William J. O'Neil, RIP

[Rams Fan]

I couldn't get past half way through his Book, it just seemed about some Dancer puoncing around the World sending Telegrams to his Stock Broker after noticing the stairstep pattern.

You and I had two polar opposite reactions to it then. I have bought and gifted at least 100 copies easily. I own many copies of different editions for my own personal library. I read it at least once year on the beach wherever we happen to be vacationing. When my children were little, I read it to them over a series of evenings as a bedtime story.

That book changed my life.!

The difference might be that I read it when I didn't know anything, and you read it after you thought you knew it all.

I'm half joking, of course, and you know I mean no offense. However, you must see what I mean: "some dancer ... noticing stairstep patterns."

You see, when I read it I hadn't the slightest concept of "stair step" much less that price charts existed and that people traded based on "patterns."

I did understand his description of "boxes stacking up on one another." But that didn't then and still doesn't have think in terms of "pattern." It is to me a description of the way stocks behave when smart money is accumulating their positions.

When I first read Darvas, I was literally a "babe in the woods" with respect to the stock market. And as I've said several times, I recognize that that I was very fortunate to have been a green unknowing newby when I first read those great books, and I had the self-awareness that I had no clue what I was doing or how to make money in the stock market.

 

[Rams Fan]

Darvas had trouble making money when he was too close to the action. He did better when he was using only days old info from newspapers.

This is a very good point. I spend little time during the week on my positions other than during earnings. If a stock I own is up nicely from where I bought it and it is coming out with earnings, I leave it alone. If, on the other hand it is not doing well, I'll close it out into earnings even though that means I might be buying back the next day at a much higher price.

If I have a stock on my watch list that is coming into earnings and it reacts positively to those earnings with a gap higher the next day, I'll pull it up on a 1- 5- 15-minute chart, and I'll start buying if the gap is real and not getting sold.

But if no earnings event is immanent, I leave things alone and look at the weekly charts on Saturday morning.

Otherwise, I make my decisions on the weekend after the weekly close. If a stop loss is touched off during the week, it takes me out automatically.

But I do not watch my stocks minute by minute, day by day. If the day trading jones is hitting me, I'll trade futures.

 

[murray t turtle]

Thanks for the lengthy reply. Good to see @spy and SML etc get a mention in there LMAO

While I understand Darvas's historical contribution to Stock trading, I couldn't get past half way through his Book, it just seemed about some Dancer puoncing around the World sending Telegrams to his Stock Broker after noticing the stairstep pattern. Maybe the second half of the Book, the half that I didn't read is meater.

%%
I never did gat much out that also;
Mr Bernard Beruch book h[A WO'N recommended read !!]seemed much more helpful= ''never try to buy@ bottom + sell @ top = Cant be done except by liars,

 

[proftradingjourney]

Bill's strategy is timeless. Truly such sound principles. RIP you American patriot and hero!

 

[Voron77]

SMCI weekly chart

View attachment 316136

I'm reading WON's Book now -- went through the first several chapters. Regarding the SMCI chart, I'm struggling to see how his base patterns would apply here. Even if I squint my eye and identify candidate bases, WON would've labeled them faulty. The shakeouts are violent and would've taken the stops out. 10-week MAs are violated regularly with prices closed below. I'd appreciate a narration from WON disciples . Thanks!

 

[Rams Fan]

Base on base, with the second flat base also having double bottom with undercut of the first low, high volume with each advance out of prior consolidation. Price found buyers at the 50-day moving average, and when price did close below the 50-day SMA, it recovered quickly.

Fundamentals and technicals have been in place. Perhaps more of a Darvas stock than a WON stock?

I know a number of people who consider themselves far more serious followers of IBD and William O'Neil than I am. SMCI has been a "fan favorite" of that crowd since early 2022, and it really gained favor in the Fall of 2022.

 

[Voron77]

Thank you. The second base does not sit strictly on top of the first base, but I'm nitpicking. Would be interesting to see the historic IBD rating back in the fall of '22. Because of course, it looks good now, post factum.

 

[Rams Fan]

Thank you. The second base does not sit strictly on top of the first base, but I'm nitpicking. Would be interesting to see the historic IBD rating back in the fall of '22. Because of course, it looks good now, post factum.

https://www.investors.com/news/tech...-micro-computer-beats-june-quarter-estimates/

Your nitpicking is based on a false assumption that bases can't overlap. They can, and often do, especially when a stock attempts to breakout and the general market is in or re-enters a correction.

Be careful thinking you know more than you do. In the market, flexibility and humility will make you a lot more money than rigid adherence to inflexible misunderstandings ever will.

 

[Voron77]

Thanks again -- this is helpful. I do agree that rigidity is uncalled for in trading. Rigid rules are easily programmed and thus can be arbitraged away.

 

[Rams Fan]

The book is the starting point and the foundation, but then comes the work. If you think you are some kind of market expert because you've read O'Neil once, you are in for a rough ride.