Stocks & Commodities V. 27:01 (54-60): Interview: Forecasting Simplified, With Cynthia Kase by J. Gopalakrishnan

Interview: Forecasting Simplified, With Cynthia Kase by J. Gopalakrishnan

Cynthia Kase, president of Kase and Co., Cta, is considered by many to be the energy market’s premier technical analyst and hedging advisor. Educated as an engineer, she worked as a trader and risk manager for Chevron, Chemical Bank, and the Saudi Oil Ministry’s consulting arm, Petronal, before launching her company in 1992, which primarily focuses on providing trading and hedging strategies, software and solutions to the energy market, but also offers a trading toolbox, StatWare, on a range of trading platforms. She has been the winner of the Market Technicians Association’s Best of the Best Award, 1997, received the Key Women in Energy Award twice, first in 2002 for Vision and in 2004 for Innovation and Creativity, and in 2007 became the first American to be awarded the coveted Master of Technical Financial Analysis diploma from the International Federation of Technical Analysts.

Stocks & Commodities Editor Jayanthi Gopalakrishnan interviewed Kase on November 1, 2008.

Cynthia, tell us how you got started trading and what you are doing now.

I was educated as a chemical engineer. I got a master’s degree in chemical engineering and I worked for the first 10 years of my career as an engineer. I graduated in 1973 and worked for Polaroid near Boston where I grew up and then Stauffer Chemical in the Bay Area. In January 1980 I went to work for Standard Oil Co. of California, which became Chevron. The company had a management development program where it would move people from engineering to the business side of the oil industry. In 1983 they transferred me from engineering to the trading group, and that’s how I became a trader. So really, it was by accident.

Was that a big change?

As an engineer I would read all the engineering magazines to try to improve my skills and knowledge. When I went over to trading in 1983, it was the same year the crude oil contract was introduced. So there were people trading physical but weren’t sure what short or long meant or what a moving average was, or anything like that. I was frustrated for a while, because here I was an engineer but I was in the middle of this fundamental, gut-feeling kind of trading instead of numbers and analysis. When I discovered technical analysis, I loved it because it gave me something to study and learn and helped me get a sense of the market.

I was transferred to New York in 1985 to manage that office’s clean products business, including gasoline, jet fuel, and heating oil. So I traded physical cargos in New York for the rest of the 1980s, but I learned a lot about technical trading because trading became, even on the physical side, just a differential to the Nymex. So if you were going to trade a cargo of heating oil, for example, it was Nymex plus or minus something. It was a proxy for the physical.

Also, in working for one of the huge international oil companies when brokerage commissions were around $35 a round turn in 1985–88 dollars, the brokers were only too happy to give us lots of education. Back then, the Nymex was only a small exchange that nobody had heard of.

What did you do after that?

I became a self-taught technician because in those days, and it still is to some degree, technical analysis was associated with voodoo. I went to work for Chemical Bank as a commodity derivatives trader at a time when the derivatives business was just in its infancy. I had a lot of time on my hands, so I started developing my own indicators and I bought all the Tag (Technical Analysis Group) tapes that the old Dow Jones Telerate used to offer.