LV 1 Sample 3

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Panel Discussions (Archives) Noted Market Technicians (Biographies) Career Development CMT Prep Materials Journal of Technical Analysis Dow Award 2. Chart Types 3. Chart Patterns 4. Cycle Analysis 5. Sentiment (Behavioral Finance) 6. Flow of Funds 7. Intermarket Analysis 8. Trading Investing Strategies 9. Statistics 10. Indicator Analysis (Trend and Momentum)
CMT Level 1 Sample Quiz Questions (Set 3)

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Submit Additional Information Tags: CMT, CMT Exam, CMT Quiz Cards, CMT Sample Quiz Questions, Quiz Cards Visits: 5,532 During a consolidation, price action normally a. Reverses decisively in one direction on heavy volume b. Moves within well defined neutral boundaries on moderate or less than moderate volume c. Retraces one third of its previous price movement d. Diverges from volume Answer b. Moves within well defined neutral boundaries on moderate or less than moderate volume Reference: Edwards, Robert D. and Magee, John. Technical Analysis of Stock Trends, 9th Edition. Chapters 8 & 9 Contrary opinion is usually a. Ignored b. Measured by observing price cycles and volume patterns c. Considered to be a gauge of investor psychology d. A bullish indicator Answer c. Considered to be a gauge of investor psychology Reference: Pring, Martin J. Technical Analysis Explained. Chapter 26 Moving average crossovers can be used to indicate a. Buy and sell signals b. Positive relative strength c. Negative volume d. Trend divergence
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Answer a. Buy and sell signals Reference: Pring, Martin J. Technical Analysis Explained. Chapter 9 Which of the following can be considered a sentiment indicator a. Specialist Short Sales Ratio b. Mutual Fund Cash/Asset Ratio c. Odd Lot Purchase/Sales Ratio d. All of the above Answer d. All of the above Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians Chapter 12 Speed resistance lines a. Divide a trend in thirds b. Measure the rate of ascent or descent of a trend c. Are used to measure percentage retracements d. All of the above Answer d. All of the above Reference: Edwards, Robert D. and Magee, John. Technical Analysis of Stock Trends, 9th Edition. Chapter 12 An exhaustion gap is observed a. In the beginning stage of a bear market b. After prices have moved sideways for an extended period of time c. Near the end of a major price move d. With light trading volume
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Answer c. Near the end of a major price move Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 11 On a daily bar chart a. Each days price action is represented by a vertical bar; the daily high, low and close are plotted b. Prices are plotted vertically, time horizontally c. The price scale may be either arithmetic or logarithmic d. All of the above Answer d. All of the above Reference: Pring, Martin J. Technical Analysis Explained. Chapter 10 An appropriate time interval selection for a bar chart which is designed to show very long-term trends would be a. Daily b. Weekly c. Monthly d. Annually Answer c. Monthly Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 23 Risk can be defined as: a. Variability of returns b. Amount of loss per trade c. Beta d. All of the above
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Answer d. All of the above Reference: du Plessis, Jeremy. The Definitive Guide to Point and Figure. Chapter 2 A point & figure chart DIFFERS from a bar chart as a. A new plot on a point and figure chart is made only when the price changes by a given amount b. Time intervals are clearly shown in a point and figure chart c. Point and figure charts are only concerned with measuring price momentum d. A new plot on a bar chart is made only when the price changes by a given amount Answer a. A new plot on a point and figure chart is made only when the price changes by a given amount Reference: du Plessis, Jeremy. The Definitive Guide to Point and Figure. Chapter 2 In constructing a point and figure chart, a new box is added ONLY when a. The price has moved by less than the specified box size b. The price has moved by equal to or more than the specified box size c. The volume confirms the price movement d. The price has moved to a new high Answer b. The price has moved by equal to or more than the specified box size Reference: du Plessis, Jeremy. The Definitive Guide to Point and Figure. Chapter 2 As the price unit of a reversal on a point and figure chart is decreased a. Time analysis becomes more critical for interpretation b. The detail of price movement graphically displayed is decreased c. The detail of price movement graphically displayed is increased d. The possibility of whipsaws decreases Answer c. The detail of price movement graphically displayed is increased
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Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 17 The body of the candlestick line displays the relationship between: a. The current sessions high and low b. The current sessions close and the prior sessions close c. The current sessions open and high d. The current sessions open and close Answer d. The current sessions open and close Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 17 The basic concept behind the use of a trendline is that a. Price and volume tend to confirm each other b. Prices rise and fall in cyclical patterns c. Prices follow a natural rhythm d. A trend in motion will remain in motion until it reverses Answer d. A trend in motion will remain in motion until it reverses Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 2 Technical analysts generally believe a. That trendline analysis cannot be applied to point and figure charts b. A price close beyond the trendline is more significant than an intra-day penetration c. Trendlines are useful for validation of price gaps d. Price whipsaws can be avoided using trendlines
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Answer b. A price close beyond the trendline is more significant than an intra-day penetration Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 2 In a head and shoulders pattern, volume usually a. Is greatest in the middle leg b. Increases with each successive peak c. Decreases with each successive peak d. Is constant throughout the pattern Answer c. Decreases with each successive peak Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 15 A simple moving average is often criticized because a. The most recent events are given extra weight b. The entire price time series is used in its calculation c. Equal weight is given to each point included in the calculation d. It is difficult to calculate Answer c. Equal weight is given to each point included in the calculation Reference: Pring, Martin J. Technical Analysis Explained. Chapter 9 An exponentially smoothed moving average a. Excludes older price points in the calculation b. Gives more weight to more recent observations c. Cannot be plotted on a bar chart d. None of the above
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Answer b. Gives more weight to more recent observations Reference: Pring, Martin J. Technical Analysis Explained. Chapter 9 Oscillators are used to alert the analyst to a. Volume divergences b. Continuation patterns c. Extended rallies d. Overbought or oversold price conditions Answer d. Overbought or oversold price conditions Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapters 8 and 18 All the following are momentum oscillators EXCEPT a. Advance/decline line b. Relative Strength Index (RSI) c. Stochastics d. Moving Average Convergence/Divergence (MACD) Answer a. Advance/decline line Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 18 Most oscillators are constructed a. So that the mid-point goes through zero b. On a semi-logscale to highlight momentum c. So that all points are positive in value d. Without an upper boundary
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Answer a. So that the mid-point goes through zero Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 18
Oscillators are MOST helpful to gauge price behavior in a. Sharply rising markets b. Sharply falling markets c. Sharply rising and sharply falling markets d. Non-trending markets where prices fluctuate in a well defined trading range Answer d. Non-trending markets where prices fluctuate in a well defined trading range Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 18 Oscillators are MOST valuable when a. They are confirmed by relative strength measures b. They are accelerating in trend c. Their value reaches an extreme reading near the upper or lower end of their boundaries d. Evaluated using multiple moving averages Answer c. Their value reaches an extreme reading near the upper or lower end of their boundaries Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 18 A typical momentum index is constructed by a. Plotting the change in price between the beginning and end of a time interval b. Plotting the difference in volume between the daily high price and the daily low price
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c. Plotting cumulative price between two points d. Connecting the boxes on a point and figure chart Answer a. Plotting the change in price between the beginning and end of a time interval Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 18 Violated support levels typically a. Become support levels as prices fall lower b. Are associated with declining price projections c. Become resistance levels on price bounces d. Indicate an imminent price reversal Answer c. Become resistance levels on price bounces Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 12 As with trendlines, speed resistance lines a. Can be used in conjunction with sentiment indicators b. Indicate the potential for immediate price reversals c. Must be confirmed with volume d. Reverse roles once they are broken Answer d. Reverse roles once they are broken Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 12 Which pairs are not similar?
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a. Stochastics = Williams b. RSI = MACD c. MACD = ROC d. None are similar Answer c. MACD = ROC Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 18 A rising relative strength line for a stock in a falling market indicates a. That price and volume are diverging b. That the stock is performing worse than the market c. That the stock is performing better than the market d. That the stocks price is rising despite the falling market Answer c. That the stock is performing better than the market Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 21 Which set of indicators would be MOST helpful in analyzing trading range markets? a. Moving averages b. Oscillators c. Cycles d. Elliott Wave Answer b. Oscillators Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 18
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The four year cycle, also known as the Presidential Cycle, realizes the best returns in the stock market to be a. Election and pre-election b. Mid-term and election c. Pre-election and post election d. Post election and mid-term Answer a. Election and pre-election Reference: Pring, Martin J. Technical Analysis Explained. Chapter 21 Which of the following indicators are used to measure market breadth? a. Cumulative breadth line b. Advance/decline ratio c. McClellan oscillator d. All of the above Answer d. All of the above Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 8 Which of the following is NOT an underlying assumption of technical analysis? a. Prices move in trends b. Price discounts everything c. The consensus is always wrong d. Supply and demand determines price Answer c. The consensus is always wrong Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 2
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Which of the following would NOT be considered a means of identifying a trend? a. Regression lines b. Trendlines c. Relative strength lines d. Moving averages Answer: c. Relative strength lines Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 12 When a stock breaks through the bottom of a down sloping standard deviation channel (around a regression line) a. The stock is oversold b. An acceleration of the trend may be about to occur c. It is at the limits of normal distribution d. Any of the above Answer: d. Any of the above Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 12 Moving averages tend to change direction well after a peak or trough in price and therefore are considered late in changing direction. Which of the following is generally considered the MOST effective way to offset this tendency to lag? a. Using a weighted moving average b. Using an unweighted moving average c. Using moving average crossovers d. None of the above Answer a. Using a weighted moving average Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians.
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Chapter 14 A descending triangle that forms in a downtrend would probably be considered a a. Reversal pattern b. Continuation pattern c. Either a or b d. Probably wouldnt be useful in forecasting the future direction of the trend Answer b. Continuation pattern Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 15 Which of the following is NOT true about volume? a. A rally that develops on declining volume is suspect b. A rally that occurs on rising volume points to a probable trend reversal c. Both price and volume can fall off sharply after a buying climax d. A downside break of a moving average or trendline should occur on heavy volume to qualify as a bearish signal Answer b. A rally that occurs on rising volume points to a probable trend reversal Reference: Pring, Martin J. Technical Analysis Explained. Chapters 22-23 Which of the following is LEAST reliable? a. Triangles b. Wedges c. Broadening Formations d. Pennants Answer a. Triangles
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Reference: Pring, Martin J. Technical Analysis Explained. Chapter 5 Which of the following is LEAST true of a doji pattern? a. It represents indecision b. It is usually a continuation pattern c. It is usually a reversal pattern d. The opening and closing prices are at identical levels Answer b. It is usually a continuation pattern Reference: Pring, Martin J. Technical Analysis Explained. Chapter 13 The January Effect is: a. As the S&P goes in January, so goes the year b. When small cap stocks are more likely to outperform the market c. Has not worked well in recent years d. B and C Answer d. B and C Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 9 In a 10-day rate of change indicator, if the latest (more recent) price is higher than the price 10 days ago a. The ratio would be greater than zero b. The ratio would be less than zero c. The ratio would be equal to zero d. The ratio would hold at a constant until the market changed trend Answer a. The ratio would be greater than zero
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Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 18 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 slow down d. Is a clear indication that the pace of the rally is about to accelerate Answer b. Indicates that the rally is strong and will probably carry further Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 18 Which statement is true of an uptrending market? a. Momentum indicators will tend to hit greater oversold extremes b. Momentum indicators will tend to stay overbought longer c. Momentum indicators will tend to hit greater overbought extremes than in a downtrending market d. b and c Answer d. b and c Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 8 Which would normally be considered a sentiment indicator that is MOST useful to traders? a. Corporate buy backs b. Price/earnings ratios c. Insider buying d. Put/call ratios
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Answer d. Put/call ratios Reference: Pring, Martin J. Technical Analysis Explained. Chapter 26 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. Point and figure charts d. Candlestick charts Answer c. Point and figure charts Reference: du Plessis, Jeremy. The Definitive Guide to Point and Figure. Chapters 1-2 Contrary opinion is a useful investment tool because a. The little guy is always wrong b. Traders are often most bearish near market tops c. Institutional investors have access to better information d. It is at turning points where people are wrong Answer d. It is at turning points where people are wrong Reference: Pring, Martin J. Technical Analysis Explained. Chapter 26 The longest-term trend in the market is the a. Primary b. Cyclical c. Secular d. None of the above Answer c. Secular
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Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians Chapter 21
Comments
Vinayak Parmar 8/11/11 @ 05:33 am The longest-term trend in the market is the SECULAR TREND Vinayak Parmar 8/11/11 @ 05:43 am THE JANUARY EFFECT IS WHERE SMALL CAP STOCKS WILL OUTPERFORM THE MARKETS AND THIS EFFECT HAS NOT WORKED IN RECENT YEARS Mahendra Singh 10/22/11 @ 02:31 am Which of the following is LEAST reliable? This page says Triangle, CMT sample test says Broadening formation. MAN TO LUK 5/1/12 @ 06:14 am Which of the following is LEAST reliable? Answer a. Triangles Reference: Pring, Martin J. Technical Analysis Explained. Chapter 5 Page 93 Sean Quinlan 10/19/12 @ 11:30 pm Both instances of the question and answer are correct; you need to read the questions more carefully. Triangles are least RELIABLE. Broadening formations are least USEFUL.
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LV 1 Sample 3

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9/9/13

MTA - Market Technicians Association

Search the Knowledge Base

MTA - Market Technicians Association

CMT Level 1 Sample Quiz Questions (Set 3)

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

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MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

MTA - Market Technicians Association

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