Trade Like an O'Neil Disciple: How We Made 18,000% in the Stock Market

7.2. CHART EXAMPLES

What follows are some actual buy and sell signals generated by the model along with our commentary. We have included the most challenging years of our trading careers, namely 2008–2009, so you can see how the model functions when fully challenged by difficult market conditions. We have also included the difficult period known as the Crash of 1929–1930 to show how the model functions in an entirely different era using the same systematic rules. These charts should help give you a clearer understanding of the various types of follow-through days (FTD) and distribution days (DD) that can occur. Readers who have further questions should contact Dr. Chris Kacher at [e-mail], or can refer to the web site address www.virtueofselfishinvesting.com.

A few notes about the charts:

• Black tick marks correspond to distribution days (unless the black tick has an explanation saying it is not a DD). "B" corresponds to a buy signal, "S" corresponds to a sell signal, and "N" corresponds to a neutralization of the immediate prior signal, whether buy or sell.

• Buy signals are neutralized during the trading day once the NASDAQ Composite trades below the lower of the following: (1) the low of the buy signal day or (2) in the case of a gap-up, the closing price the day before the gap-up buy signal day. Of course, if a sell signal occurs, the buy signal is neutralized. If the NASDAQ Composite has hit new intraday highs for at least five trading days since the buy signal, ...