Dantes Outlook Market Podcast

Technical Methods and Market Signals

Episode Summary

Katie Stockton, managing partner of Fairlead Strategies, joined the show to discuss her disciplined process and market outlook for 2022. Katie is a Chartered Market Technician (CMT), who studies price action in order to identify market opportunities. We talked about the importance of filtering noise by combining a mix of trend and momentum signals, especially given increased uncertainty heading into the new year.

Episode Notes

Katie spent more than 20 years on Wall Street providing technical research and advice to institutional investors. She is the managing partner of Fairlead Strategies, a technical research firm. Here is a brief rundown of our conversation. 

• Started with a strong affinity for mathematics given the need for concise analysis – a binary takeaway that can be applied to markets.
• Technical analysis provides a visual element to help understand the markets, driven solely by price action.
• Worked as an analyst under mentors who taught her about different indicators and tools, which she combined in order to provide value as a trader and then later as a researcher. Consistency is key.
• Fairlead uses a collection of indicators to provide buy and sell signals. The real upside is in the uptrend, although certain momentum gauges can determine when trends are accelerating or ending. 
• Katie is monitoring initial signs of upside exhaustion in the S&P 500 despite positive seasonal influences at the moment. A higher volatility regime could unfold next year, similar to 2018, a rangebound year which benefitted investors with a more intermediate-term timeframe.