In The Trading Cockpit with the O'Neil Disciples

Gil Morales is a co-Managing Director and Chief Portfolio Manager of MoKa Investors, LLC. He is the coauthor and publisher of the investment website, VirtueOfSelfishInvesting.com, as well as the author and publisher of the Gilmo Report (www.gilmoreport.com), and was formerly a senior proprietary portfolio manager for William O'Neil + Company, Inc. During his tenure there, Gil also functioned as vice president and manager of the Institutional Services Group, responsible for advising more than 500 of the world's largest and most successful institutional investors, including mutual funds, pension funds, hedge funds, trust companies, and banks. In 2004, Mr. Morales was appointed chief market strategist for William O'Neil + Co., Inc. and coauthored with William J. O'Neil the short-selling treatise, How to Make Money Selling Stocks Short (Wiley). Between 1998 and 2005, Morales achieved an audited return of 10,904% in his personal account, as verified by Rothstein Kass.Chris Kacher, PhD, is coauthor and publisher of www.VirtueOfSelfishInvesting.com. His investment career began in 1995 when he founded one of the first Internet-based stock advisory services. In 1996, he joined William O'Neil + Co., Inc. as a research associate before quickly being promoted to senior research analyst and senior proprietary portfolio manager for the firm in 1997. From 1996 to 2002, Dr. Kacher achieved a verified return in his personal account in excess of 18,000%, as verified by KPMG. He received a BS in chemistry and PhD in nuclear physics from the University of California at Berkeley, where he studied under Nobel Laureate professor Glenn Seaborg and helped discover element 110 on the Periodic Table of Elements and confirm element 106, which his group named Seaborgium.

• Acknowledgments xiiiIntroduction xvDisciple Boot Camp xviiPocket Pivot Buy Points xviiiBuyable Gap‐Ups xxiMoving Average Violations xxivThe seven‐Week Rule xxvAs You Begin xxviChapter 1 the OWL ethos 1Quick Quiz 2Chart Exercises 7Identifying Bases 7The Line of Least Resistance 9Answers to Quick Quiz 14Answers to Chart Exercises 19Identifying Bases 19The Line of Least Resistance 24Summary 32Chapter 2 Mind Games and Mazes 33Embracing Uncertainty 33The Psychology of Follow‐Through Days 34Lockheed‐Martin: An opportunity Derived from Uncertainty 37Silver: A Crystalline trend amid the Uncertain and Murky Waters of 2011 40The Uncertainty of Company Earnings Announcements 42You Must Lose to Win 44The Need for Labels as a Heuristic Achilles’ Heel 46Price Bias 48Find Experts You Can Learn From, Not Have to Rely On 51Paper Trading versus Real Trading 52Awareness and Preparation 53In Summary: Know Thyself 56Chapter 3 2011: A Postmortem for the New Millennium 59Reviewing the 2011 Trade Blotter 62Using Spreadsheet Analysis with Chart Mark‐Ups 63Three Swings, Three Strikes 64The Window of Opportunity Has a Silver Lining 68More Roads to Nowhere in 2011 74Summarizing the Lessons of 2011 80Chapter 4 Developing Your “Chart Eye” 85What is a Chart Eye? 86The Visual Effect of X‐ and Y‐axis Scaling 88Linear versus Logarithmic Charts 90Bars or Candles? 92Moving Average Stress Syndrome (MASS) 95Indicators: Useful or Useless? 102Are Intraday Charts Useful? 105Monitor Color and Formatting Schemes 108What You See is What You Get 111Chapter 5 Pocket Pivot Exercises 113Conclusion 195Chapter 6 Buyable Gap-Up Exercises 197Conclusion 263Chapter 7 A Trading Simulation 265First Solar (FSLR) 2007–2008 266Acme Packet (APKT) 2010–2011 318Conclusion 340Chapter 8 Frequently Asked Questions 341Pocket Pivot Buy Points 341Buyable Gap‐Ups 354Stops and General Selling Rules 355General Topics 359Short‐Selling 367Market Timing Model Building 370Appendix List of Companies (with Ticker Symbols) Referenced in the Book 375About the Authors 379Index 381