After being chosen by legendary investor William O'Neil to be his right hand man when it came to researching stocks and the markets, I had already had many years of experience in how to properly conduct research studies. I am sharing these in-depth studies with investors so they can benefit not just from any profits accrued via stock and ETF selection, but so they can understand how to fish for themselves. Give a student a fish, they profit for a day. Teach a student to fish, they can profit for a lifetime.
90% of fund managers cannot beat the S&P 500. We challenge the status quo with our early-entry stock entry point strategies discussed below, in our FAQs, and in our report archives.
You can also take control of your investments if your time is scarce by simplifying investing with our timing models.
We have two timing models. Our VIX Volatility Model™ was 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 little time to watch the stock market, you can make money during these challenging times. We make the process simple. You will receive emails on a regular basis. It is then up to you to decide whether to take action.
We also have an extensive Q&A database so you can optimize your personal trading psychology and fine-tune your investment strategy, if you so choose. Some prefer to buy on weakness, others on strength. Know that some market conditions will favor one style over another. We offer buying and selling guidance as we see market events unfold
Dr K VIX Volatility Model™
Its high-water mark for the year was +54.3% as of 3-3-17 in Real-Time Trading.
The VIX Volatility Model (VVM) seeks to turn human emotions into profits by capitalizing on emotion-driven events. These events carry predictive value. Price/volume charts are used as a guide. Charts are human emotions on parade.
- Not A Black Box
Developing a seasoned, contextual "chart eye" over my 25+ year career has been essential. 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. Such a system learns from new data each day. This is the way I have always operated my strategies since the 1990s. It was an early, manual incarnation of Google's cutting edge "deep learning/machine learning" approach.
- Excels in Up, Down, and Sideways Markets
The VVM incorporates a number of strategies which can profit from a broad spectrum of market 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. On a BUY signal, it sees the VIX heading higher, thus the market heading lower.
The volatility-related ETFs often do not fully correlate with the CBOE Volatility Index (VIX). Other variables are used in conjunction with the VIX. Such variables include but are not limited to 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 increased 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 trading using actual capital, to be far more profitable than the small losses. This was true even in a sideways markets. Much of 2015 and July - October 2016 traded sideways. Thus, there have been cases where one would have been whipsawed a few times in a row. Losses for each whipsaw typically were between 0 to 3%. The trades that then 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 sources 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. 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. The VVM accounts for this in terms of its risk control. That said, always position size in agreement with your risk tolerance. Place sell stops and/or trailing 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. The VVM already does this, but you may want to further fine-tune this to fit your style.
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. Emails will be sent to you with precisely what ETFs to buy. The type will depend on market conditions.
I created the algorithms in the early 90s as a nuclear physics Ph.D. student at UC Berkeley. 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 buying and selling pressure improved. I realized then that the limitations of the 'M' in William O'Neil's CANSLIM© were not the fault of the system, but the fault of operator error.
Analyzing and integrating many variables such as price/volume, shape of price/volume action, market indices and leadership into a complete picture is key. I liken it to William 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. O'Neil's ability to do this is the result of decades of experience analyzing millions upon millions of charts. Since 1991, my "chart eye" continues to improve, but as O'Neil once told me, he will 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. Indeed, the QE-manipulated markets that began in 2009 become more challenging with each passing year. Much of 2015 was trendless thus nearly impossible to make much progress for models such as this one which seek to capture intermediate term trends. Of course, that was the motivation behind the VIX Volatility Model (see above). And while the markets seemed to paint themselves into a tighter and tighter corner with each passing year, the Trump victory in late 2016 seems to have been a major turning point for market behavior. So perhaps the Market Direction Model can shine once again. This will also further enhance profits in our stock picks and in the VIX Volatility Model.
Indeed, the trend following wizards have had an unprecedented string of losing years in their illustrious 25+ year careers. But the only thing that never changes is change. Markets are dynamic. So far, market price/volume action is showing a change in market character since the Trump victory.
Pocket Pivot Review: This is the original home of the pocket pivot buy point. This buy point was observed by Dr. Chris Kacher in 2005 when the sideways choppy markets of 2004-2005 were making base breakouts fail. 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. Such stocks often have multiple pocket pivot points as they move higher. We offer guidance on when to buy and when to sell.
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 books. We offer guidance on when to buy and when to sell.
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. He also more than doubled his account in May 2010 during the flash crash. In bear markets, there are liable to be a larger number of quality short-sale set ups. We provide guidance on when to short and when to cover.
Market Lab Report: The 'Market Lab Report' provides our analysis on stocks and the markets on a daily basis. 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.
We conduct one webinar per week, but should market conditions warrant, 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.
Subscribers will get a sense of how Gil and Dr. K implement their broad range of market techniques and specific methodologies in real-time. To further benefit subscribers, open Q&A sessions will follow each main webinar presentation and discussion.
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 two market timing services would be the best fit. See our report archives for actual email examples of each service. 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 to sit down with either of us for a single day, one-on-one, and watch how we implement our methods in real-time. But as with Jesse Livermore, we prefer to trade alone, so this idea has had little appeal to us. That said, we showcase our thinking on this site so others can learn from our experience. This includes any adjustments we may have to make to our own trading since the only thing that never changes when it comes to stock markets is change. One such adjustment has been switching to buying on constructive weakness instead of on strength. This minimizes risk in a market that has trouble developing any meaningful uptrends.
Members will receive immediate email notifications. This way, you can receive the signal change on your computer, your phone, or your PDA in real-time. Non-members can view a history of email updates with a time 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. But change is the only constant when it comes to markets, so we have adjusted 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.
We 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 DBA Virtue of Selfish Investing
MoKa Investors, LLC DBA Virtue of Selfish Investing