In The Trading Cockpit with the O'Neil Disciples: Strategies that Made Us 18,000% in the Stock Market

Introduction

Those who have been trading for at least the past several years have likely experienced the frustration of trying to invest in the mostly sideways, trendless markets of the mid-2000s. Base breakouts were not in abundance as they had been in the 1990s, and most breakouts failed during these trendless years. But one must always take the attitude that what does not kill you only makes you stronger. So it was in mid-2005 that we began seeking answers to the basic conundrum dictated by the fact that we were no longer in the smooth, parabolic-trending market environments of the 1990s—the environment that we “grew up” in after we began our investment careers in the early 1990s.

Thus began the process of seeking a solution to this conundrum by looking for alternative methods to buying base breakouts in stocks that were becoming obvious to the crowd. Despite the sideways, choppy markets of 2004–2005, what does not kill you can make you stronger, and the pocket pivot and buyable gap-up concepts were born, concepts created by Chris Kacher (a.k.a Dr K) in 2005 as a result of these challenging markets that were rarely seen in the 1990s. While the pocket pivot and various other permutations of early and alternative buy point techniques were concepts that had been swirling around in the minds of both of us in the mid-2000s, it was Chris Kacher who, through painstaking statistical analysis and the study of thousands of chart examples, finally formalized a set of rules and characteristics ...