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FAQs Frequently Asked Questions

General Questions
Please comment on your website's overall performance since the crash in March 2020.
Prior to the market crash in March 2020, we had a number of names which were top performers including SPCE and TSLA. Our calls on gold last year when it finally broke out of its multi-year sloppy basing pattern was one of the earliest thus most profitable. If you type in keyword 'gold' in the reports section, you can pull up all the time-stamped reports we have done on gold.

The Market Direction Model continues to outperform overall including having profited handsomely from the market crash in March 2020 from either buying TECS or shorting TECL.

Both of us recognize the gap up/gap down nature of this news driven market which increases risk. Second and third order effects can easily push the market into a sharp correction as we have seen a number of times even during periods of QE when major averages corrected as much as 20%. As legendary trader Ed Seykota has said, "Controlling risk are the first, second, and third most important rules when it comes to trading."

The uptrend observed since March 2020 has been reminiscent of the one in 2009. Both carried little resemblance to the smooth uptrends of the 1980s and 1990s. Thus one should enter positions keeping risk to within 2-3%. Our various buying strategies (volume dry-ups, constructive pullbacks after a stock issues a pocket pivot, undercut & rallies) do just this.

One can then opt for a longer term, trending approach using the 7-week rule which has worked nicely in a number of names including LVGO which I first mentioned on April 27 when I wrote, "This includes LVGO which had a pocket pivot breakout off its 10dma on Thursday." Then on May 24, we mentioned NVDA in a BGU report. On May 27, we reported on the pocket pivot issued by NFLX. On May 29, TSLA, MSFT, CSCO, and ORCL tech juggernauts all had pocket pivots as mentioned HERE. Both TSLA and MSFT have well outperformed.
On the aforementioned stocks, longer term trend followers are using the 7-week rule to "sit tight" as Jesse Livermore classically advised.

SHOP which I mentioned on June 22 when I wrote "SHOP which is a cloud-based commerce platform for small and medium sized businesses, gapped higher on Monday. This too should be watched for a low risk entry point." I also mentioned OKTA on May 3 where I wrote, "Cybersecurity companies such as OKTA and QLYS also stand to benefit. OKTA and QLYS had pocket pivots the other week but have since pulled back to their respective moving averages." On July 13, I sent out a report on AMD on how it has well outperformed INTC for specific reasons. It pulled back to its 10- and 20-day lines so became actionable. It has since has a strong break out, up more than 25% from the entry point.

Yes, there are a number of other names that have enjoyed strong uptrends, but as O'Neil always said, have only a few eggs but watch those eggs closely. O'Neil typically held just a few stocks, maybe 3 to 5, in a big bull market. We focus on the names we see as viable for outperformance. Some of the names mentioned above fit this criteria thus are contenders for longer term holds using the 7-week rule. Members of course may buy other names not mentioned but also fit the criteria. And remember, always have your sell stops in place to take profits because no matter how well a stock may perform, it will be subject to corrections.

The crypto section is a free service. The calls have worked out tremendously so far. I'm perplexed as to why you think they have not, but since you are not following this service, it is just a case of misinterpreting the results. Position sizing when it comes to crypto is essential (though Ed Seykota would also agree it is key in stock performance as well). I detail my position sizing strategy when it comes to cryptocurrencies HERE which explains why I bought Chainlink (LINK) several times as well as Aave (LEND), Unibright (UBT), and Enjin (ENJ) among other coins.
First published: 20 Jul 2020
Last updated: 25 Jul 2020