CMT Level 1 - Sample Questions (Chartered Market Technician - Level 1) with Complete Solutions
Cycles are GENERALLY measured
a. High to low
b. Low to low c. High to high
d. Either b or c - ANSWER-Answer: b. Low to low
Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 19.
This cycle principle states as stocks go through similar cycles, the size and magnitude will differ.
a. Commonality
b. Variation
c. Summation
d. Proportionality - ANSWER-Answer: b. Variation
Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 19.
In regards to cycle analysis, translation is:
a. Distance between troughs
b. Distance between peaks c. Useful in checking where the trend direction is headed or if it is changing
d. To the left when the peak is beyond the halfway point - ANSWER-Answer: c. Useful in checking where the trend direction is headed or if it is changing
Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 19.
Which would be the MOST useful aspect of a cycle in studying the relationship between
cycles of different lengths?
a. Phase b. Period
c. Amplitude d. None of the above - ANSWER-Answer: a. Phase
Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 19.
A complete Elliott wave cycle is made up of how many waves?
a. 5
b. 3
c. 8 d. 13 - ANSWER-Answer: c. 8
Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 20.
When analyzing long term price movements, it could be helpful to use which type of chart?
a. Candle chart
b. Logarithmic chart
c. Bar chart d. Point and figure chart - ANSWER-Answer: b. Logarithmic chart
Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 11.
In a normal 5-wave Elliott impulse wave, which wave is USUALLY expected to be the longest and most dynamic?
a. 3rd b. 5th
c. 1st
d. 1st but sometimes 3rd - ANSWER-Answer: a. 3rd
Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 20.
Which of the following would MOST likely be a continuation pattern?
a. Engulfing pattern b. Head and shoulders
c. Double bottom
d. Flag - ANSWER-Answer: d. Flag
Reference: Edwards, Robert D. and Magee, John, Technical Analysis of Stock Trends, 9th Edition. Chapter 11. Which of the following would NOT be considered a support level?
a. Previous high
b. Previous low
c. Trading range
d. All the above are considered to be support levels - ANSWER-Answer: d. All the above are considered to be support levels
Reference: Edwards, Robert D. and Magee, John, Technical Analysis of Stock Trends, 9th Edition. Chapter 13.
According to Robert Rhea's hypotheses:
I. The primary trend is inviolate
II. The averages discount everything
III. Dow Theory is not infallible
IV. Dow Theory is predictable
a. I and II
b. I and III
c. I, II, and III
d. I, II, III, and IV - ANSWER-Answer: c. I, II, and III
Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 6.
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?
a. One-half
b. Two-thirds
c. Three-quarters d. Five-sixths - ANSWER-Answer: c. Three-quarters
Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 15.
What is indicated when Bollinger Bands narrow?
a. A stock is ready for a rally
b. A stock is ready for a decline
c. A stock's volatility has increased
d. A stock's volatility has decreased - ANSWER-Answer: d. A stock's volatility has decreased Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 14.
In the Dow Theory, the MOST important price is the
a. Open
b. High
c. Low
d. Close - ANSWER-Answer: d. Close
Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 6.
Which is/are considered important in determining the validity of a trendline break?
a. Time
b. Price
c. Volume
d. All of the above - ANSWER-Answer: d. All the above
Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 13.
Which BEST characterizes continuation patterns?
a. There is sideways price action b. They take a long time to form
c. They usually represent long-term patterns
d. They signal the start of a new trend - ANSWER-Answer: a. There is sideways price action
Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 17.
Which is NOT true of a buying climax?
a. Prices fall sharply at first b. Volume is very heavy
c. The close is near the low end of the daily range
d. Prices initially rise sharply - ANSWER-Answer: a. Prices fall sharply at first
Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 15.
In order for a Dow Theory sell signal to be confirmed
Cycles are GENERALLY measured
a. High to low
b. Low to low c. High to high
d. Either b or c - ANSWER-Answer: b. Low to low
Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 19.
This cycle principle states as stocks go through similar cycles, the size and magnitude will differ.
a. Commonality
b. Variation
c. Summation
d. Proportionality - ANSWER-Answer: b. Variation
Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 19.
In regards to cycle analysis, translation is:
a. Distance between troughs
b. Distance between peaks c. Useful in checking where the trend direction is headed or if it is changing
d. To the left when the peak is beyond the halfway point - ANSWER-Answer: c. Useful in checking where the trend direction is headed or if it is changing
Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 19.
Which would be the MOST useful aspect of a cycle in studying the relationship between
cycles of different lengths?
a. Phase b. Period
c. Amplitude d. None of the above - ANSWER-Answer: a. Phase
Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 19.
A complete Elliott wave cycle is made up of how many waves?
a. 5
b. 3
c. 8 d. 13 - ANSWER-Answer: c. 8
Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 20.
When analyzing long term price movements, it could be helpful to use which type of chart?
a. Candle chart
b. Logarithmic chart
c. Bar chart d. Point and figure chart - ANSWER-Answer: b. Logarithmic chart
Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 11.
In a normal 5-wave Elliott impulse wave, which wave is USUALLY expected to be the longest and most dynamic?
a. 3rd b. 5th
c. 1st
d. 1st but sometimes 3rd - ANSWER-Answer: a. 3rd
Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 20.
Which of the following would MOST likely be a continuation pattern?
a. Engulfing pattern b. Head and shoulders
c. Double bottom
d. Flag - ANSWER-Answer: d. Flag
Reference: Edwards, Robert D. and Magee, John, Technical Analysis of Stock Trends, 9th Edition. Chapter 11. Which of the following would NOT be considered a support level?
a. Previous high
b. Previous low
c. Trading range
d. All the above are considered to be support levels - ANSWER-Answer: d. All the above are considered to be support levels
Reference: Edwards, Robert D. and Magee, John, Technical Analysis of Stock Trends, 9th Edition. Chapter 13.
According to Robert Rhea's hypotheses:
I. The primary trend is inviolate
II. The averages discount everything
III. Dow Theory is not infallible
IV. Dow Theory is predictable
a. I and II
b. I and III
c. I, II, and III
d. I, II, III, and IV - ANSWER-Answer: c. I, II, and III
Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 6.
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?
a. One-half
b. Two-thirds
c. Three-quarters d. Five-sixths - ANSWER-Answer: c. Three-quarters
Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 15.
What is indicated when Bollinger Bands narrow?
a. A stock is ready for a rally
b. A stock is ready for a decline
c. A stock's volatility has increased
d. A stock's volatility has decreased - ANSWER-Answer: d. A stock's volatility has decreased Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 14.
In the Dow Theory, the MOST important price is the
a. Open
b. High
c. Low
d. Close - ANSWER-Answer: d. Close
Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 6.
Which is/are considered important in determining the validity of a trendline break?
a. Time
b. Price
c. Volume
d. All of the above - ANSWER-Answer: d. All the above
Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 13.
Which BEST characterizes continuation patterns?
a. There is sideways price action b. They take a long time to form
c. They usually represent long-term patterns
d. They signal the start of a new trend - ANSWER-Answer: a. There is sideways price action
Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 17.
Which is NOT true of a buying climax?
a. Prices fall sharply at first b. Volume is very heavy
c. The close is near the low end of the daily range
d. Prices initially rise sharply - ANSWER-Answer: a. Prices fall sharply at first
Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The Complete Resource for Financial Market Technicians. Chapter 15.
In order for a Dow Theory sell signal to be confirmed
