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Sample Questions

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:
MarketTechniciansAssociation,Inc.,
61Broadway,Suite514
NewYork,NY10006
Allmaterialisbelievedtobereliableattimeofpublication,butnotguaranteed.The
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omissions.

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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C M T L e v e l 1 S a m p l e Q u e s t i o n s

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P a g e 21

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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C M T L e v e l 1 S a m p l e Q u e s t i o n s

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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C M T L e v e l 1 S a m p l e Q u e s t i o n s

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 M T L e v e l 1 S a m p l e Q u e s t i o n s

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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P a g e 29

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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C M T L e v e l 1 S a m p l e Q u e s t i o n s

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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C M T L e v e l 1 S a m p l e Q u e s t i o n s

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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C M T L e v e l 1 S a m p l e Q u e s t i o n s

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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C M T L e v e l 1 S a m p l e Q u e s t i o n s

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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C M T L e v e l 1 S a m p l e Q u e s t i o n s

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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