May
20
From The Ashes Rises the Phoenix..
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Well it’s been several months since we’ve done a blog and some of you may have thought Daryl and I have fallen off the face of the planet. Au’ Contraire! We have been working feverishly behind the scenes on some exciting changes in Daryl and my synergistic business relationship.
One of the primary focuses over the winter and for much of the spring was an intense development of new course videos to supplement and enhance the power of the Bottomspringers momentum trading courses. We think we have succeeded in creating a powerful visual representation of our unique style of high momentum stock cycle surfing.
With that major project out of the way and some finishing touches being put on the web site changes we are almost ready to begin a national product launch that has been in the works for the last six to eight months. Many of our subscribers are aware of some upcoming changes in our trading club and trading pond report format, but I’ll share it again in this blog for some of you who are on the fringes and may have wondered why you haven’t heard from us much lately.
Daryl and I have been pretty much in burnout mode for the last few years with various business ventures, trading research, trading course development and running the Bottomspringers trading chat room. Needless to say, the days have been very long for quite awhile and our focus for much of 2008 will be to attempt to put some balance back in our lives.
For two people with a lot of varied interests that may be a challenge but we’re up for it. In late 2008 after we have regrouped and accomplished some projects we have put on the back burner for quite awhile such as; the national Bonsai Elite Wavetrader Trading Course and videos product launch, writings of additional books-this time on alternative healthcare, other saving the world projects, we will revisit having a more active trading club.
But in the meantime, we are going to turn the Bottomspringers club chat room down several notches and maintain sporadic and limited hours during much of the year. Depending on our schedules from week to week it may mean very active chat during some weeks and not so active during other weeks. Anyone who likes fishing can understand the compulsion of “stockfishers” who are constantly looking for the next big fish, so it’s hard for us to stray too far from the chat room-so we will be around, just in a much looser and unscheduled fashion. As I write this I’m aware that in the last week I personally have been in the chat more than I have in awhile with this looser format, but this again will change from week to week. Due to our limited schedules in the trading chat room we are not accepting new members during 2008.
Although we were very pleased with the results of our trading pond performance in 2006-2007 with most of the markets top performing stocks of the year cycling through our top stocks trading pond we decided to make it even easier for our subscribers to hone in on the markets top potential momentum plays with much fewer picks as well as an improved and more finite scoring model in the Trading Pond report and more behind the scenes research. This will mean an even greater focus on the mega-mover monster stocks heading into new long term cycles that we dined on through much of 2007 which are even more influenced by the action of the broad market.
As always, the broad market conditions will have a lot to say as to whether a stock pick gets considerable follow through or just so-so. The BEW trading systems’ primary focus has always been on identifying stocks heading into new long term cycles and we believe this approach will get us back to the core of the Bottomspringers system. Although the short-term swing trading aspects of the BEW system can be very powerful it requires much more vigilance trading and we have never been about traders needing to be glued to the computer as a primary trading approach.
We hope that the abundance of good momentum trades continues in 2008 but have no illusions that the market conditions will be challenging for the near future in light of the ongoing sub-prime mortgage mess. Despite that “cloud” hanging over the market-the last several weeks has offered some gangbuster trades in the oil and energy sectors.
A multitude of explosive breakouts have occurred with the price of a barrel of oil shooting through the $100 market with nary a pause to the $129 per barrel mark. Some of these breakouts resemble the 1990’s tech bubble stock plays with stocks like FPP rocketing 515% in 6 weeks, GEOI up 160% in 2-1/2 months, PDO up 450% in one month, MXC soaring 865% in ONE MONTH, CLR 30% in 2 weeks and on and on. These stocks due to their high levels of volatility were safer as a Bottomspringers club swing trade-and between Daryl and the guys in the trading club-spotted some pretty good entries on these mega-movers. We even managed to lasso a few for the Trading Pond CLR, GEOI and SOL-up 50% in a week.
MXC up nearly 865% in one month (and may not be done yet)-trading club pick around the $10 mark by Daryl Thompson a classic Bonsai Elite Wavetrader play!!
(Click chart to view larger version)
The broad market action forecasted the potential of this rally with a confirmation bottom on the DJ-30 in March which offered some great mega Bonsai stock waves.
We’ll be back in touch soon and until then…..
Yours for better trading and investing..
Paul Lemal
Daryl Thompson
Bottomspringers.com
Nov
5
The “Big Picture”
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The concept of the big picture in stock trading is not one that many traders pay attention to. I even get caught up in that myself-with one recent especially painful reminder as I only looked at a 6 month time frame on a chart and missed the fact that a pullback had maintained support above a long term trend line. Several hundred per cent later I’m still beating myself up about it.
When lots of charts are coming at you during the day it can be easy to lose the big picture. The strongest momentum breakouts are those that typically break out of long term trend lines or into new high territory. Not scrolling back far enough to encompass many months or even years of trading history can lead to inadequate stock filtering and the potential to miss some of the better performers. Some recent long term breakouts that are looking good are: GSOL, ABAX, GIGM, ARTG, SOHU and SINA. Some of our biggest movers in the last year came out of long term trend line breakouts i.e., DRYS, ISRG, RIMM, BIDU etc. to name just a few.
This “Big Picture” concept gives me an excuse to address one of my pet peeves with politicians. I have been watching with great interest the unfolding of the presidential campaigns and it continues to amaze me how so very few of them say anything about “The Big Picture” in the process of proposing reforms to the health care system. No matter how much money is thrown at the nation’s health care problems it will not be solved by a medical approach. We have gone mega-billions down the road of a pill for every health problem and as a nation we are not any healthier. Diseases are running rampant and getting worse. What it will do is fatten the pharmaceutical company’s wallets with a fair share of that filtering back to the various campaign committees. This sounds like a pretty good system for continued abuses especially when any reforms to be made have to be made by the very politicians benefiting from this broken system.
Mike Huckabee a Republican candidate who is still barely registering in the polls alluded to our failed health care policy and how prevention is the key to turning our health care mess around. Most of the first-tier candidates know this and very few say much about it. I guess self-responsibility is not as sexy as the “magic pill” approach which sure sounds good to constituents who only have time to listen to sound bites. I recently heard of a book called “Attention Deficit Democracy” which probably greatly describes the American voter and it sounds like a must read. Maybe the “waking up” process is when the piece of the pie that their health care dollar is going to is double what it is now. At our level of “paying attention” that should not be too far around the corner.
Paul Lemal
Daryl Thompson
Oct
9
As you should know by now, both Paul and I were greatly influenced by the teachings of stock trader extraordinaire, Nicolas Darvas. His book “How I Made $2,000,000 in the Stock Market” should be required reading by all serious investors and traders.
Why do we feel so strongly about this book? Simple, the basic system found in this little book has created millionaires from its successful application. Darvas’s basic analysis of stock momentum has led to the development of a slew of trading systems, especially since the advent of personal computers which has taken the Darvas style of trading to a whole new level. While most people misunderstood it, the many who persevered and mastered the system went on to become multi-millionaires themselves.
Here are a few incredible examples…
Dan Zanger a swimming pool contractor in California turned $10,000 into $42 million in just 2 years. He is currently recognized by Trader Monthly magazine as one of the top 100 traders in the world with an annual income of $25 million.
Gil Morales founder of Sierra investment capital managed a 1 year return in 1999 of 971%.
William O’Neil founder of Investor’s Business Daily built a $5,000 account into $200,000 in 2 years and used the money to buy a seat on the stock exchange parlaying his future income into the founding of the newspaper.
Dave Ryan, a protégé of William O’Neil and a big fan of the Darvas style of trading entered and won the U.S. Investing Open championship with back to back annual returns of 160%.
The list goes on and on. Obviously, the Darvas system for stock trading works, and works in a big way.
What can we learn from Nicholas Darvas?
Obviously, many things-especially when you come to realize that success does leave clues and by modeling what has worked, we may be able to achieve similar results. The study of success can be the secret tool for mimicking the results of these top traders.
Many of the top human potential movement teachers remind us to learn that success can be achieved by “modeling success”, what a coincidence. Identify that which you want to achieve and learn from the source. Stock charts can teach us a lot. The top stock charts can teach us much about what to look for in the future.
The above people who modeled Darvas strategy obviously achieved excellent results also. Nicholas Darvas’s system for identifying stock movement laid the foundation for the Bottomspringers system. A basic understanding of momentum analysis led to the discovery of “momentum signatures” that have enabled us to super-charge the Darvas trading system to make it the “Darvas on Steroids” trading system. Stocks that come out of basing areas to go on to rocket 50-100%+ in a few months or even weeks are not uncommon in the Bottomspringers trading club. Having developed an understanding of stock cycles and momentum allows us to nail some pretty big fish.
Some recent examples in the club are:
CEA +350% in 5 months, BIDU +135% in 5 months, ISRG+100% in 6 months, ASTI 120% in 1 month, DRYS +100% in 2.5 months all of these were stocks posted in our “Top Stocks” Trading Pond service.Some examples as late as last week with the breakout of the Dow to new highs led to some explosive breakouts in China stocks-for example KUN up 200% in 2 days, CHNR up 300% in 4 days, RCH up 300% in 3 days…..yada yada.
Why does this system work so well?
Because it captures the two human emotions that power much of stock movements-fear and greed. Watch a climax breakout and you’ll understand what we are talking about.
“How I Made $2,000,000 in the Stock Market” is a wise choice for the basic text of a super-successful stock trading system that has proven itself over and over again in the real world of stock trading. The book even goes over the dumb mistakes Darvas (and probably every stock trader just getting started) made in the beginning. That’s highly valuable information in and of itself, since you can avoid the same mistakes! (And – I have to say – they sound very familiar!)
Now this may sound like an ad and pardon us if it does-but we think we have taken the Darvas style of trading to a new level with the power of some of the trades we call in the trading club. Many of our bigger trades produce 100%+ gains in days and weeks whereas many of the Darvas trades lasted months.
This style of trading which is based on a study of the stock markets best performing stocks of the last 10 years takes off where the Darvas system leaves off with real world analysis of these stocks in a 21st century trading environment that has changed dramatically due to the higher levels of volatility in this electronic trading era.
For more information on the course, click here.
Sep
27
The Merging of Two Styles of Trading
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I have been asked several times recently how Daryl’s style of candlestick trading relates to the Bottomspringers system of high momentum stock trading and in my mind it is a perfect adjunct. This is especially true on some of the major breakouts of true “Bottomspringing” stock’s that come about in the course of a trading week.
Daryl’s hybrid version of Japanese candlestick trading is perfect with a system like the Bottomspringers model because stock’s reaching a price extreme often give perfect reversal signals (MONSTARS, BullSHOTS, BEaSTS, oh my!) on the very day of its reversal. The ability to spot turning points in a stock’s consolidation to the day is what can lead to the huge breakouts that we nail on a daily basis in the trading club.
Where the Bottomspringers form of cycle analysis may be the “roller” in the paint tool kit, candlestick trading can be seen as the brush cutting in the fine edges. It is a perfect wedding of two styles of trading. My initial forays into the development of the Bottomspringers stock trading system included ample studies in candlestick analysis but the strength of a price volume approach that used cycles and timing models became the core attribute of the Bottomspringers system and in order to keep the charts squeaky clean so that I can see (without distraction) every subtlety in the price action, I went with a simple bar chart system in the development of the system. Many of the traders in the club use candlestick analysis exclusively and it seems to work well for them. An active trading style is especially suitable for the use of candlestick charts that when used properly can signal to the day a change in a stock’s demeanor. This is quite necessary when you choose a shorter time frame for trading. Watching paint dry is not many traders idea of an active trading approach.
The other point of Daryl and I teaming up is that on a personal level I just like the guy. Daryl is a first-rate southern gentleman. No matter how rattled he may get by situations going on around him that what comes out of his mouth is just classy. He is perfect for smoothing over stressful situations because he doesn’t let his emotions get in the way of doing what’s right. I was raised north of the Mason-Dixon line (a town called Weirton, West Virginia) a little ‘burb of Pittsburgh, PA-with a rugged as steel persona to the whole community-nice people but don’t mess with them. Why do you think the Pittsburgh Steelers were so tough ;). Anyways getting back to my point it was refreshing to meet someone like Daryl who is a very nice laid back person and I’ve enjoyed working with him.
He also is no slouch at copywriting which he seems to enjoy just about as much as trading and has been compared by people who know more about this stuff than I do as being up in the league of some of the big name copywriters out there-I bet you didn’t know that about him. I have been a little pushy with him lately on finishing up some critical copywriting for our national marketing push we are hoping to do as early as next month and the old southern gentleman in him has been patient with my impatience.
The other thing that I really liked about Daryl when I first met him was that he really wanted to make a difference. Like myself, he wants to make the world a better place and this “big picture” approach to our business model makes it much easier to make decisions since we are on the same page. We hope to in the next several months put out more educational material on our individual styles of trading. Both of us have been pretty burned out over the last 3-6 months with trying to wear too many hats. This is the type of business that it is difficult to just delegate stuff and that is obviously something we have to both get better at in order to reach more people.
Well, time to go check some morning stock charts…….the pond has been pretty full lately and whether that will continue over the next few weeks depends a lot on the trading action in the indexes at this critical level of price resistance . There is a very good chance of that resolution taking place this week. Anyways, see you in the club!
Paul Lemal
Daryl Thompson
Bottomspringers.com
Tradeyourwaytowealth.com
P.S. By the way, the AmericanUtopia site I have long talked about and is still in the works is where I will eventually have items of interest like this which follows but bear with me-the plate is full as usual. Many of you know of my passion with integrative medicine having once run an Integrative Healthcare Association and one of the members of our trading club introduced me to an organization called the Natural Solutions Foundation (healthfreedomusa.org). I received an e-mail from them when I opened my e-mail up this morning regarding a Doctor in Texas-Dr. William Rea a practitioner of environmental medicine who has been threatened with de-licensure because he does not practice a brand of medicine that their buddies at the insurance companies approve of-please read this article-(http://www.healthfreedomusa.org/index.php/?p=416) if it doesn’t get your blood boiling-then I would place a mirror underneath your nose and see if you are still fogging it up 
Sep
6
Many of the huge breakouts that are called in the trading club are a by-product of an understanding of a key component of high momentum stock trading that is difficult to quantify due to the inevitable subjectivity that comes along with the vast number of variables depending on the stocks historical trading tendencies as well as where it is in its super-cycle, how date-driven the news is towards final resolution of any expected outcomes, where the stock is within the short-term cycles etc.
A stock that has had poor pattern quality in the long term can quickly turn things around and have excellent short or intermediate term pattern quality increasing the likelihood of identifying breakout zones. The pattern quality of a stock whether it is short-term or long-term is often a direct reflection of the quality of the news driving the breakout. When a stock that has historically had a skewed (choppy or indistinct) trading pattern suddenly releases news that may potentially have a dramatic effect on corporate earnings the whole demeanor of the trading action can change dramatically.
The strength of the breakout followed up by strength in the consolidation can tell us much about its future potential. The quality and strength of the news can create quality in the trading pattern as momentum breakouts that catch our attention tell an ongoing story by how they act in pullback and consolidation zones. Without getting into a vast analysis of pattern quality since much of this is covered in the Bottomspringers Trading Courses let me give you a recent example of excellent pattern quality that caught our attention in the Bottomspringers trading club and led to a 30% gain in 6 days.
CVTX, had a 2 month breakout in April and May of 2007 for a 50% plus gain with a soft landing pullback coming off the wave 1 breakout finding quick support a little over a dollar lower during its pullback from this excellent initial wave. Having a basic understanding of the “attention windows” concept which is the Bottomspringers timing models that was developed based on a study of the top performing stocks helped us nail the follow-up breakout going into wave 2. This study uncovered some consistent timing cycles that high momentum breakouts operate within and we use it liberally in the trading club.
The pullback bottomed out on day 13 and respected the previous price ceiling allowing an excellent 4 day opportunity to scalp the pullback lows. Had you been fortunate enough to catch nearly the exact bottom of the pullback you would have had nearly a 90% gain in a few weeks time using margin which if you are going to take the additional risk better to do so on a stable pullback then a high-flying breakout.
Depending on the stock, and the nature of the original breakout, a deep pullback operating within the short-term cycles can also often spell out quality and catch the attention of those with a trained eye that are able to discern the difference between weakness and strength despite the depth of the pullback.
A prime example was EXM in August of 2004 which doubled in just a few weeks before pulling back into what we call the “Millionaire Maker” pattern in the Bottomspringers trading club. The pullback despite the fact that it gave back half of the gain in just a few days signified quality due to its sheer strength. Any stock that forms a handle in its prices within 5 months of a previous high momentum breakout on the left side of its cup is screaming watch me closely-I am capable of some big things. These are rare birds and we pay attention to this pattern because when they perform they can be some doozies. So learning to distinguish where a stock is is in its super-cycle and taking a look at the big picture can help you in filtering out the gems from the so-so stocks.
EXM managed over a 500% gain in a 6-week cycle off of this millionaire maker pattern running from near the $10 mark up to $65 in one of the top performers of 2004.
Ok, so enough on stock trading for this week. By the way, on a personal level I am about to venture into the somewhat scary world of home studio recording and would like to know if anyone can recommend the best software available (for the novice). Trust me, I am no world-class musician and truly know only the basic guitar chords per se but like many morning shower singers who want to take it to the next level-the concept of recording music on the computer (not to mention youtube.com) has kind of sucked me in. Although I have been writing songs since my teens I have not gone much further with it than some amateur open mic nights and a few singing classes so I hope I’m not having some false illusions about my skill levels in this area. Either way, if nothing else it will be expressing some pent up right- brain creativity. Since I am big into not re-inventing the wheel, if anyone who has had experience with actually using some of these music software programs can point me in the best direction it would be appreciated-please respond via plemal@bottomspringers.com. Thanks for any help!
Sep
4
It is my distinct honor – and pleasure – to be posting my very first blog post here at BottomSpringers.
As I state in my “About Us” page, I basically live, eat, and breathe the stock market. It’s the most interesting – and potentially profitable – game that I know of. A game that Paul and I have gotten pretty good at.
In this blog, we’re going to be sharing some of our hard-fought for secrets we’ve learned in the trenches – tested in the real world of trading – using our own hard-earned money and getting battered, bloodied and bruised in the process. This is not some ivory tower, theoretical “laboratory” where we just throw out the latest system we’ve found that seems to work in a particular market. Not hardly. We only believe in the truth – the things that really work – and not the dozens and dozens of bogus, misguided theories, systems, and flat lame-brained ideas that I constantly see bandied about in certain chat rooms on the Internet. Or in certain high-priced seminars. Or in major brokerage houses and Ph.D-led hedge funds that self-implode.
By the way, that proves a HUGE fact in my mind.
You don’t even have to be “smart” to be a highly-successful trader and investor. In fact, that could be a gargantuan detriment. Whenever you think you are smarter than the market, that you have everything “figured out” – that you know exactly what the market is about to do, then you are headed quickly to self-destruction. Just ask the geniuses who put millions into the subprime mortgage market.
Yes, I’ve seen some pretty crazy stuff over the past 17 years I’ve been in the market. Maybe we’ll share some of those stories as well on this blog.
But, as Paul mentions above, there is more to life than the stock market – or making money. Money is just kinda how we keep score in this crazy game. You see, Paul and I are going to give our best shot at doing one simple little thing.
We are out to change the world.
We want to make it just a little better off because we were here. As you can see at the top of this page, our motto is Changing the World, One Stock Trader At A Time.
What do we mean by that? We mean educating those who are serious about learning this great game, and then having that person go out and make a ton of money in the stock market, and then taking back some of those gains and giving back to the world – to society – in some form or fashion – whether it be tithing to their church or synagogue, or committing funds to some charity to help out those less fortunate, or to simply help out a friend in need. Then that person could help his or her friend do the same thing, and so on and so on.
Anyway, with the quasi-merging of BottomSpringers.com and Trade Your Way To Wealth, our goal is to create the strongest, highest level of profit-producing website combo in the world related to stock trading. There truly is no other system that we know of capable of producing the kinds of lightning-fast profits we’re talking about here.
So let’s get started, shall we?
We’ve got a world to change.
Aug
28
Hello Fellow StockSurfers: Wow, what a stock market ride we have had in the last few weeks. What can you say except sheeshhh…what next!? Sheeesh is a common term we use in the Bottomspringers trading club and I’m not sure any of us have figured out any one size fits all definition for the term but it seems to crop up when “surprise” is in the air. But I digress.
Anyways, this is the first of what I hope will be many blogs that myself and Daryl Thompson will post on the stock market as well as other various topics of interest. This is an opportunity for you to get to know us better and learn more about us-our likes and dislikes as well as our individual styles of stock trading. These blogs, although they are somewhat focused on stock trading – we can’t help but include other things that interest us, because there is, in fact, more to life than stock trading and one of the original intentions of the Bottomspringers trading club was to; as the motto on our e-mail states: “bottomspringers.com offers high impact training on financial, life and health issues and is home to the most powerful stock trading course ever-”The Surfer’s Guide to Stock Investing”.
Now the training on the financial, life and health issues is just around the corner as I am finding more and more time to finish some writing and research in other areas. Some long awaited books on integrative healthcare that I have had in the pipeline for some time are still on the way despite the many delays as a result of having spent the last year on writing some advanced courses on the Bottomspringers style of stock trading. Now that these are finished and things have calmed down somewhat we are hopefully on to a little less stressful lifestyle (I know, I know practice what you preach). The stock market, will in time, as it always does offer plenty of opportunities for profit once things settle down. Under these kinds of market conditions, a more nimble approach is necessary but we think we have just the ticket in the trading club ;).
One of my own personal goals with having created the Bottomspringers style of stock investing was to create the financial freedom I desired to live the kind of life I wanted to live without limitations. Like many people I spent many years working god-awful hours with no end in sight. My wife might say-some things never change… but hey when you are having fun the rules change a little. As many of you may have learned in studying our stock courses, I am in the process of beginning an organization called AmericanUtopia.org for promoting some of these ideas and many of the resources I have mentioned previously will be on the website soon which is still presently under construction.
If you have not yet had the opportunity to drop into the Bottomspringers trading club to see what all the fuss is about we would love to have you. Well, I’ll have more to say about the stock market in the next blog but right now not a whole lot to say but if you are going to surf these choppy waves make sure you hold onto the surfboard tightly! Until next time….The Stock Surf-meister Paul Lemal (AKA “Savrad”)
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