Professional Documents
Culture Documents
for CMT
Level 1
Booklet A
These sample questions are used to provide the candidate with examples of how the
questions may appear on the CMT exam. Theactual CMTexam doesnot have any true/false
questions.ThesesamplequestionscovermuchofthemateriallistedintheBodyofKnowledge,
while the actual exam questions may be more difficult. In addition, these sample questions
cover a variety of topics; however, the actual exam weighting may vary. The actual exam
consistsof132questionsofwhich120arescoreditems.
Pleasenotethatthissamplequestionbookletwaspreparedentirelyseparatelyfromthe
actualexamtoensurethesecurityoftheactualexamquestions.Insomeaspects,thesesample
questions are designed differently from the actual exam so as to better serve as a review for
candidates.Forexample,manyquestionsand/oranswersmaybelongerthanintheactualexam
sothatthequestionsandanswersserveasareviewofthematerial.
TheMTAmaintainsadiscussiongroupforumforCMTcandidatesonitswebsite.
CandidatesareencouragedtoutilizethisresourceandtodiscussanyareasoftheBodyof
Knowledgewithwhichtheyarenotfamiliar.
Thisbookofpracticeexamsisproducedby:
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Allmaterialisbelievedtobereliableattimeofpublication,butnotguaranteed.The
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CMTLevel1SampleQuestionsAnswerSheet
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CMTLevel1SampleQuestions
1. CyclesareGENERALLYmeasured:
a. Hightolow
b. Lowtolow
c. Hightohigh
d. Eitherborc
2. Thiscycleprinciplestates,asstocksgothroughsimilarcyclesthesizeandmagnitudewilldiffer:
a. Commonality
b. Variation
c. Summation
d. Proportionality
3. WhichwouldbetheMOSTusefulaspectofacycleinstudyingtherelationshipbetweencyclesof
differentlengths?
a. Phase
b. Period
c. Amplitude
d. Noneoftheabove
4. Inregardstocycleanalysis,translationis:
a. Distancebetweentroughs
b. Distancebetweenpeaks
c. Usefulincheckingwherethetrenddirectionisheadedorifitischanging
d. Totheleftwhenthepeakisbeyondthehalfwaypoint
5. AcompleteElliottwavecycleismadeupofhowmanywaves?
a. 5
b. 3
c. 8
d. 13
6. Inanormal5waveElliottimpulsewave,whichwaveisUSUALLYexpectedtobethelongestandmost
dynamic?
a. 3rd
b. 5th
c. 1st
d. 1stbutsometimes3rd
7. Whenanalyzinglongtermpricemovements,itcouldbehelpfultousewhichtypeofchart?
a. Candlechart
b. Logarithmicchart
c. Barchart
d. Pointandfigurechart
8. WhichofthefollowingwouldLEASTlikelybeacontinuationpattern?
a. Broadeningformation
b. Inverseheadandshoulders
c. Ascendingtriangle
d. Flag
9. WhichofthefollowingwouldNOTbeconsideredasupportlevel?
a. Previoushigh
b. Previouslow
c. Tradingrange
d. Alltheaboveareconsideredtobesupportlevels
10. AccordingtotheDowTheory,secondarycorrectionscanbereplacedbya:
a. Flag
b. Line
c. Triangle
d. Wedge
11. Whichofthefollowingwouldbetheleastimportantfactorindeterminingthesignificanceofatrend
line?
a. Duration
b. Distancefromprice
c. Numberoftimestouched
d. Angleofascentordescent
12. For a breakout or breakdown from a triangle to be considered valid it should occur no more than
___________ofthedistancetotheapexfromthebeginningofthepattern?
a. Onehalf
b. Twothirds
c. Threequarters
d. Fivesixths
13. WhatisindicatedwhenBollingerBandsnarrow?
a. Astockisreadyforarally
b. Astockisreadyforadecline
c. Astocksvolatilityhasincreased
d. Astocksvolatilityhasdecreased
14. WhichofthefollowingisNOTtrueaboutgaps?
a. Commongapsareoflittleornoforecastingvalue
b. Breakawaygapsusuallycomeonheavyvolume
c. Gapsarealwaysfilled
d. Whenexhaustiongapsarefilled,itisoftenthesignofatrendreversal
15. WhichBESTcharacterizescontinuationpatterns?
a. Thereissidewayspriceaction
b. Theytakealongtimetoform
c. Theyusuallyrepresentlongtermpatterns
d. Theysignalthestartofanewtrend
16. WhichisNOTtrueofaparabolicblowoff?
a. Pricesfallsharplyafterasharprise
b. Volumeisheavyintopeak
c. Thecloseisnearthelowendofthedailyrange
d. Theyareeasytoidentify
17. InorderforaDowTheorysellsignaltobeconfirmed:
a. TheDowJonesIndustrials(DJI)andtheDowTransports(DJT)mustpeaksimultaneously
b. TheDJIandDJTmustfailtoconfirmatthehighs
c. BoththeDJIandDJTmustbreakbelowanimportantintermediatetermsupportlevel
d. bandc
18. TheDowTheoryusesONLY:
a. Highprices
b. Lowprices
c. Closingprices
d. Alloftheabove
19. A company whose stock is in a wellestablished uptrend reports earnings slightly above consensus
estimates. After an initial rally, the stock then ends lower on the day. This would probably be an
exampleof:
a. Investorennui
b. Marketdiscounting
c. Unrealisticexpectations
d. Ashortcomingoffundamentalanalysis
20. PointandfigurechartsareLEASTsuitedto:
a. Establishingtargets
b. Identifyingareasofaccumulationordistribution
c. Identifyingareasofsupportandresistance
d. Identifyingbreakouts
21. Inadojicandlestick:
a. Supplyexceedsdemand
b. Demandexceedssupply
c. Supplyanddemandareinbalance
d. Alltheabove
22. WhichofthefollowingisaFibonacciratio?
a. 50%
b. 75%
c. 33%
d. 66%
23. Whenusingamovingaveragecrossoversystemtogeneratebuy/sellsignals,aSELLsignalwouldbe
generatedwhen:
a.
b.
c.
d.
Theslowermovingaveragefallsbelowthefasteraverage
Theslowrisesabovethefast
Thefastfallsbelowtheslow
Eitheraorc
24. MovingaveragesareofLEASTuseingeneratingbuyorsellsignalsin:
a. Asidewaystrend
b. Amoderatelyslopinguptrend
c. Asteepdowntrend
d. Notespeciallyusefulinanyofthem
25. A stock trades in a range between 51 and 55 for 10 days and then moves higher. If you have been
chartingthe stockwitha 3boxreversalpointandfigurechart, with2pointsassignedperbox, what
wouldthehorizontalcountbe?
a. 30points
b. 10points
c. 60points
d. Therewouldbenocount
26. WhichofthefollowingisUSUALLYassociatedwithmajormarkettops?
a. Extended3rdwave
b. Ascendingtriangles
c. Broadeningformations
d. Pennant
27. Onbalancevolumeisusedto:
a. Confirmprice
b. Spotdivergence
c. Clarifyvolumetrends
d. Alltheabove
28. Commonfiltersusedtoconfirmatrendlinebreakinclude:
a. Penetrationabove/belowthetrendlinebyasetpercentage
b. Apredefinedperiodoftimeduringwhichpricesstayabove/belowthetrendline
c. Acloseabove/belowthetrendline
d. Alltheabove
29. Thelengthofaminortrendis:
a. Lessthan3weeks
b. Upto6weeks
c. About3months
d. Under6monthsbutmorethanamonth
30. Asageneralrule,inrectangle,triangle,flagandpennantpatterns,volumegenerally:
a. Increasesasthepatterndevelops
b. Decreasesasthepatterndevelops
c. Staysconstantasthepatterndevelops
d. Showssignsofaccumulation
31. WhichtypeofgapisLEASTlikelytobefilledwhenitoccurswithhighvolume?
a. Common
b. Breakaway
c. Exhaustion
d. Runaway
32. TrendsareMORELIKELYtopersistthanreverse.
a. Inbullmarketsonly
b. Inbearmarketsonly
c. Inallmarkets
d. Innomarkets
33. Oneofthegreatstrengthsoftechnicalanalysisisits__________(canbeappliedtomanydifferent
marketsandtimeframes).
a. Flexibility
b. Rigidity
c. Predictability
d. Systems
34. Trendlinesshould_________beredrawntoaccommodateanacceleratingtrend.
a. Always
b. Never
c. Possibly
d. Generally
35. WhichofthefollowingisNOTanimportantuseforanoscillator?
a. Providesatradingsignalinthedirectionofthepricetrendwhenitcrosseszero
b. Providesawarningwhentheoscillatorandpricearedivergingandtheoscillatorisatan
extreme
c. Providesamethodofevaluatingtheperformanceofasecurityrelativetoanothersecurityor
index
d. Determineswhenoverboughtandoversoldconditionsexistwhentheoscillatorreachesan
extremereadingneartheupperorlowerendofitsboundaries.
36. WhichofthefollowingpercentageparametersisNOTawidelyrecognizedpercentageretracement?
a. 66%
b. 45%
c. 50%
d. 33%
e. Noneoftheabove
Thefollowing8questionsrefertotheMTACodeofEthics.ThewordMemberisusedbuttheCodeappliestoboth
MTAMembersandAffiliates.
37. AnMTAEthicsinvestigationconcludesthattheaccusedMemberisdeclaredinnocentofanycharge.
ThecomplainanthadsimultaneouslyfiledthecomplaintwithaStateAgencythatdecidedthatthe
Memberisguilty.TheMTArulingstands.
a. True
b. False
38. JaneDoeisaMemberandtheCEOofherowninvestmenttradingfirm.SheisallowedtousetheMTA
Directorytosendemailstopromotehernewbook.
a. True
b. False
39. ItisacceptableforaMembertopublishtechnicallyderivedviewsoffuturesecuritypricesbehavior
reflectingforeknowledge.
a. True
b. False
40. Membersmaymakestatementsconcerningnewmethodsoftechnicalanalysisprovidedsuch
modificationsofexistingconceptsarefullydocumented.
a. True
b. False
41. AnewproprietarymethodinthefieldoftechnicalanalysisisintroducedbyaMember.Itisnot
necessarytodocumenttheprocedureandrationalesupportingthenewmethodbecausethe
informationisproprietary.
a. True
b. False
42. Inatechnicaldebate,aMemberdisparagestheanalyticalworkofanotherpanelist.Thereisaviolation
oftheCodeofEthics.
a. True
b. False
43. Membersareabletoactonnonpublicinformation.
a. True
b. False
44. AMemberwritesanarticlethatincludesadeceasedauthorsoriginalwork.TheMemberneedsto
obtainpermissionfromtheauthorsestateforpublication.
a. True
b. False
45. Whatisintermarketanalysis?
a. Studyoftheinterrelationshipsbetweenthevariousindependentfinancialmarkets
b. Studyoftheinternalsofthevariousfinancialmarkets
c. Studyofthevariousinternationalfinancialmarketsandhowtheyinfluenceeachother
d. Noneoftheabove
46. Thesecondarytrendismeasuredin_______andtheintermediatetrendismeasuredin_______.
a. Monthsoryears;daysorweeks
b. Weeksormonths;weeksormonths
c. Daysorweeks;intradayminutes
d. Intradayminutes;weeksandmonths
47. Whichofthefollowingisacharacteristicofatrend?
a. Trendstendtoreverseratherthancontinue
b. Anytrendisinfluencedbyitsnextlargerandsmallertrend
c. Thetrendisastraightline
d. Alloftheabove
48. TheDirectionalIndicatorcanbedefinedas:
a. Twolinesplaced2standarddeviationsaboveorbelowamovingaverage
b. Twomovingaveragesofthehighs
c. Twolinestrackinghigherhighsandlowerlowstodeterminetrend
d. Twomovingaveragesofthelows
49. WhichofthefollowingisFALSE?
a. Alwaystradewiththetrend
b. Breakoutsfromsupport/resistanceisusuallyachangeintrend
c. Thelongerthetrend,thelesssignificantthebreakout
d. Atrendlinebreakisatleastawarningofachangingtrend
50. Adescendingtriangle:
a. Hasarisingsupportlineandahorizontalresistanceline
b. Hasarisingresistancelineandahorizontalsupportline
c. Hasafallingresistancelineandahorizontalsupportline
d. Hasafallingsupportlineandahorizontalresistanceline
51. Howwouldyouuserelativestrengthanalysiswhencomparingsectors?
a. CompareRSIsthehigherthenumber,themorebullishthesector
b. Dividethepriceofonesectorbyanotherandcompare
c. Dividethepriceofonesectorbyanindustrybenchmarkandcompare
d. Wedontcomparesectors,wecompareindustrygroups
52. Toincreasethesensitivityofa5x3pointandfigurechart,onewould:
a. Increasetheboxsize
b. Decreasetheboxsize
c. Increasethenumberofboxesneededforareversal
d. Bothaandc
53. Inpointandfigurecharting,theabilitytoobtainpriceobjectivesthroughuseofthehorizontalcountis
aprincipaladvantageofthe:
a. Oneboxreversalchart
b. Threeboxreversalchart
c. Fiveboxreversalchart
d. Alloftheabove
54. InwhatchartingtechniquewilltrendlinesONLYbedrawnat45degreeangles?
a. Barcharts
b. Candlestickcharts
c. Swingcharts
d. Simplifiedthreeboxpointandfigurecharts
55. WhichpatternisNOTfoundinaPointandFigurechart?
a. HeadandShoulders
b. Twomovingaveragesofthehighs
c. Bullishengulfingpattern
d. Fulcrum
56. Whatpatternisfoundinpointandfigurecharts?
a. Doji
b. Headandshoulders
c. Islandreversal
d. Alloftheabove
57. Usingintraday1x1PointandFigurecharts,whichbreakoutisMOSTsignificant?
a. Abreakoutfroma5columncongestionzone
b. Abreakoutfroma10columncongestionzone
c. Abreakoutfroma15columncongestionzone
d. Thebreakoutsareofequalsignificance
58. YouareupdatingPointandFigurecharts.Theyareoneboxreversalcharts($1boxsize)andthecurrent
column has 4 Xs. The most recent posting is $40. The stock closed yesterday at $40.50. Today, the
stockopenedat$40.60,ranupto$40.95,andclosedatthelowforthedayat$39.11.HowmanyNEW
postingswillyoubemakingonthecharttoreflecttodaystrading?
a. 0
b. 1
c. 2
d. 3
59. Whichofthefollowingisacharacteristicoflogarithmicscales?
a. Thepercentagegetslargerasthepricescaleincreases
b. Thepercentagegetssmallerasthepricescaledecreases
c. Theyarepreferredoverarithmeticscalingforlongtermtrendanalysis
d. Theverticalpricescaleshowsanequaldistanceforeachpriceunitofchange
60. Pointandfigurechartsarenamed?
a. Accordingtotheissuethattheyaredrawnupon
b. Accordingtothemarketonwhichtheyaretraded
c. Accordingtothedayoftheweek,monthandyear
d. Accordingtotheirboxandreversalsize
61. You are updating Point and Figure charts. They are 5x1 charts. The most recent posting is $75. The
days trading begins at $75.55. A rally ensues that takes the stock up to the days high of $77.88. A
declinesetsinfortherestofthedayandthestockclosesatthelowof$71.23.Howmanypostingswill
youmakeonthechart?
a. 0
b. 1
c. 2
d. 7
62. CyclesareUSUALLYmeasuredfrom:
a. Cresttocrest
b. Troughtotrough
c. Wheeltowheel
d. Curltocurl
63. 10daycyclesareBESTtimedwith:
a. 5dayoscillators
b. TheBressertoscillator
c. 10dayoscillators
d. 20dayoscillators
64. WhichofthefollowingisNOTtrue:
a. Normalityistheprinciplethatrelatescyclesofdifferentlengthsbecausetheyarerarely
identical
b. Summationistheprinciplethataddscyclestogether
c. PrincipleofProportionalitystatesacycleofsimilardurationexistseverywhereinthemarket
d. aandc
65. ThefollowingisNOTcommonofreversalpatterns:
a. Theexistenceofapriortrend
b. Thelargerthepatternthegreaterthesubsequentmove
c. Topsusuallytakelongertoformthanbottoms
d. Thebreakofamajortrendline
66. Aninverseheadandshoulderspatternisa:
a. Toppingpattern
b. Generallyunreliable
c. Reversalpattern
d. aandb
67. TheMAXIMUMobjectiveofreversalpatternsis:
a. 50%retracement
b. 66%retracement
c. .618ofthecurrentprice
d. 100%retracement
68. Moderncomputertechnologyhasdemonstratedthatpricesarenotnecessarilyrandom,butalsothat
theyarenotperfectlypredictable.
a. True
b. False
69. Whichofthefollowingareconsideredadvantagestotradingfutures?
a. Futuresdonotrequireanupticktoshort
b. Theyarehighlyleveraged
c. Theyhaveafavorabletaxbenefit
d. Alloftheabove
70. WhichisTRUEofdoubletops:
a. Therearetwoidentifiablepeaksatverydifferentpricelevels
b. Volumeislighterduringthefirstpeak
c. Theyoftenoccuratmarketbottoms
d. Heightisoftenusedasameasuringobjective
71. Ofthefollowing,whichareNOTcorrectstatementsconcerningreversalpatterns?
1. Thelargerthepattern,generallythegreaterthesubsequentmove
2. Patternsoccurringattopsgenerallytakelongertobuild,whilethoseoccurringatbottomsgenerally
completemorequickly
3. Reversalpatternsmusthavesomethingtoreversefrom
4. Bottomsareusuallymorevolatilethantops,thereforetheyrequirelesstimetobuild
a. 2and4
b. 1and4
c. 1and3
d. 3and4
72. Whichofthefollowingdescribesanequallyweightedaverage?
a. Aninvestorinveststhesamedollaramountineachsecurity
b. Isadjustedbyadivisor
c. Considersthemarketcapitalizationofeachsecurityintheaverage
d. IsthewaytheDowJonesIndustrialAverageiscalculated
73. Areasonablepriceobjectiveonceastockhascompletedaheadandshoulderspatternis:
a. 100%oftheprevioustrend
b. DerivedusingtheFibonacciRatio
c. Equivalenttothedistancebetweentheheadandneckline
d. Dependsontheactionoftheaccompanyingvolume
74. Acontinuationpatternis:
a. Apauseintheprevailingtrend
b. Usuallyasidewayspriceaction
c. Usuallyaneartermorintermediatetermpattern
d. Alloftheabove
75. Asymmetricaltriangleis:
a. Alsocalledacoil
b. Usuallyacontinuationpattern
c. Atemporarypauseintheexistingtrend
d. Alloftheabove
76. Theapexofatriangularpatternis:
a. Thepointwheretwolinesmeet
b. Apointthathelpstotimeandmeasurethepotencyofthepattern
c. Animportantsupportorresistancelevelafterthebreakoutoccurs
d. Alloftheabove
77. Volumeshoulddiminishduringthepriceswingswithinatriangularpattern.
a. True
b. False
c. Sometimes
d. Onlyonthedownsideswings
78. Thebreakoutfromatriangleformation
a. Shouldtakeplacewithasharpincreaseinvolume
b. Shouldtakeplacebetweentwothirdstothreefourthsofthewaythroughthepattern
c. Isapricelevelthatimmediatelybecomessupport/resistance
d. Alloftheabove
79. ThedescendingtriangleisjustamirrorimageoftheascendingtriangleandisGENERALLYconsidereda
______pattern.
a. Bullish
b. Bearish
c. Continuation
d. bandc
80. AllofthefollowingareTRUEofflagandpennantpatternsEXCEPT:
a. Theyareshorttermpatternscompletedinonetotwoweeks
b. Theyareprecededbysharpandnearlystraightlinemoves
c. Theyarecharacterizedbyadecreaseofvolumeduringtheformationofthepattern
d. Theyarereversalpatterns
81. The measuring technique for most continuation patterns implies that a price objective from the
breakoutpointisequaltothe____ofthepatternatitsbroadestpoint.
a. Width
b. Height
c. Noneoftheabove
d. 100%ofpriortrend
82. Thereversalpatternthatcanalsoappearasacontinuationpatternis:
a. Saucer
b. Headandshoulders
c. Spike
d. Doubletop
83. WhichBESTdescribescontinuationpatterns?
a. Theytypicallytakelongertobuild
b. Theytypicallysignaltheonsetofanewtrend
c. Theyarerepresentedbysidewayspriceaction
d. Theyprecedelongtermmoves
84. Stocktradersrelyheavilyon:
a. 4and92daymovingaverages
b. 50and200daymovingaverages
c. 30and40weekmovingaverages
d. bandc
85. Thesimplemovingaverage:
a. Givesequalweighttoeachperiodsprice
b. Givesgreaterweighttothemorerecentprice
c. Assignsgreaterweighttomorerecentdataandincludesallofthedatainthelifeofthe
instrument
d. Noneoftheabove
86. Achannelbreakoutsystemworksextremelywellin:
a. Trendingmarkets
b. Nontrendingmarkets
c. Dailyandweeklychartsandmonthlycharts
d. aandc
87. Themovingaverage:
a. Followsthetrend
b. Isasmoothingdevice
c. Lagsmarketaction
d. Alloftheabove
88. Thecrossovermethodrefersto:
a. Buyingthesamesecurityhighandsellingitlowtwiceinthesameday
b. Takingthebuy/sellrecommendationsofafundamentalanalyst
c. Abuyorsellsignalgeneratedwhenashortermovingaveragecrossesalongermovingaverage
d. aandb
89. TheMOSTcommonlyusedpricetocalculatethemovingaverageisthe:
a. High
b. Low
c. Midpoint
d. Close
90. Ina10daysimplemovingaverage,eachdayspriceisassignedaweightingof:
a. 1%
b. 5%
c. 10%
d. 20%
91. Whichmovingaverage(s)assignGREATERweighttothemostrecentdata?
a. Simple
b. Weighted
c. Exponential
d. bandc
92. Longertermmovingaverages:
a. Givefewerbuyandsellsignals
b. Arebetteratgivingsignalsatmajortops
c. Givebackalotmorewhenthetrendreverses
d. aandc
93. Amovingaverage:
a. Isasmoothingdevice
b. Enablestheanalysttopredictprecisepricetargets
c. Enablestheanalysttopredictprecisetimeandpricetargets
d. Alloftheabove
94. Shortermovingaverages:
a. Producemoretrades
b. Producefewerwhipsaws
c. aandb
d. Noneoftheabove
95. Tohelpconfirmapricetrend,volumeshouldexpand:
a. Onareversalday
b. Onastrongclose
c. Inthedirectionofthetrend
d. Whenapricetargetismet
96. Volumedivergenceoccurswhen:
a. Volumeexpandswhileopeninterestcontracts
b. Volumeexpandswhilethedailytradingrangecontracts
c. Anewhighinanuptrendtakesplaceondecliningvolume
d. Volumedeclinesduringasidewayscongestionpattern
97. Onaheadandshoulderstop,theheadistypicallymadeon:
a. Activevolume
b. Lightvolume
c. Breakoutvolume
d. Normalvolume
98. Volumeinaheadandshoulderspatternisusuallyhighestwhere?
a. Atthetopofthehead
b. Atthecompletionofthehead
c. Duringtherightshoulder
d. Duringtheleftshoulder
99. Trianglepricepatternsshouldbeaccompaniedby:
a. Activevolumewithinthepattern
b. Heaviervolumeinthedirectionoftheeventualbreakout
c. Agradualdropoffinvolumeuntilthebreakout
d. Nodiscernabledifferenceinvolumeuntilafterthebreakoutoccurs
100. Techniciansbelievethat:
a. Priceprecedesvolume
b. Volumeprecedesprice
c. Volumeandpricearetypicallycoincidentindicators
d. Volumemattersmostduringbreakouts
101. Asellingclimax:
a. Typicallyoccursatamarkettop
b. Typicallyoccursatamarketbottom
c. Isaccompaniedbyaveragetolowvolume
d. Indicatesnewshortsgettingtrappedatthebottom
102. Openinterestis:
a. Thenumberofcontractstradedinaday
b. Thenumberofoutstandingcontractsinanygivenday
c. Thesumoftotalvolumeandopeninterest
d. Noneoftheabove
103. Acandlestickwithequalopeningandclosingprices:
a. NeutralCloud
b. SpinningTop
c. MorningStar
d. Doji
104. ThePRIMARYuseofacandlestickpatternisto:
a. Definetheintermediateandshorttermtrends,butnottheprimarytrend
b. Definetheprimary,intermediate,andshorttermtrends
c. Strengthenthepossibilityofareversalorcontinuationofapricetrend
d. Determineifyouareinabullmarketorabearmarket
105. AllthefollowingaremomentumoscillatorsEXCEPT:
a. Advance/declineline
b. RelativeStrengthIndex(RSI)
c. Stochastic
d. MovingAverageConvergence/Divergence(MACD)
106. Whichisanexampleofcandlepatternfiltering?
a. Acceptingonlythosepatternsthatfitthestrictdefinitionoftheirpattern
b. Acceptingonlythosepatternsthatareconfirmedbytheintermediatetrend
c. Usingwesterntechniquestoconfirmacandlepattern
d. Usingcyclestoconfirmtheexistenceofapattern
107. Whichtoolscouldyouuseincandlepatternfiltering?
a. Cycles
b. PointandFigurechart
c. RSIandMACD
d. DowTheory
108. Inanalyzingastockusingadailychart,itisBESTtouse:
a. Aperiodoftimebetweensixtotwelvemonths
b. Aperiodoftimebetweentwelvetofifteenmonths
c. Aperiodoftimebetweensixteentotwentymonths
d. Aperiodoftimebetweentwentytotwentyfourmonths
e. Morethantwoyearsofdata
109. Thelimitedlifefeatureofthecontractsposessomeproblemsforfuturestraderswhichstocktraders
donotface.Thisisdueto:
a. Theveryhighvolatilityrelatedtothefuturesmarkets,whichresultsinalotofwhipsaws
b. Theaveragefuturescontracthasatradinglifeofaboutayearandahalfonly
c. Futuresmarketsarenormallymoreriskythanequitymarkets
d. aandb
110. WhichofthefollowingstatementsareCORRECT?
1. Theproperordertofollowinchartanalysisistobeginwiththelongrangeandgraduallyworktotheear
term
2. Longtermchartsarenotmeantfortradingpurposes
3. Trianglesdonotappearinlongtermchartsbecauseoftheirveryshorttermnature
a. 1only
b. 1and2
c. 1,2and3
d. 2and3
111. Forafuturescontract,dailyvolumerepresents:
a. Thedollarvolumeofthecontractstraded
b. Thecumulativepricechangefortheday
c. Thenumberofcontractstradedduringtheday
d. Theopeninterestattheendoftheday
112. Flowoffundanalysisreliesinpart:
a. Onthesentimentofinvestmentadvisoryservices
b. OnmonthlypricemovementsoftheDowJonesIndustrialAverage
c. Onmarketvolumestatistics
d. Onmeasuringthecashpositionofdifferentinvestorgroups
113. ThebelowNASDAQmonthlychartisshowingamaindowntrend.Themonthlabeled(A)hadan
importantimpactontheensuingdecline.Thisformationcorrespondstoasimilarformationonthe
dailychartcalled:
a. Keyreversalday
b. Insideday
c. Doubletop
P a g e 19
d. Outsideday
114. ThechartbelowisaweeklychartofGAP.TheclosingpriceinthebarlabeledAisthecloseof:
a. Fridayclosecorrespondingtotheendoftheweek
b. Fridayclosecorrespondingtotheendofthemonth
c. ClosingpricedoesnotnecessarilyhavetocorrespondtoFriday
d. aandc
115. BelowisamonthlychartofBurlingtonResources.Wheredoesmainresistancelie?
a. 45
b. 48.5
c. 53.5
d. 45
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116. BelowisamonthlychartofCitigroupwhichshows:
a. Thetrendisstillupandnosignsofweaknessappearedyet
b. Thestockisattheendofalongtermdowntrend
c. Nomajortrendsappearonthechartyet
d. Thestockviolatedamainuptrendlineandisreversing
117. ThebelowchartshowsEliLillyweeklyfrom1995till2001.TherearethreetrendlineslabeledA,Band
C.WhichisTRUE?
a. LineAreflectsthelongtermuptrend,BreflectsmediumtermuptrendwhileCreflectsshort
termuptrend
b. LineAreflectsthelongtermuptrend,whileCreflectsashortertermdowntrend
c. Thestockisstillinitslongtermuptrend
d. bandconly
e.
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118. Inthechartbelow,theareahighlightedbytherectangleis:
a. Aheadandshoulderstop
b. Aheadandshouldersbottom
c. Atriplebottom
d. Adoubletop
119. Thereversalpatterninthechartbelowisa:
a. HeadandShoulders
b. Triangle
c. DoubleTop
d. TripleBottom
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P a g e 23
120. Inthechartbelow,thetargetforthereversalpatternwouldhavebeenreachedwhen
a. Priceclosesbelow19
b. Pricemovesbelow20onheavyvolume
c. Priceclosesbelow22
d. Pricemovesbelow22onheavyvolume
121. Inthechartbelow,thepatternabovethedashedlineisa:
a. Spiketop
b. Tripletop
c. Faileddoublebottom
d. Headandshoulders
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122. Inthechartbelow,whatistheexpectedMINIMUMpricetargetafterthepatterncompletes?
a. 76
b. 51
c. 26
d. 40
123. Inthechartbelow,thepatternissaidtohavecompletedwhenprice:
a. Closedbelow40onheavyvolume
b. Closedabove40onlightvolume
c. Closedbelow51volumeisimportant,butnotcritical
d. Thisisnotadiscernablepattern
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P a g e 25
124. Inthechartbelow,ifthepatterntracingitselfoutbetweenOctoberandFebruarycompletes,the
expectedMINIMUMpriceobjectiveis:
a. 100%ofthepreviousmove
b. Approximately1830
c. Approximately.618timeswithwidthofthepattern
d. 33%ofpreviousmove
125. Inthebelowchart,thepatterntracedoutinthecircledareais:
a. Triplebottom
b. Doublebottom
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c. Failedheadandshoulders
d. Invertedheadandshoulders
126. Forafuturescontract,dailyvolumerepresents:
a. Thedollarvolumeofthecontractstraded
b. Thecumulativepricechangefortheday
c. Thenumberofcontractstradedduringtheday
d. Theopeninterestattheendoftheday
127. Flowoffundanalysisreliesinpart:
a. Onthesentimentofinvestmentadvisoryservices
b. OnmonthlypricemovementsoftheDowJonesIndustrialAverage
c. Onmarketvolumestatistics
d. Onmeasuringthecashpositionofdifferentinvestorgroups
128. Amomentumindexmeasures:
a. Investorsentiment
b. Investorpsychology
c. Therateofchangeofprices
d. Absolutevolumelevel
129. Asimplemovingaverage:
a. Isacumulativebreadthmeasure
b. Isconstructedfromvariousrandomlyselectedinterviewsofretailinvestors
c. Seldomchangesinvalue
d. Isconstructedbytotalingasetofdataanddividingthattotalbythenumberofobservations
130. TheobjectiveoftheDowTheoryistodetermine:
a. Changesinmarketpsychology
b. Thelikelihoodofvolumereversals
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P a g e 27
c. Theprimarydirectionofthestockmarket
d. Timingofmarketbottoms
131. OscillatorsareNORMALLYusedto:
a. Identifyoverboughtoroversoldmarketconditions
b. Identifyprice/volumedivergences
c. IdentifyElliottWavecycles
d. Gaugedifferentialsbetweenbuyersandsellers
132. APointandFigurechart:
a. Ignorestime
b. Givesaclearpictureofvolumedistribution
c. Islimitedbyafouryeartimehorizon
d. Cannotbeusedtoprojectpricetargets
133. OnedisadvantagetoPointandFigurechartsisthatsomeformationsthatwouldappearonabarchart
donotappearonpointandfigurecharts.Whichofthefollowingcouldoneidentifyusingathreepoint
reversalPointandFigurechart?
a. Keyreversaldays
b. Gaps
c. Sellingclimax
d. Noneoftheabove
134. Relativestrengthanalysis,asappliedinequityanalysis,relates:
a. Volumechangestopricechanges
b. Unsophisticatedinvestorbehaviortopricecycles
c. Changesinsecuritypricesinrelationtoothersecurityprices,grouppriceindicesormarket
action
d. Rateofpricechangeof4,13and42weeks
135. Theresistancelevelofapricetrendrefersto:
a. Thelevelunderthemarketwherebuyinginterestissufficientlystrongtoovercomeselling
pressure
b. Theleveloverthemarketwheresellingpressureissufficientlystrongtoovercomebuying
pressureandapriceadvanceisexpectedtobeturnedback
c. Theboundariesofthetradingrangeofthetrend
d. Thetargetpriceindicatedbythecount
136. Thesupportlevelofapricetrendrefersto:
a. Thehighestpriceobservedduringtheprecedingcycle
b. Thelowestpriceobservedduringtheprecedingcycle
c. Theareaoverthemarketwheresellingpressureovercomesbuyingpressureandaprice
advanceisexpectedtobeturnedback
d. Theareaunderthemarketwherebuyinginterestissufficientlystrongtoovercomeselling
pressureandapricedeclineisexpectedtobereversed
137. Tomeasureanoverboughtoroversoldmarketlevel,atechnicalanalystwouldNORMALLY:
a. Lookformovingaveragecrossovers
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b. Lookforaseriesofexhaustiongaps
c. Useoneormorepriceoscillators
d. Lookforpriceandvolumedivergences
138. OscillatorsareNORMALLYusedto:
a. IdentifyElliottWavecycles
b. Identifycontinuationpatterns
c. Measurepricemomentum
d. Identifythepremiumordiscountbetweenstockindexfuturecontractsandtheunderlyingprice
index
139. Theadvancedeclinelineisusedtoindicate:
a. Ifthemajorityofstocksinthemarketareactinginconcertwiththemajoraverages
b. Ifvolumetrendsareconfirmingpricetrends
c. Iftheintermediatemarketcycleisnearingcompletion
d. Ifabullmarketisoccurring
140. AccumulationNORMALLYoccurs:
a. Nearamarketbottom
b. Nearamarkettop
c. Indecliningmarkets
d. Afteracompletedtradingrange
141. TheKondratieffcycleextendsforaperiodofabout:
a. 13weeks
b. 13years
c. 54weeks
d. 54years
142. ThePublic/SpecialistShortSalesRatioisusedasatoolthat:
a. Showsthedifferencebetweensophisticatedmoneyandunsophisticatedmoney
b. ShowsthegrowthinmoneyflowproducedbyNYSEspecialists
c. Measurescontraryopinion
d. Hasbecomeobsoleteduetoderivativeproducttrading
143. Blowoffsareidentified:
a. Nearmarketbottoms
b. Byobservingasharprallyinpricesafteralongadvanceaccompaniedbyasharpincreasein
tradingactivity
c. Byobservingasuddensharpdropinpricesafteralongdeclineaccompaniedbyheavytrading
activity
d. Usingtechniquesofcycleanalysis
144. Asellingclimaxisidentified:
a. Withdecliningvolumeinthebeginningralliesfromthebottom
b. Heavysellingwithheavyvolume
c. Anewpricelownotseeninalongtime
d. Alloftheabove
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145. AbreakawaygapUSUALLY:
a. Occursduringtheaccumulationphaseofamarketcycle
b. Signalsthebeginningofanimportantpricemove
c. Providesamajordivergencesignal
d. Occursattheendofanimportantpricemove
146. PricecyclesareNORMALLYmeasuredby:
a. Theiramplitude
b. Theirperiod
c. Theirphase
d. Alloftheabove
147. Duringaconsolidation,priceactionNORMALLY:
a. Reversesdecisivelyinonedirectiononheavyvolume
b. Moveswithinwelldefinedneutralboundariesonmoderatevolume
c. Retracesonethirdofitspreviouspricemovement
d. Divergesfromvolume
148. ContraryopinionisUSUALLY:
a. Ignored
b. Measuredbyobservingpricecyclesandvolumepatterns
c. Consideredtobeagaugeofinvestorpsychology
d. Abullishindicator
149. AbasicPointandfigurebuysignalis:
a. AsecondsuccessfulattemptwheretheXbreaksabovethepreviouscolumnofXs
b. ArallyprintingaseriesofnewXhighs
c. Formationsofsymmetricaltriangles
d. Noneoftheabove
150. Thetargetforarectanglecanbecalculatedby
a. Usingthewidthoftherectanglemultipliedbythedurationofthemove
b. Usingthenumberoftimestheresistance/supportweretouchedmultipliedbythewidthofthe
formation
c. Addingtheheightoftheformationtothebreakoutprice
d. Addingthepullbacktothebreakoutprice
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CMTLevel1SampleQuestionsAnswerSheet
1. CyclesareGENERALLYmeasured
b.Lowtolow
2. Thiscycleprinciplestates,asstocksgothroughsimilarcyclesthesizeandmagnitudewilldiffer
b.Variation
3. WhichwouldbetheMOSTusefulaspectofacycleinstudyingtherelationshipbetweencyclesof
differentlengths?
a.Phase
4. Inregardstocycleanalysis,translationis:
c.Usefulincheckingwherethetrenddirectionisheadedorifitischanging
5. AcompleteElliottwavecycleismadeupofhowmanywaves?
c.8
6. Inanormal5waveElliottimpulsewave,whichwaveisUSUALLYexpectedtobethelongestandmost
dynamic?
a.3rd
7. Whenanalyzinglongtermpricemovements,itcouldbehelpfultousewhichtypeofchart?
b.Logarithmicchart
8. WhichofthefollowingwouldLEASTlikelybeacontinuationpattern?
a.Broadeningformation
9. WhichofthefollowingwouldNOTbeconsideredasupportlevel?
d.Alltheaboveareconsideredtobesupportlevels
10. AccordingtotheDowTheory,secondarycorrectionscanbereplacedbya:
b.Line
11. WhichofthefollowingwouldbetheLEASTimportantfactorindeterminingthesignificanceofatrend
line?
b.Distancefromprice
12. For a breakout or breakdown from a triangle to be considered valid it should occur no more than
_________________ of the distance to the apex from the beginning of the pattern?
c.Threequarters
13. WhatisindicatedwhenBollingerBandsnarrow?
d.Astocksvolatilityhasdecreased
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P a g e 31
14. WhichofthefollowingisNOTtrueaboutgaps?
c.Gapsarealwaysfilled
15. WhichBESTcharacterizescontinuationpatterns?
a.Thereissidewayspriceaction
16. WhichisNOTtrueofaparabolicblowoff?
d.Theyareeasytoidentify
17. InorderforaDowTheorysellsignaltobeconfirmed:
d.bandc
18. TheDowTheoryusesONLY:
c.Closingprices
19. Acompanywhosestockisinawellestablisheduptrendreportsearningsslightlyaboveconsensus
estimates.Afteraninitialrally,thestockthenendslowerontheday.Thiswouldprobablybean
exampleof:
b.Marketdiscounting
20. PointandfigurechartsareLEASTsuitedto:
b.Identifyingareasofaccumulationordistribution
21. Inadojicandlestick:
c.Supplyanddemandareinbalance
22. WhichofthefollowingisaFibonacciratio?
a.50%
23. Whenusingamovingaveragecrossoversystemtogeneratebuy/sellsignals,aSELLsignalwouldbe
generatedwhen:
c.Thefastfallsbelowtheslow
24. MovingaveragesareofLEASTuseingeneratingbuyorsellsignalsin:
a.Asidewaystrend
25. Astocktradesinarangebetween51and55for10daysandthenmoveshigher.Ifyouhavebeen
chartingthestockwitha3boxreversalpointandfigurechart,with2pointsassignedperbox,what
wouldthehorizontalcountbe?
d.Therewouldbenocount
26. WhichofthefollowingisUSUALLYassociatedwithmajormarkettops?
c.Broadeningformations
27. Onbalancevolumeisusedto:
d.Alltheabove
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28. Commonfiltersusedtoconfirmatrendlinebreakinclude:
d.Alltheabove
29. Thelengthofaminortrendis:
b.Upto6weeks
30. Asageneralrule,inrectangle,triangle,flagandpennantpatterns,volumegenerally:
b.Decreasesasthepatterndevelops
31. WhichtypeofgapisLEASTlikelytobefilledwhenitoccurswithhighvolume?
b.Breakaway
32. TrendsareMORELIKELYtopersistthanreverse.
c.Inallmarkets
33. Oneofthegreatstrengthsoftechnicalanalysisisits___________(canbeappliedtomanydifferent
marketsandtimeframes)
a.Flexibility
34. Trendlinesshould___________beredrawntoaccommodateanacceleratingtrend.
b.Generally
35. WhichofthefollowingisNOTanimportantuseforanoscillator?
c.Providesamethodofevaluatingtheperformanceofasecurityrelativetoanothersecurityorindex
36. WhichofthefollowingpercentageparametersisNOTawidelyrecognizedpercentageretracement?
b.45%
37. AnMTAEthicsinvestigationconcludesthattheaccusedMemberisdeclaredinnocentofanycharge.
ThecomplainanthadsimultaneouslyfiledthecomplaintwithaStateAgencythatdecidedthatthe
Memberisguilty.TheMTArulingstands.
b.False
38. JaneDoeisaMemberandtheCEOofherowninvestmenttradingfirm.SheisallowedtousetheMTA
Directorytosendemailstopromotehernewbook.
b.False
39. ItisacceptableforaMembertopublishtechnicallyderivedviewsoffuturesecuritypricesbehavior
reflectingforeknowledge.
b.False
40. Membersmaymakestatementsconcerningnewmethodsoftechnicalanalysisprovidedsuch
modificationsofexistingconceptsarefullydocumented.
a.True
41. AnewproprietarymethodinthefieldoftechnicalanalysisisintroducedbyaMember.Itisnot
necessarytodocumenttheprocedureandrationalesupportingthenewmethodbecausethe
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P a g e 33
informationisproprietary.
b.False
42. Inatechnicaldebate,aMemberdisparagestheanalyticalworkofanotherpanelist.Thereisaviolation
oftheCodeofEthics.
a.True
43. Membersareabletoactonnonpublicinformation.
b.False
44. AMemberwritesanarticlethatincludesadeceasedauthorsoriginalwork.TheMemberneedsto
obtainpermissionfromtheauthorsestateforpublication.
b.False
45. Whatisintermarketanalysis?
a.Studyoftheinterrelationshipsbetweenthevariousindependentfinancialmarkets
46. Thesecondarytrendismeasuredin_______andtheintermediatetrendismeasuredin_______.
b.Weeksormonths;weeksormonths
47. Whichofthefollowingisacharacteristicofatrend?
b.Anytrendisinfluencedbyitsnextlargerandsmallertrend
48. TheDirectionalIndicatorcanbedefinedas:
c.Twolinestrackinghigherhighsandlowerlowstodeterminetrend
49. WhichofthefollowingisFALSE?
c.Thelongerthetrend,thelesssignificantthebreakout
50. Adescendingtriangle:
c.Hasafallingresistancelineandahorizontalsupportline
51. Howwouldyouuserelativestrengthanalysiswhencomparingsectors?
c.Dividethepriceofonesectorbyanindustrybenchmarkandcompare
52. Toincreasethesensitivityofa5x3pointandfigurechart,onewould
b.Decreasetheboxsize
53. Inpointandfigurecharting,theabilitytoobtainpriceobjectivesthroughuseofthehorizontalcountis
aprincipaladvantageofthe
a.Oneboxreversalchart
54. InwhatchartingtechniquewilltrendlinesONLYbedrawnat45degreeangles?
d.Simplifiedthreeboxpointandfigurecharts
55. WhichpatternisNOTfoundinaPointandFigurechart?
c.Bullishengulfingpattern
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56. Whatpatternisfoundinpointandfigurecharts?
b.Headandshoulders
57. Usingintraday1x1pointandfigurecharts,whichbreakoutisMOSTsignificant?
c.Abreakoutfroma15columncongestionzone
58. YouareupdatingPointandFigurecharts.Theyareoneboxreversalcharts($1boxsize)andthecurrent
columnhas4Xs.Themostrecentpostingis$40.Thestockclosedyesterdayat$40.50.Today,the
stockopenedat$40.60,ranupto$40.95,andclosedatthelowforthedayat$39.11.HowmanyNEW
postingswillyoubemakingonthecharttoreflecttodaystrading?
a.0
59. Whichofthefollowingisacharacteristicoflogarithmicscales?
c.Theyarepreferredoverarithmeticscalingforlongtermtrendanalysis
60. Pointandfigurechartsarenamed?
d.Accordingtotheirboxandreversalsize
61. Youareupdatingpointandfigurecharts.Theyare5x1charts.Themostrecentpostingis$75.Thedays
tradingbeginsat$75.55.Arallyensuesthattakesthestockuptothedayshighof$77.88.Adecline
setsinfortherestofthedayandthestockclosesatthelowof$71.23.Howmanypostingswillyou
makeonthechart?
a.0
62. CyclesareUSUALLYmeasuredfrom:
b.Troughtotrough
63. 10daycyclesareBESTtimedwith:
a.5dayoscillators
64. WhichofthefollowingisNOTtrue
c.PrincipleofProportionalitystatesacycleofsimilardurationexistseverywhereinthemarket
65. ThefollowingisNOTcommonofreversalpatterns:
c.Topsusuallytakelongertoformthanbottoms
66. Aninverseheadandshoulderspatternis:
c.Reversalpattern
67. TheMAXIMUMobjectiveofreversalpatternsis:
d.100%retracement
68. Moderncomputertechnologyhasdemonstratedthatpricesarenotnecessarilyrandom,butalsothat
theyarenotperfectlypredictable.
d.Alloftheabove
69. Whichofthefollowingareconsideredadvantagestotradingfutures?
a.Futuresdonotrequireanupticktoshort
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P a g e 35
70. WhichisTRUEofdoubletops:
d.Heightisoftenusedasameasuringobjective
71. Ofthefollowing,whichareNOTcorrectstatementsconcerningreversalpatterns?
a.2and4
72. Whichofthefollowingdescribesanequallyweightedaverage?
a.Aninvestorinveststhesamedollaramountineachsecurity
73. Areasonablepriceobjectiveonceastockhascompletedaheadandshoulderspatternis:
c.Equivalenttothedistancebetweentheheadandneckline
74. Acontinuationpatternis:
d.Alloftheabove
75. Asymmetricaltriangleis:
d.Alloftheabove
76. Theapexofatriangularpatternis:
d.Alloftheabove
77. Volumeshoulddiminishduringthepriceswingswithinatriangularpattern.
a.True
78. Thebreakoutfromatriangleformation:
d.Alloftheabove
79. ThedescendingtriangleisjustamirrorimageoftheascendingtriangleandisGENERALLYconsidereda
______pattern
d.bandc
80. AllofthefollowingaretrueofflagandpennantpatternsEXCEPT:
d.Theyarereversalpatterns
81. ThemeasuringtechniqueforMOSTcontinuationpatternsimpliesthatapriceobjectivefromthe
breakoutpointisequaltothe____ofthepatternatitsbroadestpoint.
b.Height
82. Thereversalpatternthatcanalsoappearasacontinuationpatternis:
b.Headandshoulders
83. WhichBESTdescribescontinuationpatterns?
c.Theyarerepresentedbysidewayspriceaction
84. Stocktradersrelyheavilyon:
d.bandc
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85. Thesimplemovingaverage:
a.Givesequalweighttoeachperiodsprice
86. Channelbreakoutsystemworksextremelywellin:
d.aandc
87. Themovingaverage:
d.Alloftheabove
88. Thecrossovermethodrefersto:
c.Abuyorsellsignalgeneratedwhenashortermovingaveragecrossesalongermovingaverage
89. TheMOSTcommonlyusedpricetocalculatethemovingaverageisthe:
d.Close
90. Ina10daysimplemovingaverage,eachdayspriceisassignedaweightingof:
c.10%
91. Whichmovingaverage(s)assignGREATERweighttothemostrecentdata?
d.bandc
92. Longertermmovingaverages:
d.aandc
93. Amovingaverage:
a.Isasmoothingdevice
94. Shortermovingaverages:
a.Producemoretrades
95. Tohelpconfirmapricetrend,volumeshouldexpand:
c.Inthedirectionofthetrend
96. Volumedivergenceoccurswhen:
c.Anewhighinanuptrendtakesplaceondecliningvolume
97. Onaheadandshoulderstop,theheadistypicallymadeon:
b.Lightvolume
98. Volumeinaheadandshoulderspatternisusuallyhighestwhere?
d.Duringtheleftshoulder
99. Trianglepricepatternsshouldbeaccompaniedby:
c.Agradualdropoffinvolumeuntilthebreakout
100. Techniciansbelievethat:
b.Volumeprecedesprice
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P a g e 37
101. Asellingclimax:
b.Typicallyoccursatamarketbottom
102. Openinterestis:
b.Thenumberofoutstandingcontractsinanygivenday
103. Acandlestickwithequalopeningandclosingprices
d.Doji
104. ThePRIMARYuseofacandlestickpatternisto:
c.Strengthenthepossibilityofareversalorcontinuationofapricetrend
105. Allthefollowingaremomentumoscillatorsexcept:
a.Advance/declineline
106. Whichisanexampleofcandlepatternfiltering?
c.Usingwesterntechniquestoconfirmacandlepattern
107. Whichtoolscouldyouuseincandlepatternfiltering?
c.RSIandMACD
108. Inanalyzingastockusingadailychart,itisBESTtouse:
a.Aperiodoftimebetweensixtotwelvemonths
109. Thelimitedlifefeatureofthecontractsposessomeproblemsforfuturestraderswhichstocktraders
donotface.Thisisdueto:
b.Theaveragefuturescontracthasatradinglifeofaboutayearandahalfonly
110. WhichofthefollowingstatementsareCORRECT?
b.1and2
111. Forafuturescontract,dailyvolumerepresents:
c.Thenumberofcontractstradedduringtheday
112. Flowoffundanalysisreliesinpart:
d.Onmeasuringthecashpositionofdifferentinvestorgroups
113. TheaboveNASDAQmonthlychartisshowingamaindowntrend.Themonthlabeled(A)hadan
importantimpactontheensuingdecline.Thisformationcorrespondstoasimilarformationonthe
dailychartcalled:
a.Keyreversalday
114. ThechartbelowisaweeklychartofGAP.TheclosingpriceinthebarlabeledAisthecloseof:
a.Fridayclosecorrespondingtotheendoftheweek
115. AboveisamonthlychartofBurlingtonResources.Wheredoesmainresistancelie?
c.53.5
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116. BelowisamonthlychartofCitigroupwhichshows:
d.Thestockviolatedamainuptrendlineandisreversing
117. TheabovechartshowsEliLillyweeklyfrom1995till2001.TherearethreetrendlineslabeledA,Band
C.WhichisTRUE?
d.bandconly
118. Inthechartbelow,theareahighlightedbytherectangleis:
c.Atriplebottom
119. Thereversalpatterninthechartaboveisa:
c.DoubleTop
120. Inthechartbelow,thereversalpatternisconsideredtohavecompletedwhen:
a.Priceclosesbelow19
121. Inthechartabove,thepatternabovethedashedlineisa:
d.Headandshoulders
122. Inthechartbelow,whatistheexpectedMINIMUMpricetargetafterthepatterncompletes?
c.26
123. Inthechartabove,thepatternissaidtohavecompletedwhenprice:
c.Closedbelow51volumeisimportant,butnotcritical
124. Inthechartbelow,ifthepatterntracingitselfoutbetweenOctoberandFebruarycompletes,the
expectedMINIMUMpriceobjectiveis:
b.Approximately1830
125. Intheabovechart,thepatterntracedoutinthecircledareais:
d.Invertedheadandshoulders
126. Forafuturescontract,dailyvolumerepresents:
c.Thenumberofcontractstradedduringtheday
127. Flowoffundanalysisreliesinpart:
d.Onmeasuringthecashpositionofdifferentinvestorgroups
128. Amomentumindexmeasures:
c.Therateofchangeofprices
129. Amovingaverage:
d.Isconstructedbytotalingasetofdataanddividingthattotalbythenumberofobservations
130. TheobjectiveoftheDowTheoryistodetermine:
c.Theprimarydirectionofthestockmarket
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P a g e 39
131. OscillatorsareNORMALLYusedto:
a.Identifyoverboughtoroversoldmarketconditions
132. APointandFigurechart:
a.Ignorestime
133. OnedisadvantagetoPointandFigurechartsisthatsomeformationsthatwouldappearonabarchart
donotappearonPointandFigurecharts.Whichofthefollowingcouldoneidentifyusingathreepoint
reversalPointandFigurechart?
d.Noneoftheabove
134. Relativestrengthanalysis,asappliedinequityanalysisrelates:
c.Changesinsecuritypricesinrelationtoothersecurityprices,grouppriceindicesormarketaction
135. Theresistancelevelofapricetrendrefersto:
b.Theleveloverthemarketwheresellingpressureissufficientlystrongtoovercomebuyingpressure
andapriceadvanceisexpectedtobeturnedback
136. Thesupportlevelofapricetrendrefersto:
d.Theareaunderthemarketwherebuyinginterestissufficientlystrongtoovercomesellingpressure
andpricedeclineisexpectedtobereversed
137. Tomeasureanoverboughtoroversoldmarketlevel,atechnicalanalystwouldNORMALLY:
c.Useoneormorepriceoscillators
138. OscillatorsareNORMALLYusedto:
c.Measurepricemomentum
139. Theadvancedeclinelineisusedtoindicate:
a.Ifthemajorityofstocksinthemarketareactinginconcertwiththemajoraverages
140. AccumulationNORMALLYoccurs:
a.Nearamarketbottom
141. TheKondratieffcycleextendsforaperiodofabout:
d.54years
142. ThePublic/SpecialistShortSalesRatioisusedasatoolthat:
a.Showsthedifferencebetweensophisticatedmoneyandunsophisticatedmoney
143. Blowoffsareidentified:
b.Byobservingasharprallyinpricesafteralongadvanceaccompaniedbyasharpincreaseintrading
activity
144. Asellingclimaxisidentified:
d.Alloftheabove
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C M T L e v e l 1 S a m p l e Q u e s t i o n s
145. AbreakawaygapUSUALLY:
b.Signalsthebeginningofanimportantpricemove
146. PricecyclesareNORMALLYmeasuredby:
d.Alloftheabove
147. Duringaconsolidation,priceactionNORMALLY:
b.Moveswithinwelldefinedneutralboundariesonmoderateorlessthanmoderatevolume
148. ContraryopinionisUSUALLY:
c.Consideredtobeagaugeofinvestorpsychology
149. AbasicPointandfigurebuysignalis:
a.AsecondsuccessfulattemptwheretheXbreaksabovethepreviouscolumnofXs
150. Thetargetforarectanglecanbecalculatedby
c.Addingtheheightoftheformationtothebreakoutprice
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