The StockTwits® Edge: 40 Actionable Trade Set-Ups from Real Market Pros

CHAPTER 19

The Top-Down Technician

Greg Harmon, @harmongreg

Greg has distilled a world of exceptional experiences into a strategy that is simply profitable. While it appears as though he operates effortlessly in the world of technical analysis, it turns out that he has made it to this point only by working so hard for so long. This chapter, along with his blog, DragonflyCap.com, is truly a hidden gem and a boon for those who aspire to be more sophisticated technicians.

The best preparation for tomorrow is doing your best today.

—H. Jackson Brown Jr.

ALL ROADS LEAD TO TECHNICAL ANALYSIS

In 1986, I started working in finance in the securities lending/repo market at Chase Manhattan Bank, where I quickly learned about liquidity and credit spreads. In those days, we would put U.S. Treasury bonds out on repo and buy A1/P1+ commercial paper, both on an overnight basis, for 25 basis points (bps) or more. After five years, I moved to Boston to trade the same market and start international business for State Street. Shortly after my arrival, the equity team left and I added that to my responsibilities and thus had my first opportunity to deal in the equity finance space. The next seven years were a global cavalcade of merger arbitrage, tax arbitrage, dividend arbitrage, yield curve plays, futures arbitrage, covered interest rate arbitrage, and just outright short selling. The involvement in so many different asset classes and markets helped me to build my understanding of intermarket ...