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I'm the guy who mentioned the "cup with handle" formation.
Thank you very much for this background on Bill O'Neil...it was a terrific
story.
I have a lot of respect for him as I am an avid IBD subscriber.
In the following is a cue for all "perma-bulls"......there are several on
this list who I believe only trade the long side. If we are now in a bear
market, looks like all "cup with handles" should "fail".....
we shall see.
BTW: Has anyone tried "inverting" the cup and seeing whether or not the
pattern works "in reverse" in an upside down view for the purposes of going
short ?? Maybe Bill just forgot to turn his head a bit !!!
> -----Original Message-----
> From: jparris@xxxxxxx [mailto:jparris@xxxxxxx]
> Sent: Sunday, February 27, 2000 6:28 PM
> To: frwd@xxxxxxxx
> Cc: List, Omega
> Subject: Re: trends/O'Neil
>
>
> 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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