The last time gold dropped below its 200-day moving average was August 2008.
The great trader Jesse Livermore used to refer to the “time element” in buying stocks, which was essentially the idea that investment success was derived from not knowing which stock to buy, but more importantly in knowing precisely when to buy it.
Read the full article here.
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Read our free Dr K report on how to optimize your mind and body so you can boost your focus when trading the markets.
In The News
The last time gold dropped below its 200-day moving average was August 2008.
Dr Chris Kacher discusses the current market environment and leading stocks in this interview with The Wall Street Shuffle's host, Dan Stewart.
Quantitative easing (QE) has been with us since early 2009. It has rendered many tried-and-true market indicators impotent since price/volume action in leading indices has become somewhat less reliable. Stock market timing techniques since 2009 have been more or less decimated with only the exception of this website and a couple of others, and that said, it has not been an easy environment.
Read the full article here.
This article has also been published on Seeking Alpha: The Fourth Year Of Quantitative Easing.
The George Jarkesy Show welcomes Dr. Chris Kacher and Gil Morales, authors of "Trade like an O’neil disciple: how we made 18,000% in the stock market", to talk about their experience for Fortune Friday.
Apple Inc. recently exhibited railroad tracks over a period of two weeks from Feb. 27 to March 9. Many investors grew concerned that the stock was potentially topping since it was technically overbought. Overbought/oversold indicators such as Bollinger Bands, RSI and other indicators are used by some traders quite liberally.
Read the full article here.
As selfishinvesting.com members should know by now, Portfolio Simulator Dude (PSD) is a composite character we've created in our Follow The Stock section based on the numerous emails we receive from you all that reflect any number of trepidations, fears, confused moments, etc. that tend to beset (mostly) less-experienced investors, although they can become an issue for any investor regardless of their skill or experience level.
In latest PSD portfolio action, was PSD wrong in selling his LNKD out at just above 89 after entering the position somewhere around 91, as he did Tuesday, March 20?
We think LNKD provides a great lesson in what to do if you get shaken out of a position and it then does you the great favor of coming right back the next day...
Read the full article here.
How to make money in the stock market by trading like an O'Neil disciple
Friday, March 23, 2012 | 1:45 pm – 2:45 pm
Dr. Chris Kacher will explain how to find price consolidations and why these present unique buying opportunities within the current real-time outlook. Learn which strategies are profitable during both bull and bear markets; how to spot buying stocks pivoting out of bases, and why certain stocks are not too expensive to buy even after they gap up. You will learn which breakout strategies are viable today, and how to spot exceptional opportunities even in the bear markets like the freefall of 2000-2002. He will also cover how to overcome damaged investing psychology during challenging market environments and will share his own challenges in difficult markets. Attendees will be able to download from www.SelfishInvesting.com a free chart book referencing the stock charts used in the presentation.
March 24 - March 26 2012
Gil Morales will be presenting at the annual HighGrowthStock Investor Software Conference being held in Palos Verdes Estates, California on Saturday, March 24 through Monday, March 26. Gil will be speaking after lunch on Sunday, March 25th. More information is available here
HighGrowthStock Investor software offers a unique "Pocket Pivot Chart View," a sample of which is shown below for Monster Beverage (MNST). Dr. K and Gil worked with Ron Brown and the "Big Kahuna" himself, Ian Woodward, to develop this unique chart view that assists in the visual identification of possible, actionable pocket pivot signatures within a stock's daily chart. We are also hoping to bring Dr. K, who will be traveling in Europe at the time, in via Skype or some other tele-conferencing medium to participate in the presentation. We hope to see you there, particularly if you are interested in learning more about HGSI software, which we consider an excellent charting and analytics program for investors on a budget and those not on a budget. We pay for our own HGSI Software, which we use along with our other programs, so we are not incentivized to promote this product - we are actual users of the product.
How to find then buy leading stocks using sleuthing techniques that include pocket pivot buy points and buyable gap ups.
Welcome to the chat session “How to find then buy leading stocks using sleuthing techniques that include pocket pivot buy points and buyable gap ups...” with Chris Kacher and Gil Morales from MoKa Investors, LLC. Please have questions ready to enter once the chat session begins. PLEASE NOTE: This chat session is text based only. Audio is not available for these chat sessions.
|RA||IBD called a "Uptrend under pressure" yesterday given the large number of DDs on the NYSE and S&P. Is the MDM close to a switch to CASH or SELL?|
|JN||Hi Ross, the chat session will be starting shortly...|
|KP||Is LNKD still a buy?|
|KP||Am I in?|
|JN||The chat session has begun. (PLEASE NOTE: This chat session is text based only. Audio is not available for these chat sessions.)|
|SM||Why isn't TNA kicking butt?|
|JN||Welcome Chris and Gil and thank you everyone for joining us today!|
|Chris||Welcome everyone. MDM has logged 3 DDs on NASDAQ Composite over the last 20 trading days. Given the action of major indices and leading stocks, MDM is staying on its buy signal. A small market pullback would not be surprising given that the general market has been in an uptrend for many weeks.|
|AL||Are pocket pivots different for IPOs? What IPOs are you keeping an eye on?|
|Chris||TNA is 3-times Russell 2000 which has been unperforming the other indices|
|Chris||We have thus not recommended TNA or any other Russell 2000 related indices in our last MDM buy signal on www.selfishinvesting.com|
|SM||TNA - can you talk about small caps vs big caps .........early in a bull market vs late stage in a bull market?|
|RQ||my name is not on Who's on list, do I need to do anything?|
|Chris||POcket pivots apply to IPOs. In fact, with certain IPOs such as INVN, the profits can be substantial. We first suggested INVN on Jan 4 when it pocket pivoted.|
|Chris||Small caps often outperform in early bull markets such as they did in 1991. That said, there are many cross currents which can cause them to outperform or underperform, so we just let our leading stocks tell us what to do. If the list of our leading stocks is comprised mostly of small caps, then it is clear small caps are leading.|
|Chris||Currently, it is the larger caps that are leading|
|Chris||Other interesting IPOs we have our eye on, or have recommended: INVN, ZNGA, UBNT|
|Chris||AAPL looking fine. It continues to lead the market, and is one of the reasons why NASDAQ COmposite is leading the other indices.|
|PJ||stock fundamentals? what is important for you?|
|SM||are we in a NEW bull market? In October, was that the end of a bear market ......thus, we're early in a new bull? .........OR .....was October just the end of a big pullback in the market, thus we are actually in the latter stages of a bull?|
|DW||How are stocks like INVN, ZNGA & UBNT coming onto your radar so early in their run...In other words what are your Sleuthing Techniques?|
|RQ||It is unfortunate that this is text only. Hearing what they say and emphasize is important and gets lost with just texted base.|
|JA||do you use Elliott wave theory at all ?|
|Chris||Still latter stages of a bull. Leading stocks such as AAPL, PCLN formed constructive bases during 2011.|
|Chris||We dont use Elliot wave theory but it does have its applications, especially for certain day traders.|
|ER||I hear all the time that institutions will sell a stock down to shake you out of your shares so they can get the weak holders out. In your experience at O'Neil and working directly with institutions do they actually do this?|
|DF||Chris, what were the parameters in the model that keep it in cash for the first part of 2012? I think we had the buy signal in late Jan.|
|Chris||Market makers often use such tricks, thus its important not to be too 'day trading' oriented in your style of trade. Using the 7 week rule which we describe in detail in our FAQs on www.selfishinvesting.com will show you how to avoid such wiggles that could shake you out.|
|AF||MDM remained on a cash signal from Dec 27th until Jan 25th even though the market had a nice trend, what were the main reasons for this?|
|JNA||Healthy action in INVN today with bounce off 50 day? Secondary issue date/price not confirmed yet?|
|RA||Do you think the Eurodebt crisis has played out for now, or do you expect more volatility from that. I know that Italy and Spain, maybe Ireland, are waiting in the wings and there still could be a messy Greek default.|
|Gil||When it comes to|
|Gil||Elliott WAve theory|
|Chris||INVN had its secondary on March 7. It was quite successful|
|Gil||I can only say that I recall thye old-timers in the Merrill Lynch Beverly Hills office telling me as a young retail stockbroker that in 1991 Elliott Wave analysis was predicting a multi-year bear...the 90s turned out to be a parabolic upside decade!|
|SM||am i reading the charts correctly: INVN......nice bounce off of 50dma. LNKD ....nice bounce off of 10dma. Anything else to ead into it?|
|Gil||LNKD and INVN look beeyootiful|
|Chris||Eurodebt crisis - probably more negative surprises ahead. But price/volume action in major indices and leading stocks will guide the way for MDM and for individual stocks.|
|SM||TNGO - did it have that secondary stock offering today?|
|Chris||yes, shane, that's right.|
|Gil||I used to call it the "bucking bronco principle" where big leading stocks will sometimes have these hairy shakeouts on the way up. Look at AAPL recently as an example. Is this instituitonal manipulation? Maybe, maybe not.|
|ER||When do you expect the new book to hit stores? Thanks for the first book... great information and has helped me make big money last year!|
|Chris||As we wrote in today's report we sent to members on TNGO, yesterday's price/vol action in TNGO was constructive given that it priced today at 18.5/share|
|TM||Gil has talked about 65 day ma I past, and noticed sp500 hit 35 day ma in early March. What moving Ave do you find useful in your work|
|Chris||Next book is due for Wiley's fall lineup. You're welcome!|
|BB||What lenght of measurement(time) do you use for your relative strength for leading stocks and which index or indexs are used by you for this Chris? I have my own bascket of top 2000 unweighted by market cap and have 10 day short term 30 day short medium 90 day medium term for my relative strength measures as an example--Thx Brad|
|SM||PSDude - did he get hypnotized by the market, "....you will sell your stocks at the bottommmmm." or did he simply stick to his rules?|
|DW||what type of scans are you using with your sleuthing techniques?|
|JR||Do you think bonds are just bouncing for now and headed lower? Looking at TBT.|
|JA||Is Buyable Gap Up means Break Away Gap?|
|Chris||Given that a form of fed QE is ending in June, the market is pricing in higher interest rates, thus lower bond prices.|
|Chris||Buyable gap up: https://www.virtueofselfishinvesting.com/faqs/answer/How-do-you-determine-if-a-stock-gapping-up-is-buyable-If-it-is-buyable-how-do-you-time-your-entry|
|RZ||Is there a single technical (EPS, Sales growth) etc that if it was missing would cause you to not buy despite good price/vol action?|
|JNA||Do you consider INVN within buyable/pyramiding range or extended? Or not till 105% over 19.34?|
|RR||Do you have an expectation of where bonds can go to?|
|Gil||PSD is 50% invested, took some profits, cut some tiny losses. He's in good shape.|
|Chris||Also because the market is pricing in higher interest rates, that means this excess capital flows into stocks (or cash)|
|ER||I'm curious about your feelings on ALXN... I bought a few weeks ago on the breakout from 3WT.. it seems to be holding the 20day line and not the 10day. Should I use the 20day as my sell guide?|
|Gil||You can make very nice profits being 50% invested in the right stocks.|
|Chris||INVN may be buyable/pyramidable depending on your risk tolerance levels and position size in INVN|
|JNA||Thank you Chris|
|Chris||ALXN acted oddly yesterday- big down volume, probably a big seller. That kind of action could be a warning sign.|
|ER||Should I read anything into it finishing mid-bar?|
|JA||I read your explanation of Buyable Gap Up. It didn't mention anything about stock's extension from base. Can an Exhaustion Gap be Buyable if the fundamental and technicals are good?|
|PJ||When do you short the stock? What is your methology?|
|JNA||YELP and TRIP interesting?|
|Chris||Yes, mid bar can mean support, especially if it sold off below a critical support level then came back. ALXN finished mid-bar after a big seller unloaded it, so that is a mid-bar that should be viewed with caution.|
|ER||thanks for the insight Chris|
|SM||OK Sigmund Freud, tell me wny INVN had that huge drop (15% or so?) in just 2 days?|
|Chris||Exhaustion gaps are usually too extended. We discuss good vs bad Buyable gap ups in our presentation hand out here: https://www.virtueofselfishinvesting.com/presentation-handouts|
|BB||What are your favourites for measuring relative strength?|
|Chris||YELP is too small, especially in this market environment. TRIP had a major gap down so I'd be cautious.|
|RW||We really appreciate your pocket pivot emails, is there any chance we could get emails regarding selling previous pocket pivots? This could help us learn when to sell.|
|AW||Chris, what is the exit criteria used by PSD? he is out LNKD and then the next day it gap up. same with VFC, the next day it is up...|
|Chris||INVN is volatile because it is a hot IPO and tends to trade at a high beta to the market. Its recent pullback is nothing unusual given its steep pullback in late Feb|
|JR||Yes, good point. Do you ever plan to provide sell signal emails as part of your service?|
|Chris||Selling strategies are discussed in our FAQ section by typing in 'sell stops' into the keyword search bar. Each person's selling will be different since each person has different risk tolerance levels. That said, the 7 week rule we discuss in our book and in our FAQs can be a suitable guideline for many investors.|
|SM||Or, does it not really matter why INVN dropped & then bounced? I bought at 20.8 and held her thru the drop & bounce.|
|Chris||Sell signal emails would just create problems since some sell signals would go against the risk tolerance levels of certain members.|
|PA||So how do you rate UBNT? It has volatility similar to INVN, and is at a new high - also a recent IPO|
|Chris||Each member must find what selling strategies work for their own trading personality/risk tolerance levels.|
|Chris||INVN dropped then bounced in keeping with its 'personality'|
|Chris||UNT is interesting- great story, recent IPO, lots of potential.|
|JR||OK, that makes sense. I really value the service/product that you and Gil provide. I'm a happy customer! Thanks!|
|VW||Chris, ALXN 's violent move under the 10 Day MA yesterday on HUGE volume; It seemed to act well until yesterday. Did this change the character of the stock . 7 week rule violation|
|DM||Bet you guys can't wait to go beat your head against a real wall after this...|
|Chris||We are waiting for a pocket pivot or other such buy point in UBNT|
|PA||and KORS? true Market Leader?|
|JN||The chat session will be closing in a few minutes, if you have any final questions that you would like to ask, please do so now.|
|Chris||ALXN's move yesterday somewhat changed its character. That kind of big volume selling was out of character for the stock.|
|EP||Any thoughts on DNKN?|
|Chris||KORS looks fine so far. It looks to be setting up another constructive basing pattern. We would not be surprised to see another pocket pivot out of KORS soon enough.|
|NH||KOLD ETF - do you follow? Big mover :)|
|SM||Holding INVN - I guess that's sort of why I held onto her. The current break below the 10dma looked soooooooo similar to its last break below it ......& of course last time, it bounced off of the 50dma.|
|Chris||DNKN looks like a slower mover- not so interesting.|
|AW||Do you think in order to make big money in the market (i.e 100% return), we need to hold the stock longer or do you think we can do it with swing trading (1-2 weeks hold)?|
|EP||still interested in cloud stocks?|
|Chris||Also, on UBNT, even if it goes higher from here without an entry point, most leading stocks do give pocket pivot entry points within a throw from their base.|
|RM||Thoughts on BIDU?|
|SM||comment on the current overall stae of the market....please..|
|JR||Looks like we're having a nice reversal day in the market. Bullish signal?|
|Chris||Cloud stocks- only if they start to show leadership again. So far, not.|
|Chris||Upside reversal days on higher volume would be bullish.|
|Chris||State of the market- we're in an uptrend. The trend is your friend until the end when it bends.|
|JNA||Just want to say thanks for all that you do ... and thanks for today's Q and A.|
|Chris||You're welcome, John.|
|VW||Thank you Chris. Thank you Gil|
|RZ||Thanks for your time as well guys.|
|BB||Pity the chat doesnt work|
|JA||thanks to both of you|
|AF||Thank you, great service!|
|JN||Thank you for joining us for the chat session today, and thank you Chris and Gil for taking time out of your busy schedule to answer our questions. Please continue to enjoy the sessions offered at the eShow and be sure to visit the eHall to gather more information that will help you in your future trading endeavors.|
|Chris||As long as leading stocks continue to act well, along with any constructive pullbacks, the MDM should remain on a buy signal.|
|SM||pick one INVN, LNKD, TNGO|
|Chris||Thanks everyone. INVN|
|SM||re: PICK ONE .....assuming proped buypoint|
|JN||Thanks again everyone!|
|SM||why INVN? it has a better story/product?|
|RD||any IBD meetup Group peopl in the chat room today|