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MTA.org CMT Program CMT Institute Knowledge Base Volume 1, Issue 10View a Printer Friendly Version of this NewsletterSpecial Edition CMT Level 3 Issue!Letter from the EditorIn case you are wondering why the CMT 3 exam registration closes afull week before the CMT 1 and CMT 2 exam registration windowcloses, the reason is simple: it takes time for Prometric to send thechart books to each exam center. Prometric needs to know in advancewhere the chart books are to be sent as well as to know how many tosend to each center.What you should find at the exam center:Each CMT 3 candidate will be given a paper chart book at the exam center. The charts are bothon screen and in a chart book. If you do not receive a chart book at your exam center, please alertthe proctor that you are to be given a chart book. If one is not available, call Marie Penza(646.652.3300) at the office to reschedule your exam. If you choose to take the exam without thepaper chart book you may do so. However, I do not advise you to do that. We provide the chartbooks to Prometric and they send them to the exam centers. Obviously you cannot draw lines onthe electronic version of the exam chart book; however, you may draw and write on the paperchart books. Graders will not see the paper chart books because they are shredded after youruse. Regarding other items allowed at the exam, you may bring both a simple calculator and aruler. Again, if you are not allowed to do so, please call the office to reschedule the exam. Asimple calculator is on the exam screen for your use.As the CMT 3 registration is now closed, I have elected to devote this newsletter exclusively forCMT 3 candidates but have sent it to all candidates for future reference.- Jeanette Young, CMT, CFPCMT Program Directorjeanette@mta.orgAdministrative NotesDon't Miss Out!REGISTRATION FOR CMT LEVELS 1 &2 CLOSES ON APRIL 23RD!Sign up today to ensure yourpreferred time, date, and location!Contact Marie Penza, 646-652-3300,for information on the CMT Programand/or if you're having troublescheduling your exam for Prometric.For detailed instructions on how youcan register online, please click here .Test DatesThe Spring 2010 CMT Exams will beheld from April 29, 2010 through May8, 2010.Registration Closing DatesHave a Question?I am available for your questions and suggestions! Please send questions that you would likeanswered to me at: jeanette@mta.org. I am also available for immediate questions by phone at646-652-3300. If I don't post the answer here for all to see, rest assured I will answer them directlywith you by e-mail.Registration for Levels 1 and 2 closeson April 23, 2010.Recommended Reading Lists• CMT Exam Level 1• CMT Exam Level 2• CMT Exam Level 3Ask the DirectorGuide to Sponsorship:Attend the Symposium!Many MTA Affiliates often ask me forhelp identifying sponsors. Aside from

Practice, Practice, Practice:Sample Questions with the Correct AnswerCMT Exam Level 3Discuss what, if any, ethical violations may have occurred.Henry McAdams, a member of the Market Technicians Association, is a staff technical analyst atthe Wavertree Fund, where he has been employed for more than five years. He is part of a largerteam that is comprised of three analysts and support staff. The firm employs 25 people but therehave been rumors that it may be sold to a larger bank, which already has a technical analysisteam. Henry has been reviewing charts for his daily comment. While doing so, he notices a chartthat he believes is attractive. Henry immediately goes out and establishes a position in his ownaccount.1. Two weeks later, the chart still looks attractive. The fundamental analyst at Wavertreereiterates his buy on the stock and Henry writes a technical opinion based on his researchwithout disclosing his personal position.This is a violation of Rule 1.2. Within the last three months, Henry has received notification that he has passed Level 3and is now entitled to the CMT designation. However, he has not made any changes onhis templatesThis is a violation of Rule 9.3. Henry’s brother-in-law Joe is a software developer with a major company. Joe and a fewothers have begun a start-up that provides intra-day services to research analysts. Joewants to borrow the MTA directory so that he can prospect the membership.This is a violation of Rule 1.4. Henry’s colleague Mark has had a great deal of success with a new trading system that hehas been using for about two weeks. When pressed to see exactly how this new systemworks, Mark responds, “I know it’s going to work, just trust me.”This is a violation of Rule 3.5. At the same time, Mark contributes a piece to Henry’s letter. In it, Mark has a lengthy anddetailed discussion about an arcane topic. Henry recognizes some of the passages in it aspart of an out-of-print book on the subject, but Mark gives no attributions.This is a violation of Rule 8.6. While looking through the Wall Street Journal, Henry notices that one of the analysts fromthe potentially acquiring bank is quoted as making a comment that is contrary to Henry’spublished opinion. “What chart is that guy looking at? He must be blind!” Henry asks, “Thatguy is so inept, he couldn’t pick a buy idea if it came up and bit him.”This is a violation of Rule 4.7. A reporter from the New York Times calls and speaks with Henry to verify if it is true thatthe Director of Wavertree is currently involved in a messy divorce from his socialite wifeand will need to liquidate his holdings in Wavertree fund to pay the alimony. Henrydiscussed the matter with the reporter.This is a violation of Rule 6.8. Based on technical deterioration in chart patterns along with the need to raise funds topurchase a house, Henry has decided to liquidate the position he established earlier. In aneffort to squeeze out every cent that he possibly could, Henry publishes a bullish opinionon the stock. Six hours later, he enters a market order to sell.This is a violation of Rules 2 and 7.

CMT Exam Level 3Answer: Relative strength is a measurement of a security price movement versus some othersecurity, industry or index. It is used to determine how a security is performing relative tosomething else. (1pt) It can be used as a confirmation indicator. (2Pts.)Relative Strength Index (RSI) measures a security’s momentum against itself. It is used todetermine whether or not a security is overbought or oversold, trending in a bull or bear marketversus behaving in more of a trading range environment, and it can be used as a confirmation tool.(3Pts)Opt out of receiving this type of mailing from the Market Technicians AssociationContact Us | Advertising Rates | MTA Educational Foundation | Site Map© 2010 Market Technicians Association, Inc. 61 Broadway, Suite 514. New York, NY 10006. Phone: 646-652-3300. Fax: 646-652-3322