Last Half-Hour Sell-Off Trims Day’s Gains

Slightly disappointing economic numbers failed to trip up the market at the open. GDP came in slightly below expectations and jobless claims were disappointing. Volume rose on the NASDAQ by a hair and dropped over on the NYSE. Plenty of stocks are holding up including the banks lead by big moves from BAC and MS. The last half hour of the session was not desirable for stock bulls. Over the past few sessions sellers have been dominating trade push stocks lower at the close. This may turn out to be nothing, but it is something to keep an eye on. Not a terrible day for the markets, but one that could have been much better. Sentiment indicators continue to be off extreme levels with the exception of the II survey. Even though the survey respondents for the II survey were less bullish they still remain historically high. Bears remain below 20% and have stayed around 20% for quite some time. However, the AAII survey showed a bigger drop in bulls closing the week at 36% while bears are at 30%. NAAIM survey showed managers were bullish, but less bullish than the week prior. Sentiment certainly isn’t screaming a top signal, but the bullishness on CNBC remains very high. Price action still favorable for the longs and this is what we want to see. Tomorrow’s end of the month trading will see volume spike at the close of the session. It will be interesting to see how the volume run rate will be prior to the final hour of trading. There are plenty of stocks holding up exceptionally well in this market. They are certainly signaling this market has more room to run to the upside. This is not a guarantee we go higher, but certainly we have signs we can go higher. On a longer time frame we do remain in an overbought condition. We can remain here for quite some time and with short-term indicators like the McClellan oscillator showing oversold conditions a bounce here into new highs wouldn’t surprise us. If we do fail here we can cut our losses and go with the flow. Cut your losses short and ride your winners.

Distribution hits the Market despite Banks moving higher

Void of economic data early morning futures were lower on the back of European stocks and Nikkei futures moving lower. Volume started the day mixed, but gained momentum throughout the session. Even though today’s session was a technically a distribution day we were able to close in the upper half of the trading session. The final 30 minutes of the trading session was not particularly strong as buyers were simply absent. The market is still above last week’s low and our uptrend still intact. Until evidence piles up we’ll continue to operate on the long side. An interesting development is what is going on in the Lumber futures market. Lumber continues to open limit down and is roughly 30% off its highs. Homebuilders ended the day lower, but remain near their highs. XHB has seen very little accumulation since April even though it has hit new highs. Distribution is clear in the chart and it is a prudent move to obey price signals in the homebuilders. Financials were winners on the day led by the big banks. You name them they were higher today. This is a good sign for the market when the financials are able to hold up in spite of the broader market sell-off. Even AAPL was positive on the day not contributing to the NASDAQ fall today. Keep an eye on financials as this market pushes forward. There are plenty of pundits in blogosphere as well as CNBC convinced we have seen the top in this market. Last Wednesday could have very well been the top, but how can we be so sure? We don’t have distribution piled high and our market leaders falling apart. Yes, TLT and bond yields are jumping, but this isn’t an all-out sell signal. TLT and HYG have been hit hard and something we’ll keep an eye on, but our focus is our stocks and the market. When are sell signals are given we’ll take them. At this point we haven’t been getting any and will respect our process. Remember to cut those losses.

Stocks Finish Higher as Volume Jumps above Average

Tuesday’s continues to be the day to be long stocks. The Dow is now 20 for 20 since January. This morning’s economic reports pushed stocks higher as the Case-Shiller index and Consumer Confidence indicators beat expectations. An intraday selloff tainted the day’s initial gains, but the market was able to close off its lows of the day. At this point, this market still wants to push higher and last week’s low is a key level to hold. Volume was above average on the NASDAQ as traders and institutions alike were active in the market. This uptrend remains intact and will take a bit more to knock this market off its feet. After last Wednesday’s reversal we have seen the market find support at lows. Thursday and Friday of last week are great examples of the support this market has. Sure, the Federal Reserve’s QE and ZIRP have propped up the market and we’ll ride this wave higher. One issue that could derail the Fed’s policy is a big jump in interest rates. JGB’s have more than tripled in a month, could you imagine if the US Treasury 10 year note triple in yield? Within a month the 10 year Treasury note has increased in yield by 50 basis points! Keep an eye on yields as bonds continue to sell off. You can track using TLT. No one knows when this uptrend will end, but plenty will certainly try to pick the top. Sentiment will be interesting to see how it has changed since last Wednesday’s market action. Will we see more euphoria among market participants? On a fundamental note here is a great chart from ZeroHedge: From ZeroHedge Ask yourself this question: Does it matter if you know how much organic growth has contributed to overall EPS growth? At some point when we go under a significant correction it will be important. What is important is how we react to price action and position ourselves to take advantage of a trend. It is a great talking point for a cocktail party, but it isn’t something you can take action on. A decent start to the week and we’ll continue to look for this market to push higher.

Big Wave Trading Portfolio Update And Top Current Holdings

The Big Wave Trading Portfolio remains under a BUY condition, despite the harsh sell off this past Wednesday. During such a strong uptrend with the averages constantly riding the 5, 10, 20, and 50 day moving averages higher, it will take more than a one day sell off event to switch our model. The only time a one day sell off would switch the model from BUY to NEUTRAL, in such a strong uptrend, would be if that sell off resulted in a loss of the 10, 20, and/or 50 day moving average on extremely strong volume. Since that was not the case on Wednesday, we remain under a BUY condition. The price action that has followed this session has been very constructive in all major market indexes and leading stocks appear to have weathered the sell off very well so far. For now, this is strong confirmation that the uptrend is still solid. We do understand that this could easily change very shortly if further selling does appear. However, skilled market operators understand that you can not make money on “what-if” scenarios. So for now, the trend remains up and we will continue to hunt for new long positions as signals arise. The intraday price action of Thursday and Friday was very constructive following the sell off, with the market opening lower and closing higher near the highs of the day on both sessions. This action, along with the lack of stocks breaking down in my short scans, is indicative of a market that wants to still move higher here. Another positive sign, for those long in the uptrend, is that very few holdings gave partial sell or full sell signals the past three market sessions. In fact, on Wednesday there was only one full sell, following that big sell off. So overall there remains very few real factual based reasons to turn fully bearish here. Have we started to hedge our positions? Yes. But only in a very minor manner. That being said, if we do reverse lower here, we are ready to increase our hedges and will take action on all sell signals that will generate on a pullback in the overall market. While we are indeed ready to increase our hedges, get short, and pair down our winners, we will wait for the market to tell us to do this. Right now, we want to be like water in a river. Smoothly flowing with the market in whatever direction it decides to go. Have a continued wonderful long weekend everyone. I wish you the best in the upcoming week. Aloha!

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.

Big Wave Trading Portfolio Update And Top Current Holdings

The Big Wave Trading Portfolios remain under a full BUY condition as we head into the upcoming week. There are currently zero items weighing on the model currently and it is not our job to try to guess when and if there will be any in the future. The trend continues to be higher highs and higher lows and until this changes there is no reason to try to top-call this market. What are our concerns? We are concerned about the non-stop uptrend off the November lows without a 5% pull back. We are concerned about the non-stop uptrend from the 2011 lows without a 20% pull back. We are concerned about the lack of volume in the overall major market indexes as we continue to hit new all-time highs. We are concerned that none of our new longs are exploding out of the gate immediately producing the past gains they used to produce under these exact same previous conditions. However, these are just concerns and are not actionable problems. When the index finally starts to change character, our new longs fail in succession repeatedly, we start to see churning and distribution in the overall market indexes, our current holdings start triggering profit taking signals across the board, we start to see leading stocks fail late-stage breakouts, and we start to see actionable short signals then we can start taking all of our concerns seriously. Until then, the trend is up, the market is hitting new highs, and our new long positions continue to make money immediately following a signal. As long as all of that is occurring there is nothing to do but ride the trend higher. I mean, the mere fact every intelligent market analyst and every intelligent macro trader in wall street thinks stocks should have topped by now or should top sooner, makes me believe the contrary approach is the right approach on the short-term. As long as we continue to see top callers, the uptrend has the sentiment it needs to continue to move higher. When these talking heads flip and finally capitulate to the long side then we can start to seriously consider the contrarian position of looking for a top when the smart folks are speaking of bullish matters. Great luck this upcoming week. We shall see if more highs or in store for us. Aloha from a very windy west side of Maui. TOP CURRENT HOLDINGS – PERCENT RETURN – DATE OF SIGNAL EAC long – 191% – 12/17/12 HIMX long – 164% – 12/19/12 POWR long – 118% – 12/11/12 CAMP long – 118% – 4/26/12 CSU long – 112% – 9/4/12 FLT long – 82% – 9/6/12 RVLT long – 82% – 3/26/13 HEES long – 79% – 9/4/12 GNMK long – 70% – 11/16/12 ASTM short – 69% – 7/17/12 WAGE long – 65% – 1/8/13 SBGI long – 55% – 3/22/13 BBSI long – 40% – 2/13/13 V long – 38% – 9/6/12 GMCR long – 37% – 4/23/13 WDC long – 33% – 1/9/12 PFBI long – 32% – 11/19/12 MNTX long – 30% – 1/17/13 HTA long – 29% – 1/2/13 AMWD long – 26% – 2/1/13

A Last Minute Kick Save lifts the Markets off their Lows as USDJPY Pushes above 100

A better than expected jobless claims figure failed to inspire buyers to hold stocks in positive territory at the start of the game. A weak wholesale inventory report sent sellers rushing into the market only to be saved once again by the Fed’s Permanent Open Market Operations (POMO). Big earnings moves by GMCR and TSLA shined as shorts got their clocked cleaned. Both stocks have been in uptrends and have moved quite nicely recently. Some fireworks went off in the late afternoon as the NASDAQ dropped from its high of the day right to its lows. Rumors of an article surfaced, but the move came at a time where the USDJPY surpassed 100. A late day buying surge lifted the market off their lows avoiding a potentially negative close. Volume ended the day mixed with NYSE lower and the NASDAQ higher. A day of distribution was avoided, but given the amount of distribution during April this market can endure quite a bit of distribution. One could call the action on the NASDAQ stalling, but this type of action really hasn’t mattered. Distribution is simply being ignored with the Fed’s POMO going on fresh new cash continues to flood the equity market. It was about time this market finished the day lower. We have seen this market go straight up without much consolidation and today we did get it. It would have been ideal for the market not to head into positive territory only to see the gains evaporate. Given the QE and ZIRP environment is difficult to think or even try to rationalize as “normal.” It is best to stick to a rules based, emotionless trading system. Get in with Big Wave Trading. Perhaps the fed will taper their QE program in the latter half of 2013, but no one really knows. Most are asking what to do when the Fed does end QE, but perhaps another question should be how to invest if QE doesn’t end. Our approach answers both these questions. Join and get educated in driving for gains. Have a great weekend.

Stocks Advance as Volume Swells

The lone economic piece of data for the US was Mortgage Applications showing a 7% gain. Economic data will be light for the rest of the week excluding tomorrow initial jobless claims figure. Commodities pushed higher as gold and crude led the way higher. The dollar index fell on the day and still trying to find a way to move above its 50 day moving average. Earnings season continues to stroll and we continue to see positive action. Volume rose on the session giving us an odd feeling as we normal see volume tail off when the market rises. This uptrend remains intact and unflappable. You know it is a bull market when you have a stock like DDD offer up a secondary share offering and have the stock rally and close higher. A 3D printing stock is certainly a hot sector with tremendous long-term potential. Usually a secondary will sink a stock, but not for DDD. It would be nice for the stock to put in a handle for 3 weeks breaking out from a cup with handle chart pattern. One can dream and we’ll just stick to our trading rules. Today’s action in DDD certainly shows the strength of this market and the stock itself. The II sentiment survey is out showing a jump in both bulls and bears. Bears remain below 20% of survey respondents. Bulls on the other hand jumped back above 50% with 52.1% of respondents indicating they are bullish. Both bulls and bears are near extreme levels. However, neither are at extremes. Tomorrow we’ll get a read on the individual crowd from the AAII survey and the “pros” at NAAIM. AAII has been quite bearish and it will be interesting given the move in the market if they have pushed the bulls back in control. Today’s after-hours session certainly had fireworks. GMCR and TSLA responded well after reporting earnings. Both stocks have had nice runs and will look to add to those gains tomorrow. On the downside RAX continues to struggle with their earnings report. FIO had its co-founder and CEO leave sending the stock lower. We want to get after stocks rising in a good market and GMCR as well as TSLA are a great example of stocks moving in the right direction. Cut those losses and ride your winners.

Stocks Advance Again Volume Jumps

Tuesday’s has been very profitable for the market accounting for 70% of gains and today wasn’t any different. Overnight the Nikkei 225 gained more than 3% as the Bank of Japan executes its QE program. If the Federal Reserve were to match the rate at which the BOJ is running the Fed would be printing more than $200 billion a month! This market would go nuts with that kind of liquidity not to mention what a headache it would create to unwind that kind of program. The market may be at lofty levels, but anyone shorting this market has been at their own demise. Today was just another example of why it has not paid and will never pay to find this trend. The Sell-in-May crowd is still waiting for the big decline in the market and if the bulls have anything to say it will be awhile before this market corrects. Since the lows in November the S&P 500 has risen 20% and we have not seen a 5% correction. You could say we are long in the tooth, but we have $85 billion a month to keep this market propped up. Zerohedge had an article laying out the months where there was POMO and when there wasn’t. It is pretty obvious non-POMO months didn’t end well. When this market will correct can be any day, week, or month from now. However, until we see the sell signals this market will likely move higher. It is absolutely futile to fight this tape. Earnings gaps continue to be fruitful. Using option straddles has been profitable strategy for stocks prior to reporting earnings. Earnings moves have been very powerful. Find a process and execute. Our Big Wave Trading chat room highlights possible straddle targets join as a Platinum member and see what we are targeting. It is very important to keep your head in the game and execute your game plan. Fighting this trend won’t get you anywhere. As new buy signals hit you must act. Ignore the talking heads on the television and make sure your game plan knows where you are going to exit. No one knows when this market will finally have a correction. It isn’t your job to guess when it will happen, but stick with this trend until we have a sell signal. Go get ‘em.

NASDAQ and S&P 500 Extend Friday’s Gains

There wasn’t much fanfare in today’s market without any US economic data. In fact, this week will be quite a bore for those who thrive on economic data. AAPL gained more than two percent as the stock has moved off multi-year lows. BAC vaulted 5% on very strong volume has the stock has moved higher from its most recent consolidation. Volume will be ignored until we see a parabolic run in this Federal Reserve highly accommodative environment. The trend is up and it is very difficult to fight this trend. It is nice to see gains were followed through on this time around. Perhaps we are seeing the beginning of a parabolic run or the top for the moment. In the end, we cannot predict the future nor can anyone else. At the moment we have a trend that simply will not quit and we aren’t going to fight this trend tooth and nail for a top. Opinions are often wrong and are very costly and it is best to focus in on price than another input. Stick with the trend. Another “nice” thing we saw today was individual leading stocks breaking out. A few names have potential ending up as new longs for tomorrow morning. Big Wave Trading members will be getting a treat for tomorrow. If you aren’t a member what are you waiting for? Go here to sign up http://bigwavetrading.com/register/. It is vital we have a breadth of stocks breaking out for this market to be able to sustain this uptrend. Get on this Big Wave! Last Friday’s job report was viewed a positive with upward revisions and the headline number not as bad as everyone had predicted it to be. The labor force held steady at 1979 levels while unemployment dropped to 7.5%. Average Hours worked may provide a glimpse into how Obamacare (aka the Affordable Care Act) has pushed many companies to hire more workers but cutting their staff’s hours. How this all works out is anyone’s guess, but having more workers working fewer hours doesn’t feel like a recipe for success. A good start for those who are long the market and tomorrow we’ll see if the Dow can close positive for the 18th straight Tuesday. Cut those losses and ride your winners.

Big Wave Trading Portfolio Update And Top Current Holdings

The Big Wave Trading Portfolio is back under a full BUY signal across the board as all major market indexes are hitting new 52-week highs with the SP-500 hitting new all-time highs. The model was in a NEUTRAL pattern coming into the week but on 4/29 the Nasdaq and SP500 switched to a BUY mode with new highs in their respective indexes hit. Following the switch in those two markets, the Russell 2000 and DJIA switched to BUY on 5/3. Overall, it is clear skies in the general market and the distribution day count has been dropped on our end with the market in new 52-week high ground. The good news is that volume was average to above average on the Nasdaq and Russell 2000 which gives us a decent confirmation on the price overall price action. While it would be lovely to see volume well above average on this rally to new highs, we are quite pleased to actually see average volume on the recent move higher. Unfortunately, this surge in volume would have been much preferred in November when the rally started but getting average to above average volume is quite nice considering all the previous low volume rallies we have had to be a part of the past four years. The lower volume rallies would not be a terrible problem if it was not being preceded by heavier volume selloffs. This makes for quite an odd Accumulation/Distribution ratio/rating in regards to the overall indexes. This is why we continue to stress paying attention to leading stocks and their volume only, ignoring the volume in the overall market, during this QE/ZIRP twilight zone market cycle. As long as stocks continue to breakout on volume out of sound consolidation patterns, we will continue to go long our signals as they are produced. Have a wonderful and profitable upcoming week. Aloha from an overcast yet still very warm and cozy Maui. Top Current Holdings – Percent Return – Date of Signal HIMX long – 173% – 12/19/12 EAC long – 141% – 12/17/12 RVLT long – 120% – 3/26/13 CAMP long – 111% – 4/26/12 POWR long – 110% – 12/11/12 CSU long – 108% – 9/4/12 FLT long – 80% – 9/6/12 GNMK long – 72% – 11/16/12 ASTM short – 71% – 7/17/12 HEES long – 69% – 9/4/12 SBGI long – 49% – 3/22/13 WAGE long – 46% – 1/8/13 V long – 40% – 8/31/12 PFBI long – 32% – 11/19/12 CHUY long – 31% – 1/10/13 WDC long – 31% – 1/9/13 BBSI long – 30% – 2/13/13 MNTX long – 29% – 1/17/13 HTA long – 27% – 1/2/13 AMWD long – 25% – 2/1/13 VIPS long – 25% – 3/14/13

Stocks Dive on FOMC Statement and Weak ADP report

Small cap stocks lead the entire market lower as the market didn’t respond well to the FOMC’s statement. At the beginning of the day the ADP employment report disappointed showing weak job growth for the month of April. ISM manufacturing did surprise to the upside, but contracted month over month. Economic data continues to be weak across the globe and we continue to see diminishing returns from QE. After the release of the FOMC statement the market found a bid. However, during the final hour sellers took over and pushed the market to the lows of the day. This market remains in no man’s land and on the verge of heading back to the lows of April. Dow Jones Transport index (TRAN) and the Russell 2000 (RUT) were beaten up badly. TRAN ended the day down 2.3% and closing below its 50 day moving average. The Russell 2000 dropped 2.5% and it too fell below its 50 day moving average. In April both indexes were able to find support despite closing below their respective 50 day average. Today’s move for both indexes certainly signals weakness and potential to head for April’s lows. Price action certainly is not telling a pretty story for both of these indexes. All eyes will point towards Friday’s job report after today’s FOMC announcement. An excellent point made by Bill Gross of PIMCO was not the amount of savings we should be worried about, but the cost of savings. ZIRP has completely eroded yield for savers and thus no incentive to spend. The incentives for investment are misplaced and until rates can rise and improve the cost of savings we’ll continue to see lackluster growth. Remember, the Federal Reserve a Central Planning body is trying to manage decentralized data. It is time to challenge ZIRP and QE. Given today’s move in TRAN and RUT certainly should give pause to bulls for the time being. Sell in May just might be turn out to be the thing to do? Stick with your rules and execute. Cut your losses and ride your winners