CMT CMT Market Cycles 2

Question 1

The Hurst Cycle model primarily focuses on identifying:

Accepted Answer

Nested cycles of varying periodicity in price data

Answer

J.M. Hurst's cycle model identifies nested cycles of different lengths in price data, using the principle that cycles are harmonically related and synchronize at troughs.

Question 2

In market cycle analysis, the 'four-year cycle' in US equities is most associated with:

Accepted Answer

The presidential/business cycle

Answer

The four-year US equity cycle is closely associated with the presidential and business cycle, driven by policy stimulus and economic expansion and contraction rhythms.

Question 3

According to Dow Theory, what is required for a primary trend signal in equities to be considered confirmed?

Accepted Answer

Both the DJIA and the Dow Jones Transportation Average must confirm each other

Answer

Dow Theory requires both the DJIA and the DJTA to confirm a primary trend signal, as divergence between the two averages casts doubt on the trend's validity.

Question 4

In Elliott Wave Theory, which wave within an impulse sequence is typically the longest and strongest?

Accepted Answer

Wave 3

Answer

Wave 3 is almost always the longest and most powerful impulse wave, characterized by broad market participation, high momentum, and strong fundamental confirmation.

Question 5

The seasonal tendency for US equity markets to perform well from November through April is known as:

Accepted Answer

The Halloween Indicator

Answer

The Halloween Indicator (or 'Sell in May and Go Away') refers to the historical tendency for equities to perform better from November through April than from May through October.

CMT - Chartered Market Technician Practice Test

CMT - Chartered Market Technician Practice Test

CMT CMT Market Cycles 2