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I have seen Bill O'Neil mentioned a number of times on this list. I don't do EL
so I can't contribute anything there. I do know something about Bill O'Neil, so
here is some info that may give some incite to those of you who are interested
in Bill and his systems.
Bill originally discovered the "cup and handle (originally saucer)" formation in
the late 60s. It was a pattern that repeated frequently in the '67-'68 bull
market. Bill had help from a top market technician named Chet Pado and a super
tape reader named Don George. Chet had been the (closet) TA at Fidelity and was
Jerry Tsai's (for you old timers) right hand man. Don George had been a welder
at Lockheed before before he began making his living off the ponies, and,
eventually, the stock market. He had a knack ! The discovery of the "cup &
handle" was probably a collaborative effort. CANSLIM, on the other hand, came
pretty much from Bill alone. From his market observations and from the ideas of
some of history's great traders (i.e.. Livermore, Loeb, Baruch). Bill is a great
reader and distiller of ideas.
In 1967 the O'Neil Fund was the top performing fund in the country - +116.3 %
barely edging out Fred Carr and the Enterprise Fund. At the top of the market in
1968 Wm. O'Neil + Co. was on top of the world. Bill was one of the highly
successful young "gunslingers" of the '60s. Money was pouring into his
individual and institutional accounts as well as several mutual funds he
managed.
To make a long story short, the 2 phase 1969-1974 bear market hit. Bill was
never able to make any money on the short side. In fact every time the market
hit a short term selling climax, Bill thought the bear market was over and began
buying the stocks which were breaking out, only to be stopped out quickly. By
the time the market hit it's final low in 1974 Bill had lost nearly all of his
accounts and was, basically, out of the management business and in the
publishing business with his chart services. During the 2 major down legs of
this very, very long bear market, neither "cups & handles" nor CANSLIM worked.
Nothing worked on the long side. Keep in mind that these are only bull market
strategies. Much to Bill's credit he stayed alive and survived to play another
day. He is an amazing guy. A great innovator and no one is a better stock
picker. Mostly though, he does NOT give up. I would think that his books and
ideas should be at the top of any new traders reading list.
Jim
____________
Brian Massey wrote:
> "Cup with Handle formations is a new"
>
> New? How new? Sometimes it works sometimes it doesn't. Most recent
> example of when it doesn't is PFE earlier this year. The crowd was touting
> a picture perfect cup and handle formation and it totally failed. When they
> do work though they are explosive in my experience. As for the newness of
> this pattern it can't be that new because William O' Niel wrote about it in
> his original book and he had been using it for years. And where did he get
> it from.
>
> > -----Original Message-----
> > From: M. Simms [mailto:prosys@xxxxxxxxxxxxxxxx]
> > Sent: Friday, February 25, 2000 10:41 AM
> > To: JMMain1000@xxxxxxx; network@xxxxxxxxxxxxxxxxxx;
> > omega-list@xxxxxxxxxx
> > Subject: RE: Re[4]: trends
> >
> >
> > Cup with Handle formations is a new retracement concept that supposedly
> > works....
> > never backtested it though.
> >
> >
> > > -----Original Message-----
> > > From: JMMain1000@xxxxxxx [mailto:JMMain1000@xxxxxxx]
> > > Sent: Friday, February 25, 2000 9:44 AM
> > > To: network@xxxxxxxxxxxxxxxxxx; omega-list@xxxxxxxxxx
> > > Subject: Re: Re[4]: trends
> > >
> > >
> > > In a message dated 00-02-25 09:18:20 EST, you write:
> > >
> > > << But if you don't enter
> > > at the high price you will miss some big moves, and reduce your systems
> > > performance. >>
> > >
> > > That is exactly the problem with retracement trading:
> > >
> > > 1. You miss all of the initial moves.
> > > 2. The retracement may be a reversal.
> > >
> > > I've had mixed results with retracement trading.
> > >
> > > So, is it better to try to call trend reversals and take a breakout
> > > position during the initial move or is it better to wait for the first
> > > retracement?
> > >
> > > Jim
> > >
> > >
> >
> >
> >
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