive Guide to Point and Figure, 2nd Edition, Chapter 2 65. Answer: d. (sequential reversals of price in unit increments.) Reference: du Plessis, 2012, The Definitive Guide to Point and Figure, 2nd Edition, Chapter 2, p. 53. 66. Answer: c. (price has moved by equal to or more than the specified box size.) Reference: du Plessis, 2012, The Definitive Guide to Point and Figure, 2nd Edition, Chapter 2, p 53. 67. Answer: c. (the sensitivity of price movement graphically displayed is increased.) Reference: du Plessis, 2012, The Definitive Guide to Point and Figure, 2nd Edition, Chapter 2 p. 53. 68. Answer: b. (Line) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 16, p. 305. 69. Answer: c. (opening price and closing price.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 11, pp. 201-3. 70. Answer: b. (closing price is lower than the opening price.) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 13, p. 258. 71. Answer: a. (provide a signal of a reversal in trend.) Reference: Edwards, Magee, & Bassetti, Technical Analysis of Stock Trends, 2007, Chapter 14, p. 253. 72. Answer: d. (the more times a trendline has been successfully tested, the greater the significance of its violation.) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 8, p.145. 73. Answer: d. (is heaviest during the formation of the left shoulder.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 15, pp. 326-9. 74. Answer: d. (amplitude, period and phase.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 19, p. 454. 75. Answer: d. (equal weight is given to each point included in the calculation.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 14, pp. 276-8.

76. Answer: d. (gives more weight to more recent observations.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 14, pp. 282-3. 77. Answer: c. (shorter length moving average crosses a longer length moving average from above.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 14, pp. 280-1. 78. Answer: d. (overbought or oversold conditions.) Reference: Kirkpatrick & Dahlquist, Technical Analysis, 2nd Edition, Chapters 8 & 18, p. 139 and p. 422. 79. Answer: c. (in a trading range.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 18, p. 417. 80. Answer: c. (become resistance levels on price bounces.) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 12, pp. 236-7. 81. Answer: b. (reverse roles once they are violated.) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 15, pp. 294-298. 82. Answer: a. (the stock is outperforming the market.) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 16, pp. 305-6. 83. Answer: b. (Oscillators) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 29, pp. 544-6. 84. Answer: a. (Sell/buy ratio) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 7, p. 118 (Chapter 7 not assigned at this level). Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 26. 85. Answer: d. (The security is performing better than the market or the entity being compared.) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 16, p. 306. 86. Answer: b. (Investors act rationally) Reference: Kirkpatrick & Dahlquist, 2011, Technical Analysis, 2nd Edition, Chapter 2, p 9 & 17. 87. Answer: c. (volatility has decreased.) Reference: Kirkpatrick & Dahlquist 2011, Technical Analysis, 2nd Edition, Chapter 14, p. 292. 88. Answer: d. (Broadening formations) Reference: Kirkpatrick & Dahlquist 2011, Technical Analysis, 2nd Edition, Chapter 15, p. 320. 89. Answer: b. (It is an effective pattern based upon percent winners.)

Reference: Kirkpatrick & Dahlquist 2011, Technical Analysis, 2nd Edition, Chapter 17, p. 391. 90. Answer: a. (The most profitable gaps are opening gaps.) Reference: Kirkpatrick & Dahlquist 2011, Technical Analysis, 2nd Edition, Chapter 17, pp. 363-7. 91. Answer: a. (Flag) Reference: Kirkpatrick & Dahlquist 2011, Technical Analysis, 2nd Edition, Chapter 15, p. 320. 92. Answer: b. (indicates that the rally is strong and will probably carry further.) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 10, p.190. 93. Answer: d. (Point and figure charts) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 14, p. 284. du Plessis, 2012, The Definitive Guide to Point and Figure, 2nd Edition, Chapter 5 94. Answer: d. (it is at turning points that the majority gets things wrong.) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 27, p. 511. 95. Answer: b. (Wilshire 5000 Equity Index) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 18, pp. 332-3. 96. Answer: c. (Kondratieff cycle.) Reference: Kirkpatrick & Dahlquist 2011, Technical Analysis, 2nd Edition, Chapter 9, pp. 164-9. 97. Answer: d. (small capitalization stocks outperform large capitalization stocks in January.) Reference: Kirkpatrick & Dahlquist 2011, Technical Analysis, 2nd Edition, Chapter 9, p. 174. 98. Answer: d. (Relative strength index (RSI)) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 26, pp. 485-510. 99. Answer: c. (bar chart when the bars vary in width determined by volume.) Reference: Kirkpatrick & Dahlquist 2011, Technical Analysis, 2nd Edition, Chapter 18, pp. 412-4. 100. Answer: b. (It is plotted on a bar chart.) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 23, pp. 430-1. 101. Answer: d. (Due to the complexity in their creation, it has only come into common usage since the advent of computers.) Reference: du Plessis, 2012, The Definitive Guide to Point and Figure, 2nd Edition, Chapter 1 & 2 102. Answer: d. (violate the standard with respect to maintaining the highest standards of professional competence, integrity and judgment.)

Reference: MTA Code of Ethics 103. Answer: a. (are not in violation.) Reference: MTA Code of Ethics 104. Answer: d. (in violation as the analysis is not considered reasonable in field of technical analysis.) Reference: MTA Code of Ethics 105. Answer: c. (in violation of the Code in terms of disparaging the work of the fundamental analyst.) Reference: MTA Code of Ethics 106. Answer: a. (are not in violation of the Code.) Reference: MTA Code of Ethics 107. Answer: d. (Real Estate) Reference: Kirkpatrick & Dahlquist (2011), Technical Analysis, 2nd Edition, Chapter 5, p. 58. 108. Answer: c. (Dow Jones Industrial Average) Reference: Kirkpatrick & Dahlquist (2011), Technical Analysis, 2nd Edition, Chapter 5, pp. 70-2. 109. Answer: b. (Informed) Reference: Kirkpatrick & Dahlquist (2011), Technical Analysis, 2nd Edition, Chapter 6, pp. 78-9. 110. Answer: d. (Trend following strategies) Reference: Kirkpatrick & Dahlquist (2011), Technical Analysis, 2nd Edition, Chapter 23, pp. 572-6. 111. Answer: c. (loss of capital) Reference: Kirkpatrick & Dahlquist (2011), Technical Analysis, 2nd Edition, Chapter 23, p. 562. 112. Answer: c. (determining the optimum position size.) Reference: Kirkpatrick & Dahlquist (2011), Technical Analysis, 2nd Edition, Chapter 23, p. 564. 113. Answer: d. (Modified Martingale) Reference: Kirkpatrick & Dahlquist (2011), Technical Analysis, 2nd Edition, Chapter 23, pp. 565-7. 114. Answer: c. (the trade does not need to be closed.) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 26, pg. 488 115. Answer: a. (beta method.) Reference: Kirkpatrick & Dahlquist (2011), Technical Analysis, 2nd Edition, Chapter 21, pp. 517-20. 116. Answer: b. (Annual sales increases)

Reference: Kirkpatrick & Dahlquist (2011), Technical Analysis, 2nd Edition, Chapter 21, p. 521. 117. Answer: a. (Sakata constitution) Reference: Kirkpatrick & Dahlquist (2011), Technical Analysis, 2nd Edition, Chapter 3, p. 25. 118. Answer: d. (Dutch East India Company) Reference: Kirkpatrick & Dahlquist (2011), Technical Analysis, 2nd Edition, Chapter 3, p. 24. 119. Answer: b. (economic indicators.) Reference: Kirkpatrick & Dahlquist (2011), Technical Analysis, 2nd Edition, Chapter 3, p. 27. 120. Answer: c. (countless individuals who register their choices which are the product of and partly of emotion.) Reference: Kirkpatrick & Dahlquist (2011), Technical Analysis, 2nd Edition, Chapter 3, p. 28. 121. Answer: a. (Dow Theory is infallible) Reference: Kirkpatrick & Dahlquist (2011), Technical Analysis, 2nd Edition, Chapter 6, p. 76. 122. Answer: d. (their reversals are too similar to primary reversals and can create confusion.) Reference: Kirkpatrick & Dahlquist (2011), Technical Analysis, 2nd Edition, Chapter 6, p.81. 123. Answer: d. (both the primary and secondary trend.) Reference: Edwards, Magee, & Bassetti, 2007, Technical Analysis of Stock Trends, 9th Edition, Chapter 3, p. 21. 124. Answer: b. (Changing the federal funds rate) Reference: Kirkpatrick & Dahlquist (2011), Technical Analysis, 2nd Edition, Chapter 10, pp. 190-1. 125. Answer: a. (increasing implied volatility.) Reference: Kirkpatrick & Dahlquist (2011), Technical Analysis, 2nd Edition, Chapter 13, pp. 100-1. 126. Answer: b. (pessimism of Wall Street strategists.) Reference: Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 26, Kirkpatrick & Dahlquist (2011), Technical Analysis, 2nd Edition, Chapter 7, pp. 96-115 (not assigned at this level). 127. Answer: c. (A high-priced stock has more influence on the average than a lower-priced stock.) Reference: Kirkpatrick & Dahlquist (2011), Technical Analysis, 2nd Edition, Chapter 5, pp. 69-72. 128. Answer: a. (It is scaled to range from +1 to -1.) Reference: Kirkpatrick & Dahlquist(2011), Technical Analysis, 2nd Edition, Chapter 8, pp. 142-3. 129. Answer: a. (is a ratio of two ratios.) Reference: Kirkpatrick & Dahlquist (2011), Technical Analysis, 2nd Edition, Chapter 8, pp. 149-51.

130. Answer: b. (It ranges in value from -1 to +1.) Reference: Kirkpatrick & Dahlquist (2011), Technical Analysis, 2nd Edition, Appendix A, pp. 585-6. 131. Answer: d. (increases in either the federal funds target rate, margin requirements or reserve requirements.) Reference: Kirkpatrick & Dahlquist (2011), Technical Analysis, 2nd Edition, Chapter 10, pp. 193-4. 132. Answer: b. (is a contrary indicator of market direction.) Reference: Kirkpatrick & Dahlquist (2011), Technical Analysis, 2nd Edition, Chapter 7, p. 115. (not assigned at this level). Pring, 2002, Technical Analysis Explained, 4th Edition, Chapter 26 133. Answer: a. (Margin debt is money borrowed from the Federal Reserve using securities as collateral.) Reference: Kirkpatrick & Dahlquist (2011), Technical Analysis, 2nd Edition, Chapter 21, pp. 501-4. 134. Answer: d. (opening.) Reference: Kirkpatrick & Dahlquist (2011), Technical Analysis, 2nd Edition, Chapter 11, pp. 201-1. 135. Answer: d. (Close) Reference: Kirkpatrick & Dahlquist (2011), Technical Analysis, 2nd Edition, Chapter 11, pp. 207-11.