90% of fund managers cannot beat the S&P 500. We challenge the status quo with our early-entry buy point strategies discussed below.
You can also take control of your investments even if your time is scarce by simplifying investing with our timing models.
Our VIX Volatility Model™ has been shown in tests to be profitable in trendless markets such as in 2015, but also in trending markets as it is a short term and intermediate term strategy.
So even if you have no time to watch the stock market, you can make money during these challenging times. We make the process simple. You will receive emails as soon as there are updates to any of the services below. We have set up the site to do this so there is no time delay in getting updates to our subscribers. We also are building an extensive Q&A database so you can optimize your personal psychology and fine-tune your investment strategy, if you so choose.
Dr K VIX Volatility Model™
For Track Record, Go here.
The VIX Volatility Model (VVM) seeks to turn human emotions into profits by capitalizing on emotion-driven events which carry predictive value. Price/volume charts are used as a guide as they are human emotions on parade. Developing a seasoned, contextual "chart eye" over my 25+ year career has been essential as it allows me, and thus the VVM to remain fluid with changing market conditions. Indeed, there is no such thing as a static "black box" strategy. Any system of value should in principle be self-learning thus self-evolving as it "sees" new data. The way in which I have always operated my strategies since the 1990s was an early incarnation of Google's cutting edge "deep learning/machine learning" approach.
The VVM incorporates a number of strategies which can profit from a broad spectrum of market volatility behaviors. For example, the VVM excels in trendless or downtrending markets where volatility is amplified. It also knows how to ride uptrending markets which tend to be less volatile. Its returns have well outperformed the major averages in backtests and in real-time trading.
The model looks at the VIX among other parameters, so on a BUY signal, it sees the VIX heading higher, thus the market heading lower.
The volatility model is both a short and intermediate term model. Uptrends tend to be more orderly than downtrends, thus during uptrends, its SELL signal can last a few weeks or more. On the other hand, both its BUY and SELL signals during downtrends or sideways markets may last just a few days or less. During such times, volatility-related ETFs can move swiftly and sharply in either direction. Thus it is possible to capture double digit percentage gains on a single signal in just a few days or less. This naturally more than makes up for the sometimes multiple small losses along the way.
Since the volatility-related ETFs often do not fully correlate with the CBOE Volatility Index (VIX), other variables were used in conjunction with the VIX such as price/volume of major indices and institutional money flow in leading stocks.Dr K VIX Volatility Model™ Fail-Safes
During the beta phase in 2015, Dr. Kacher also incorporated neural (self-adjusting) fail-safes into the model which substantially increase its risk/reward. Some of the signals may be short-lived should their fail-safes hit, sometimes within an hour or less of the signal. This can result in a number of whipsaws at small losses, though testing has shown it is best to reenter the signal if certain conditions are met.
The signals that prove profitable have been shown in backtests and more recently in real-time using actual capital to be far more profitable than the small fail-safe losses, even in a sideways market that characterized much of 2015. Thus, there have been cases where one could be whipsawed a few times at breakeven to small losses of typically 0 to 3% each time, but the trades that occurred after such whipsaws often had profits that far outweighed all the small losses combined. But always remember, past performance is no guarantee of future performance.
Note, calling the Volatility Model a "model" is misleading as the algorithm is self-learning thus ever evolving with the ever-changing price patterns the market throws at us. The same can be said for the Market Direction Model™ though it is self-learning at a much slower pace as it is designed to catch the major trends. Thus the two models attempt to address all market environments- uptrending, downtrending, volatile, and sideways. Just as the pocket pivot was born from the failed base breakouts that began in 2004, the VIX Volatility Model was born from the trendless year of 2015 which some media souces have cited as the "most difficult" market in 78 years as well as one of the worst years for hedge funds.Dr K VIX Volatility Model™ ETF Selection
When the model switches to a buy or a sell signal, you will be provided with a list of possible ETFs to buy.
As with any investment vehicle, make sure you position size according to your risk tolerance levels. Thus it is imperative members understand the volatility in such vehicles, especially in highly volatile vehicles such as UVXY or TVIX. These instruments can swing widely in a short time, thus while big gains are possible, so are big losses. This will then allow you to intelligently position size, place sell stops if you feel the need, taking partial or full profits should they accrue rapidly, and possibly pyramid if such actions do not exceed your risk tolerance levels.
Dr K Market Direction Model™: This service will be of most use to those who have little or no time to watch the stock market. We make the process as simple as possible. Email updates will be sent to you with precisely what ETFs to buy. The type will depend on the strength of the buy or sell signal issued by the model.
While I created the algorithms in the early 90s as a student in grad school, this work eventually became my Market Direction Model™ which combines trend following with price/volume action of the major indices and leaders. I continued to refine the algos as my ability to identify proper distribution and confirmation days improved. I realized then that the limitations of the 'M' in William O'Neil's CANSLIM© were not the fault of the system, but were the fault of operator error, ie, difficulty and confusion in properly interpreting such days.
Some might argue proper interpretation is subjective, but it is rather the act of analyzing and integrating many variables (price/volume, shape of price/volume action, market indices and leadership) into a complete picture. Needless to say, this requires considerable experience. I liken it to O'Neil's uncanny ability to 'see' the subtle differences between a nearly perfect base and a less than perfect base and all the degrees in between. No one would say O'Neil's ability to do this is subjective but the result of decades of experience analyzing millions upon millions of charts. Since 1991, my ability to 'see' continues to improve, but as O'Neil once told me, always be a student of the market. Once you think you've mastered it, the market WILL throw you for a loop. So always stay vigilant and focused.
We are in a highly unusual market environment, and with the advent of high frequency trading and the like, a few question whether price/volume action and trend following are still applicable. My answer is a resounding yes. My Market Direction Model™ is up +55.1% from June 9, 2009 - June 9, 2010 in a test fund using actual money, with exposure to the market less than half the time as audited by Rothstein Kass. In a separate account that is not using actual money, I wanted to see how my system held up against a volatile instrument such as the 3x technology ETF TYH, going 100% long on buy, 100% short on sell, and 100% cash on a neutral signal. Such instruments did not exist until late 2008, so this gives big opportunity for profit that did not exist before. From June 1, 2009 - May 28, 2010, it is up +215.1% (see Results page). Of course, due to the highly aggressive nature of this account, drawdowns as high as -18.5% were not unusual but that is the price to pay to get to +215.1%.
The bottom line is that trends still occur even in these highly unusual times. Just ask Michael Covel who wrote the excellent book "Trend Following" which contains in-depth interviews with successful long-time trend followers John Henry, Bill Dunn, and Ed Seykota. And yes, while such noted trend followers have been encountering difficulty since 2009, they are no stranger to steep drawdowns, and in their 25+ year careers, have always more than recovered, thus maintaining the integrity of their long term track records. In their careers, there have been periods where trend following and price/volume action was declared dead but what makes them unique is they continue to apply their systems through thick and thin, knowing the markets will always trend again.
Pocket Pivot Review: This is the original home of the pocket pivot buy point, a buy point created by Dr. Chris Kacher who created the pocket pivot in 2005 when the sideways choppy markets of 2004-2005 were making base breakouts fail. But what does not kill you makes you stronger, and the pocket pivot concept was born. We will email you any top quality stocks that had pocket pivots on that day. Base breakout buy points will be included as they technically fall under the pocket pivot concept which is, in essence, a favorable buy point in a stock. Buying pocket pivots are to our advantage because they get us into a stock early often before it breaks out of its base. It also enables us to add to a position in a winning stock as such stocks often have multiple pocket pivot points as they move higher. You will receive an email during or at the end of the trading day after we have done our analysis. On some days, there may be no stocks that have pocket pivots or there may be many. We tell you when to buy, but you must determine when to sell based on your own personal risk/reward.
Buyable Gap Ups: Stocks with strong fundamentals and technicals that are gapping up will be flagged. We discuss the conditions for buyable gap ups in the FAQ section 'keyword: gap' and in our book. You will receive an email at the end of the trading day after we have done our analysis, and can thus buy these stocks the next trading day. As with pocket pivots, we tell you when to buy, but you must determine when to sell based on your own personal risk/reward preferences.
Short-Sale Set Ups: We will email you in real-time any stocks we believe can be shorted. Gil Morales is one of the best if not the best at short selling individual stocks as his audit shows. His triple digit percentage return in 2001 was due primarily to selling short individual stocks, and the doubling of his account in May 2010 was also due to his being on the short side at the right time. In bear markets, there are liable to be a larger number of quality short-sale set ups. We tell you when to short, but you must determine when to cover based on your own personal risk/reward preferences.
Market Lab Report: The 'Market Lab Report' will provide our analysis on stocks and the markets as warranted.Non-members will receive our Monday edition while members receive the dailies. In it, we discuss our thoughts about and approach to the current market environment, including the thematic basis for actionable stock ideas. This is not a one-way, "bull market only" service, as we will provide actionable short-sale ideas during bear markets. We believe that the trend should always be your friend, whether bull or bear.
OUR WEBINAR SERVICES
Webinars: VoSI founders Gil Morales and Dr. Chris Kacher will discuss the current market conditions and individual stocks in real-time, or near to real-time (e.g., after the close), via live GotoWebinar.com presentations. It is beyond the scope of the website to provide personalized investment advice, evaluations, and recommendations - if every VoSI member asked us for such advice it would overwhelm our resources. To provide a forum for such questions, however, we have provided a live webinar service wherein attendees can ask specific questions regarding certain stocks or other securities. Otherwise we provide personal investment consultative and advisory services at a starting rate of $5,000 per month for investors interested in having us work more closely with them in a personal, one-on-one format.
They will conduct at a minimum one webinar per week, but when market conditions warrant, such as during unusual market activity spurred by news events, additional webinars will be scheduled. Members can attend these webinars live via GotoWebinar.com or view via a private webinar link where VoSI will post video recordings of the presentations within a few hours after their live conclusion.
Through these webinars, subscribers will be able to get a sense of how Gil and Dr. K implement their broad range of market techniques and specific methodologies in real-time as they pertain to current market conditions and leading individual stocks. To further benefit subscribers, open Q&A sessions will follow each main webinar presentation and discussion.
Capacity is currently limited to 500 subscribers. To subscribe, go here.
This website gives investors access to the continuous, real-time thinking of two experienced traders who have studied, employed, and written books on all aspects of the William O'Neil (CANSLIM), Nicholas Darvas, Richard Wyckoff, and Jesse Livermore methodologies. We believe we can help members not just profit but also improve their skills as an investors. Should you have little to no time to follow the stock market or have no interest in reading about it, then our services "Dr K Market Direction Model™" and possibly "Pocket Pivot Review" would be of most use. See our archives for examples of each service, and feel free to email us with any questions you may have. As former portfolio managers for William O'Neil + Company, Inc., we have had wealthy individuals offer to pay us several thousand dollars for a single day of being able to sit down with either of us, one-on-one, and watch how we implement our methods in real-time. Like Jesse Livermore, we prefer to trade alone, so this idea has had little appeal to us. However, through this Web site we can provide individual investors with similar access and in the process help out those who need it most, for a lot less than several thousand dollars a day and in a manner that is not an imposition to our trading day.
Members of any of our services will receive immediate email notifications. This way, you can receive the signal change on your computer, your phone, or your PDA in real-time. You should act on the email recommendation as soon as possible to fully benefit from it. Both Gil Morales and I will discuss our thoughts in the email update as warranted as it relates to the current market environment. Non-members can view a history of email updates with a two month delay.
Many have asked exactly how we buy, pyramid, and sell stocks. We discuss some of our buying and selling strategies in the Archives/Articles section of the website in the article "Making Over 18,000% in the Stock Market in 7 Years." Returns discussed in that report were verified by the big four auditor KPMG. We also have tailored our strategies to the current QE-manipulated market environment discussed in our weekend reports such as this one.
GETTING STARTED IS QUICK AND EASY
- Decide how much capital you wish to invest using the timing models or the actionable stock reports or both.
- It is advisable to avoid investing in a timing model signal mid-signal. Wait until the next signal.
- If buying a stock, read our Weekend Reports in the Past Reports section to understand that we prefer in many cases to buy on constructive weakness within the stock's chart pattern.
- See our VoSI Focus List in the Past Reports section. You can use this as your watch list. This list is by no means complete but represents what we think are the best candidates given the numerous screens we run on a daily basis.
- Have a look at the FAQs. You can search for specific topics using the keyword search bar.
Both Gil Morales and I believe successful investing is not about being on the bull side or the bear side, but on the right side. Our strategies can help shed light down the often dark and treacherous pathways that are part and parcel of investing in the stock market.
Best Wishes for Successful Investing,
Dr. Chris Kacher
MoKa Investors, LLC
Virtue of Selfish Investing, LLC
MoKa Investors, LLC
Virtue of Selfish Investing, LLC