CMT CMT Market Cycles

Question 1

According to Dow Theory, which phase of a bull market is characterized by broad public participation and rising prices across all sectors?

Accepted Answer

Public participation phase

Answer

Accumulation phase

Answer

Distribution phase

Answer

Capitulation phase

Question 2

Elliott Wave Theory posits that market prices move in a pattern of how many waves in the direction of the main trend?

Accepted Answer

5

Answer

3

Answer

7

Answer

8

Question 3

In Dow Theory, a 'secondary reaction' in a bull market is best described as:

Accepted Answer

A short-term correction of one-third to two-thirds of the prior primary move

Answer

A permanent reversal of the primary trend

Answer

A continuation pattern confirming the uptrend

Answer

A sideways consolidation lasting less than three weeks

Question 4

The Kondratieff Wave (K-Wave) cycle is associated with an approximate period of:

Accepted Answer

50–60 years

Answer

4 years

Answer

10 years

Answer

18 years

Question 5

The presidential election cycle theory suggests that US equity markets tend to perform best during which year of the four-year presidential cycle?

Accepted Answer

Third year (pre-election)

Answer

First year after election

Answer

Second year (mid-term)

Answer

Fourth year (election year)

Question 6

In Elliott Wave Theory, corrective waves are labeled with:

Accepted Answer

Letters A, B, C

Answer

Numbers 1 through 5

Answer

Roman numerals I through V

Answer

Greek letters alpha, beta, gamma