Russell 2000 Escapes with Gains as the Market Finishes well off its Lows of the Session

It all began in Japan where the Nikkei hit an all-time high only to end its day lower down by more than 7%. Selling swept the globe where Europe was hit hard, but it was the United States market to see some resiliency. A better than expected Jobless Claims figure did help the mood, but it was likely to due to the larger than normal POMO from the Federal Reserve. More than $3 billion was pumped into the market from the Fed and was likely “the” catalyst pushing stocks off their lows. At the open the market hit pretty extreme oversold readings and the move off the lows is not all that surprising. Volume was lower on the day even with the lower open. Institutions weren’t all that excited to jump right back into the market. Our uptrend was hit, but it is still standing. Yesterday was a great example of why chasing stocks well beyond an acceptable price is dangerous. But, panic selling is just as dangerous. Plenty of stocks gapped lower like DDD to only close much higher displaying excellent strength. Reacting with emotion will not get you anywhere but heart ache city. Avoid making costly mistakes and join Big Wave Trading! We’ll steer you clear of making mistakes. Get on board. Sentiment from inviduals jumped to lofty levels, but away from their most extreme readings. II Bulls hit 55% an extreme reading, but AAII Bulls only registered 48.97%. Near 50%, but still below the ’13 high as well as ’12, ’11, and ’10. AAII bears slipped to a new low for the year at 21.58%. However, it is still well above the readings seen in ’10 and ’12. We were at lofty levels, but we simply cannot declare a market top without further evidence. That evidence is price and market leaders. Anything is possible in the game we call the stock market. April we had piled up quite a bit of nasty distribution days and we were able to climb out of it. Will this time be any different? Perhaps, but we we aren’t going go out and declare a top. It boils down to price trends and your process to take advantage of price trends. We are sticking with our process. Cut your losses and ride your winners.

Turnaround Tuesday lives up to its name as the Dow leads the Market higher

Void of economic releases the market did get showered with more than $3 billion in asset purchases from the Federal Reserve. A hiccup in the morning was quickly support as the Federal Reserve Open Market Operations flooded the market with fresh new cash. Over Europe the DAX closed in the green for the 11th straight day. The index has been up 18 out of 20 days since the April lows. We have witnessed an impressive run for the DAX and on the heels of the Nikkei continuing to push higher into the stock market stratosphere. Non-stop QE and ZIRP have juiced gains, but who are we to judge other than to ride the wave higher. We’ll get a few economic reports out tomorrow, but the market will certainly react to Bernanke and the release of the minutes from the last FOMC meeting. The trend is your friend. There really isn’t much to opine regarding this market. Other than the non-stop upward mobility prices have found themselves in. Sure we can dive into why stocks are trading at a premium to EBITDA, but would that make a difference? At some point we’ll see a correction of some order of magnitude. However, no one knows where or when it will come. For those like Peter Schiff who were in 2006 claiming we were going to collapse completely missed the upside from 06-07 even a good rally in the spring of 2008. If you follow a sound process following price and ignore the noise you’ll be able to capture any market trend in the future. from ZeroHedge It is interesting to see the amount of stocks in the market that are above their moving averages. It has been a while since we have covered this metric, but given the lofty levels we are experiencing I say why not. Nearly 80% of all stocks being traded in the United States (according to Barchart) are trading above their respective 150 and 200 day moving average. 76% of stocks are trading above there 20, 50, and 100 day moving averages. These are certainly “lofty” levels, but we have seen these levels before. Any outcome is possible and having a sound repeatable process is what will set you apart from the pack in terms of solid gains.

In a rare move Stocks end lower; Gold and Silver find their Footing

Heading into the week the US market once again watched the Nikkei continue to move further into the stratosphere. Futures were pretty anemic heading into the trading session today. Overnight news focused on the plunge in precious metals as Silver and Gold were hit hard. Despite the negative open and sentiment both precious metals were able to find their footing and reverse to close positive. Each metal tested key points and perhaps have put in a short-term bottom. SPX briefly hit all time highs, but then were knocked off their highs of the session. Support did filter into the market helping the market to close off the lows of the session. All signs point for this market to continue higher and with Turnaround Tuesday tomorrow gains should resume. The interesting action today centered around the precious metals and one that could turn out to be a significant turning point in the struggling precious metals. GLD tested April lows today and with a bunch of volume showed tremendous amount of support. On the other hand SLV had dropped below its pivotal point only to plow through it today. Volume certainly is saying something for both precious metals. Was today a bottom for GLD and SLV? Is anyone’s guess, but we do have a clear exit in case this falls apart on us. Wednesday we’ll get a read on Existing Home Sales and the Federal Reserve meeting minutes. The focus on the language in these minutes over the “taper” of “halting” of the current money printing scheme will be nauseating. CNBC et al will have a field day with LIESman leading the charge. Price will lead the way for us. Focusing on our stocks and how they act is much more important than anything anyone can “guess” about the Federal Reserve meeting minutes. Stick with Big Wave Trading. Enjoy this week!

Big Wave Trading Portfolio Update And Top Current Holdings

The Big Wave Trading Portfolio remains under a BUY signal and currently has zero issues weighing on it presently. On the short-term the market is very extended in price compared to trailing key moving averages. Logic dictates that a natural pullback to some form of support levels (fibonacci, price lows, or a moving average) should occur on the short-term. However, when dealing with our current reality we know that we could easily melt-up further in this QE environment before a logical pullback does occur. With the current uptrend the way it is–where volume is not part of the equation in our analysis–price will continue to be our sole signal generator. During the past week, we did see the Nasdaq suffer what appears to be on the surface a second churning session. However, following this churning session, the Nasdaq subsequently went to new highs. Therefore, for now it is only a surface scratch. For those sessions to have any weighing in the overall model we will have to see further distribution days that then lead price below these two sessions. Until that occurs, we will continue to stay the course. There were no major developments this week in our personal stock holdings, other than the fact that we have not generated any new long signals the past three market sessions. We believe this might possibly indicate that the market is too extended on the short-term. In saying this, it would not shock us if we got new long signals on Monday. Our current holdings continue to look very solid and we see plenty of stocks setting up in very strong consolidation patterns (ie…INVN) that could easily be another launching pad for another leg higher in this overall market. The surf continues to be absolutely huge in my backyard home break and I am going to go out and enjoy myself until I get beat up too much or get stung one too many times by all of the man-of-wars that are out there. I look like I have been hit by lightning at this point. Have a great profitable upcoming week. Aloha. Top Current Holdings – Percent Gain Since Signal – Date of Signal EAC long – 243% – 12/17/12 HIMX long – 216% – 12/19/12 RVLT long – 134% – 3/26/13 CAMP long – 118% – 4/26/12 CSU long – 114% – 9/4/12 POWR long – 109% – 12/11/12 HEES long – 86% – 9/4/12 FLT long – 84% – 9/6/12 WAGE long – 75% – 1/8/13 GNMK long – 74% – 11/16/12 ASTM short – 71% – 7/17/12 SBGI long – 47% – 3/22/13 BBSI long – 47% – 2/13/13 INSM long – 45% – 4/19/13 V long – 43% – 8/31/12 GMCR long – 41% – 4/23/13

The Market hits the breaks Ends Lower

The morning did not get off to a great start with disappointing economic data hitting the market. Weak jobless claims and a Philadelphia Fed manufacturing index showed how disappointing the economy continues to be. By mid-day it appeared the market simply didn’t care too much about the weak economic data. Just as new highs were being reached sellers took to the market pushing the market to the lows of the session. While the market didn’t close on the lows there was certainly a feeling this could turn into something more sinister. One day doesn’t change the market and this uptrend remains in place. Last night we showed you how bullish the II survey respondents have become and today we got a read on the AAII and NAAIM. Neither survey was at an extreme in either direction. AAII survey bulls were less 40% and bears under 30%. NAAIM survey showed investment managers positioned bullishly at 84% with bears almost non-existent. Neutral appears to be the place to be in both surveys. Outside of the II survey there isn’t any evidence of exuberance from market participants. Now, CNBC guests are another story including their hosts. Stick with price. TSLA this morning offered a nice place for the second time in three days to take some profits. The stock may be topping in the near term. We certainly aren’t going to call a top in the stock, but after this kind of run it is prudent to lock in gains. No one knows where TSLA will end up in the long run, but how many cars have Consumer Reports given a 99 rating to? If you get a chance to see the Model S or Roadster they are good looking cars. There are a few Fed officials who have expressed the central bank will need to begin to taper its purchases of mortgage and treasury securities. Should they or shouldn’t they really isn’t much of a concern for us as we simply follow our pricing signals. Guessing on the direction of the market isn’t a sound strategy. Stick with Big Wave Trading to navigate the market waters. Have a great weekend.

Turnaround Tuesday Sends Stocks Higher as Trading Volume Jumps

The Dow closed higher on Tuesday for the 18th straight week moving higher by more than 100 points. Leading the market higher was the Russell 2000 jumping more than 1.25%. S&P 500 gained more than 1% while the NASDAQ lagged finishing higher by .69%. Surprisingly the VIX jumped more than 1.75% outpacing the S&P 500. Is a big point move coming? AAPL was hit hard during the trading session sending the NASDAQ lower and ultimately keeping the NASDAQ from bigger gains. Despite the AAPL sell off the NASDAQ found support along with the rest of the market pushing up into the highs of the session. Another bullish session for the market reminding those who are fighting the trend is very dangerous. Financials were a hot sector today led by BAC, GS, and JPM. These stocks have been lagging the general market since March. A positive sign for this uptrend would be to have financials participate. GS breakout is solid with volume following price something we haven’t seen very much from this market. Many will look to find the catalyst for the moves, but in the end does it really matter? No, all that matters is that you take the signal and ride the move higher. Volume pushed higher today and it was above average. We haven’t seen volume on new highs in quite some time and above average to boot. Low volume new highs have been a staple for this market and today was just a break from the norm. We don’t have any evidence today is a top in the market and given what we saw from Financials today we should continue to push higher. We can think of plenty of reasons for volume like we are beginning to see panic buying. However, until we see real signs of a market top we aren’t going to begin fishing for reasons. One thing that will be interesting to watch will be JGB – Japanese Government Bonds and how their yields move over the course of the summer. The US 10 year treasury has moved roughly 30 basis points from their lows. A big move in yields will have adverse effects on debt servicing costs. Something to keep an eye on as time moves forward. Rising yields are not good for those who have a heavy debt load. Until this trend ends we are going to stick with it.

Market Pundits Debate the end of QE while Stocks Close Mixed

A better than expected seasonally adjusted retail sales figure helped push futures off their lows prior to the market open. Volume was lower on the session staying true to form as far as Monday trading sessions go. The market did not get the benefit of POMO today, but tomorrow we’ll get up to 3 billion in fresh new money entering the market. This market has been relentless and today was simply another example of how powerful uptrends are. Leading stocks continue to power higher and we’ll look for this to continue. Mondays have not been kind to this market uptrend. Tuesday’s have been the best day and with 3 billion of fresh new money it wouldn’t surprise us to see another positive close for Tuesday. The only day of the week showing negative gains has been Monday. It was no surprise to see the mixed close where the NASDAQ barely posted gains and the Dow to end in negative territory. Unless a catastrophic event happens prior to tomorrow the trend has been for Tuesday to end positive and we’ll expect it to close positive. Does it matter when or if the Federal Reserve ends Quantitative Easing? It is a great question and one many will be trying to answer. Are you smart enough to figure out when it will happen? Or will you be like a 5 year old in a two hour car ride asking “are we there yet?” The reason why we’ll succeed is because we have a process using price signals. Taking advantage of natural price movements regardless of what our opinion may or may not be gives us an edge. What if the Fed never ends QE are you going to be taking advantage? Does endless QE even guarantee higher equity prices? Sure you may have the answers, but will the market prove you right? Stick with Big Wave Trading and you’ll navigate these waves with ease. Make it a great week. Cut losses short and ride your winners.

Market Pundits Debate the end of QE while Stocks Close Mixed

A better than expected seasonally adjusted retail sales figure helped push futures off their lows prior to the market open. Volume was lower on the session staying true to form as far as Monday trading sessions go. The market did not get the benefit of POMO today, but tomorrow we’ll get up to 3 billion in fresh new money entering the market. This market has been relentless and today was simply another example of how powerful uptrends are. Leading stocks continue to power higher and we’ll look for this to continue. Mondays have not been kind to this market uptrend. Tuesday’s have been the best day and with 3 billion of fresh new money it wouldn’t surprise us to see another positive close for Tuesday. The only day of the week showing negative gains has been Monday. It was no surprise to see the mixed close where the NASDAQ barely posted gains and the Dow to end in negative territory. Unless a catastrophic event happens prior to tomorrow the trend has been for Tuesday to end positive and we’ll expect it to close positive. Does it matter when or if the Federal Reserve ends Quantitative Easing? It is a great question and one many will be trying to answer. Are you smart enough to figure out when it will happen? Or will you be like a 5 year old in a two hour car ride asking “are we there yet?” The reason why we’ll succeed is because we have a process using price signals. Taking advantage of natural price movements regardless of what our opinion may or may not be gives us an edge. What if the Fed never ends QE are you going to be taking advantage? Does endless QE even guarantee higher equity prices? Sure you may have the answers, but will the market prove you right? Stick with Big Wave Trading and you’ll navigate these waves with ease. Make it a great week. Cut losses short and ride your winners.

Market Pundits Debate the end of QE while Stocks Close Mixed

A better than expected seasonally adjusted retail sales figure helped push futures off their lows prior to the market open. Volume was lower on the session staying true to form as far as Monday trading sessions go. The market did not get the benefit of POMO today, but tomorrow we’ll get up to 3 billion in fresh new money entering the market. This market has been relentless and today was simply another example of how powerful uptrends are. Leading stocks continue to power higher and we’ll look for this to continue. Mondays have not been kind to this market uptrend. Tuesday’s have been the best day and with 3 billion of fresh new money it wouldn’t surprise us to see another positive close for Tuesday. The only day of the week showing negative gains has been Monday. It was no surprise to see the mixed close where the NASDAQ barely posted gains and the Dow to end in negative territory. Unless a catastrophic event happens prior to tomorrow the trend has been for Tuesday to end positive and we’ll expect it to close positive. Does it matter when or if the Federal Reserve ends Quantitative Easing? It is a great question and one many will be trying to answer. Are you smart enough to figure out when it will happen? Or will you be like a 5 year old in a two hour car ride asking “are we there yet?” The reason why we’ll succeed is because we have a process using price signals. Taking advantage of natural price movements regardless of what our opinion may or may not be gives us an edge. What if the Fed never ends QE are you going to be taking advantage? Does endless QE even guarantee higher equity prices? Sure you may have the answers, but will the market prove you right? Stick with Big Wave Trading and you’ll navigate these waves with ease. Make it a great week. Cut losses short and ride your winners.

Market Pundits Debate the end of QE while Stocks Close Mixed

A better than expected seasonally adjusted retail sales figure helped push futures off their lows prior to the market open. Volume was lower on the session staying true to form as far as Monday trading sessions go. The market did not get the benefit of POMO today, but tomorrow we’ll get up to 3 billion in fresh new money entering the market. This market has been relentless and today was simply another example of how powerful uptrends are. Leading stocks continue to power higher and we’ll look for this to continue. Mondays have not been kind to this market uptrend. Tuesday’s have been the best day and with 3 billion of fresh new money it wouldn’t surprise us to see another positive close for Tuesday. The only day of the week showing negative gains has been Monday. It was no surprise to see the mixed close where the NASDAQ barely posted gains and the Dow to end in negative territory. Unless a catastrophic event happens prior to tomorrow the trend has been for Tuesday to end positive and we’ll expect it to close positive. Does it matter when or if the Federal Reserve ends Quantitative Easing? It is a great question and one many will be trying to answer. Are you smart enough to figure out when it will happen? Or will you be like a 5 year old in a two hour car ride asking “are we there yet?” The reason why we’ll succeed is because we have a process using price signals. Taking advantage of natural price movements regardless of what our opinion may or may not be gives us an edge. What if the Fed never ends QE are you going to be taking advantage? Does endless QE even guarantee higher equity prices? Sure you may have the answers, but will the market prove you right? Stick with Big Wave Trading and you’ll navigate these waves with ease. Make it a great week. Cut losses short and ride your winners.