Big Wave Trading

Nasty Intraday Reversal Led by AAPL Sours Uptrend

2012-02-15T17:40:00.001-10:00

Positive economic data helped set the tone early for the market. Empire manufacturing and the Home Builders confidence survey both came in better than expected. By noon, the high of the day was set and AAPL’s roll over pushing stocks lower. Volume jumped on the day over on the NYSE giving the S&P 500 another day of distribution. The magnitude of the roll-over gives the NASDAQ a distribution day, but it is only the second day. AAPL was the big disappointment of the day with GIGANTIC volume the stock has run into major resistance and does spell a bit of trouble for the market overall. While one day doesn’t make a market we are certainly on watch with this uptrend, this type of action is not what you want to see.

There are many reasons to like AAPL as a company. The stock is much different than the company itself. Removing emotion and opinions the move in AAPL today does resemble a possible top. Let the hate comments begin! In all honesty, it is too difficult to say AAPL’s run is completely over, but for the time being it appears the upward momentum has come to a halt.

It will take more than one day to knock this market off its kilter. Cluster in a few more distribution days it would certainly mark the end of the rally. A more likely scenario is a 3-5% pull back to digest all the recent gains we have seen from the market since December. One quick look at the QQQs and this rally has been non-stop! A normal reaction to this move is certainly warranted. If you have an exit strategy in place you already know what you are going to do. If you do not, the big question is why you haven’t put one in place. Get one.

Stay the course and stick with the game plan. We have had a nice run and perhaps it is time we see a pullback. What happens is anyone’s guess, but with a plan we’ll profit from it.

Barron’s Declares Dow 15,000 and Stocks Respond Closing Higher

2012-02-13T16:19:00.001-10:00

Leading the way Small Cap stocks closed higher followed by the NASDAQ. Volume fell across the board, but coming off a weekend it isn’t entirely surprising volume was off. AAPL pushed through the $500 level for the first time. Another stock hitting $500 was ISRG; two big growth stocks hitting big milestones is a positive sign for the market. While volume wasn’t impressive across the board select stocks saw plenty of volume. Institutions certainly targeted a select few today and despite the overbought conditions this market continues to motor higher.

Besides AAPL and ISRG another stock making a splash was PCLN. The stock has been stagnant for quite some time. For almost a year the stock has been unable to gain much traction, but the move today is certainly a good one with volume up more than 75%. The stock is set to release earnings on 2/27. 2012 estimates have been coming down, but given the move today it appears there is a bit of excitement prior to earnings.

Riots in Athens were broadcasted throughout the world. The markets certainly cheered the passage of the new, new, new austerity bill, but a few folks in Athens weren’t in agreement. I just wonder if Greece will uphold to the agreements they have put in place. My money is they will not meet the austerity guidelines. We’ll be back again where we’ll be hearing another round of haircuts until 99.99% of Greece’s debt is liquidated. If other countries haven’t taken notice they should. Take the initial pain of the budget cuts to be better off later. We are going on year two of the crisis; it shouldn’t have taken this long.

After-hours Moody’s put a few Eurozone nations on negative watch. France was one of the countries and is a big deal. France and Germany have been the two countries financing bailouts. If France’s borrowing costs it will be increasingly difficult for France to support bailouts of the rest of the Eurozone nations.

Despite the Eurozone woes our uptrend continues higher. All the shenanigans going on across the globe really are just a discussion point. Even the cover to Barron’s is a discussion point. Perhaps we’ll look back and say today was the top or we won’t. While it would be fun to call the top, we’ll let price and volume dictate our actions.

The trend is our friend and until it breaks we’ll ride it. Cut those losses short.

Big Wave Trading Portfolio Update And Top Current Holdings

2012-02-11T16:57:00.003-10:00

Big Wave Trading Margin and IRA accounts remain nearly fully invested (85%-95%) as our Market Model remains under a full BUY signal. That signal was triggered on 1/5/12. Big Wave Trading is currently watching the current pullback to see if it will result in a short-term top or a normal pullback that will lead to a resumption of the current uptrend. As of Friday, there are no distribution days to signal that anything more than a pullback is occurring. Big Wave Trading will use this pullback to sell off any stock showing a loss or any stock lagging the overall market by a significant degree. The money raised from selling our laggards will be deployed in new long positions or current long positions accordingly as they arise. If the pullback gains steam and distribution days mount, measures will be made to raise cash as indicated via our Market Model as it switches to NEUTRAL or SELL.

Top Current Holdings – Percent Gain (non-margin) – Date of Signal

FFN – 51% – 2/7/12
IRE – 51% – 1/12/12
JKS – 37% – 1/27/12
MOTR – 49% – 2/2/12
RENN – 34% – 1/11/12
YINN – 30% – 1/5/12
UMDD – 26% – 1/5/12
RF – 25% – 1/5/12
FAS – 24% – 1/5/12
HK – 22% – 1/9/12
LNKD – 21% – 1/19/12

Greeks Agree to Austerity; NASDAQ Leads, but Small Caps Lag

2012-02-09T18:42:00.000-10:00

The big news of the day was the Greek’s finally were able to come to terms on a new, new, new austerity agreement. Yes, another plan they will fail to deliver on. Volume ended the day mixed as NYSE volume slid underneath yesterday’s levels as NASDAQ volume jumped nearly 10%. AAPL was a clear winner today with their announcement of the iPad3 set to hit store shelves during the first week in March. Small cap stocks did not fare as well today closing in the red; one small blemish on the day. We continue to power higher in the market and the NASDAQ continues to see signs of accumulation. Today was another reminder to avoid fighting the trend.

Sentiment is getting a bit frothy according to the most recent AAII sentiment survey. The Bulls stampeded to above 51%. A level that is quite extreme while the bears finished above 20. Bears didn’t set a new low for this uptrend, but certainly the number of bulls set a new high. Is this “the” top in the rally? It is anyone’s guess given the amount we have run and not to mention the number of bulls. With that said, we still have plenty of stocks looking good and solid accumulation to make us believe we can continue higher.

This uptrend now has a few blemishes that could stall this rally. This does not mean it ends the uptrend completely, but it does signal we could see a quick shake out. So far, we see 1-2 hour shake outs only to power higher. Small caps were certainly a blemish, but today’s breadth was weak considering the market move. NASDAQ breadth favored decliners rather than the advancers today. Normally, an update will sport many more advancers than decliners. New highs continue to be healthy and be a positive force for the market. Given the number of stocks over respected moving averages and breadth weakening it would appear something amounting to a shakeout will occur shortly.

I could be wrong and we never see a shakeout, it is precisely why we react to price moves rather than anticipate them. Our success depends on our ability to react to price changes rather than guessing or anticipate a move. No one individual is that smart and can hit turns in the market often. Don’t anticipate the move, go with it and react as it happens.

Have a great weekend.

Stocks Close in the Green Again; Uptrend continues

2012-02-07T18:08:00.000-10:00

Just another day in this uptrend as stocks close higher on the day recovering from early morning lows. Volume rose on the day showing institutions had an appetite supporting the market on the morning dip. It is truly amazing this market is on, a straight line to multi-year highs from what appeared to a market heading for fresh bear market lows. For now, it appears the market is more focused on the Fed’s printing presses than any country from the European Union defaulting. Stop fighting the trend as it has been very painful for those who have been.

Yes, the market is “overbought,” but it has been for quite some time. Sentiment has come down off its highs as of late, so the crowd is anticipating some sort of pullback. Anticipation is a problem if you act upon a hunch. It will lose you money either by missing out on a move or compounding your losses. While it is true we are overbought, the market can continue higher. We have defined rules for exits and until those are met, we’ll stay long.

It will be nice when Greece finally defaults. The past few weeks every morning and night headline has Greece “close” to a deal with its creditors. Just get it over and done with, they are going to default one way or another. Greece has not shown it can stick to any terms it has promised, why even bother with a new set of terms? In the end, Greece cannot pay for its obligations and liquidation needs to occur. This is a painful process for those who are dependent on the government and it will take time for it to resolve itself. Trading off this situation is too difficult; we’ll stick with the trend.

A dangerous tactic here is chasing. It is never wise paying up more than 5% beyond a proper buy point. Often time stocks will reverse shaking out weak holders and late buyers. At this juncture and with the amount of stocks extended it would not surprise me a few of them shakeout weak hands here. If you do chase, make sure you are lightning fast cutting the position if it turns against you.

Stay disciplined and cut those losses.

Stocks Finish off the Lows as Volume Drops

2012-02-06T16:42:00.001-10:00

Settling near the highs of the session stocks put in a solid day of consolidation. Volume fell more than 20% across the board, a very good sign institutions weren’t selling. After such a big run up, a day or two of consolidation is a very healthy signal. Crude oil settled lower, but natural gas is in the midst of forming what it appears to be a bottom. While a positive sign for those drilling for the natural resource, but not a particularly good sign for consumers. At the end of the day, we saw a very positive signal out of the market and we continue to ride this uptrend starting at the beginning of this year.

Another few days of the market pulling back would do us some good. 88% of stocks are above their 50 day moving average. Normally, at these extreme levels we do get consolidation. Does this mean you act upon thinking a pull back is about to happen? No, pullbacks are apart of the market and we welcome them as we live within this uptrend. If big volume selling takes place we’ll start taking a different tone, but for now, we stay the course and execute our game plan.

BAC continued its tear leading the Dow Jones Industrial average higher. Financials continue to perform well despite the negative press. It is nice to see banks perform well; they tend to lead the market higher in new uptrends. WFC and PNC are two other stronger BIG banks doing well. A bit of consolidation for the bank stocks around their respective 200 day moving averages would do them a bit of good.

NFLX and GMCR two former top quality stock All-Stars continue to mount comebacks. We are seeing quite a few of these old names like AKAM and CSTR come back to life. DNDN is another former high flyer coming back to life. As always, sound money management is a must and cutting losses should not be avoided at any time. Even these former high flyers coming off their lows are not exempt from the plan.

Solid start to the week and would not be surprised if the market continued pulling back. The uptrend remains strong and there is no reason to think otherwise.

Big Wave Trading Portfolio Update

2012-02-04T14:34:00.001-10:00

Big Wave Trading remains fully invested in all margin and IRA accounts. Big Wave Trading has been fully invested since the full BUY signal was generated on 1/5/2012. While many traders/investors tried to deny the uptrend as just another suck out our model told us to expect more via the price and volume action across a myriad of stocks across multiple sectors. The past week the market finally took off and our long positions were rewarded greatly. We at Big Wave Trading could care less how much the market moves up from here. We know that we can not control the gains. We can only control how much we lose in the stock market. Therefore, if the trend persist, we will continue to sell stocks underperforming and move the bad cash to good stocks outperforming the market on a Relative Strength basis. We do not get emotionally involved with gains at Big Wave Trading. We could care less. It is simply doing the process right that gives us the pleasure. Being right is meaningless. Getting rich is meaningless. It is the process that allows us to be right and get rich that matters. The most important ingredient in this process is cutting losses fast. Big Wave Trading never holds losers. If the stock is losing money, we sell it and move on. No questions asked. Big Wave Trading’s win/loss ratio is at a point that we could be right 10% of the time and still not lose money as we refuse to lose 1% of our total account value in any one trade. Losing is not an option. Winning is the only goal. We will continue to stay fully invested until poor action among leading stocks (Relative Strength basis) and distribution days start to litter this market. If many distribution days occur, the Market Direction Model will switch back to NEUTRAL and possibly switch to SELL. Switching to a sell signal depends on the amount of distribution days and time frame in which they occur. We do not expect that to happen any time soon but expectations are resentments waiting to happen. Therefore, we remain completely agnostic towards the future. We are prepared for a continuation of this uptrend, a top, or possible consolidation. All game plans for each outcome have been analyzed and our ready to be used accordingly.

Top Current Holdings – Percent Gain (non-margin) – Date of Signal

IRE – 64% – 1/12/12
YINN – 37% – 1/5/12
RENN – 35% – 1/11/12
FAS – 28% – 1/5/12
UMDD – 28% – 1/5/12
RF – 24% – 1/5/12
DVR – 23% – 1/13/12
MOTR – 23% – 2/2/12
RAM – 21% – 1/9/12
RGR – 20% – 1/5/12
VNET – 20% – 1/10/12
RATE – 20% – 12/28/11

NASDAQ Closes off its Highs as Volume Slides, but Above Average

2012-02-02T17:17:00.001-10:00

The market ended off the highs of the session, but with volume coming in lower we avoid a day of stalling. Russell 2000 small cap index raced higher tying the NASDAQ composite for the top index of the day. Interestingly, enough both indexes have yet to have the golden cross yet continue to lead the entire market higher. Bernanke’s testimony on the hill helped spark some buying, but as the testimony wore on sellers began to take over. We continue to play in overbought conditions, but this rally is healthy and remains that way. Tomorrow’s job report will certainly set off fireworks. At this very moment, we have a healthy rally that is a bit over-extended.

The unemployment rate will be the key statistic the market pundits will be paying attention to. Last month’s surprise move to the downside for the rate helped spark some confidence for the market in general. However, the denominator, the total employment pool continues to shrink driving down the percentage of people out of work. It is very difficult to measure unemployment, but judging by the U-6 figures as well as the number of people on food stamps our situation remains weak. Why else would the Federal Reserve hold rates steady near zero percent all the way out to 2015? If employment was actually improving there would be no need to continue to hold rates down. Enough of the economic talk, it’s about the trend.

Trend following is not an art form and trading based upon gut feel is not our style. Disciplined trading, rule –based trading is our game; it’s our edge to outperform the market. I know we harp this one lesson: CUTTING YOUR LOSS SHORT. It is vital, letting losses run ruins capital and ruins traders. Breaking your rules is another major flaw. Jesse Livermore would often break his rules only to see his net worth crumble. If you find yourself in this situation, what separates the best from the rest, the best rise again!

Have a great weekend!

Facebook $FB Files for an IPO as a late day sell-off takes down the S&P 500

2012-02-01T17:48:00.000-10:00

The big talk of the town was FB filing for its IPO. Despite the news of the IPO sellers hit the market late day pushing stocks from its highs. Over at the NASDAQ despite sellers on the NYSE the NASDAQ appeared to be somewhat immune. Volume soared on the NASDAQ as institutions pile back into technology stocks. It is clear the leading index of this rally is the NASDAQ and we view this as a positive sign. A solid day for the NASDAQ while it appears the NYSE related indexes continue to lag.

We have a good start to the month of February as we get ready for Friday’s job report. As usual the talking heads will be looking to find clues of an improving economy. More people are fleeing the job market helping out the unemployment rate. As usual we will not try to predict what the number may or may not be and gauge a plan of attack based upon a guess. Discipline is paramount, we’ll stick to our proper buy and sell rules and let the guessing be handled by others.

What to do about FB? We are going to wait and see how it trades. We’d love to see the stock consolidate and form an IPO base. It’s anyone’s guess where the stock will go. Perhaps it will pull a LNKD and catapult on day one. Truly, it’s anyone’s guess and we’ll wait to attack the stock if it meets our buying criteria.

Our uptrend continues and without any major distribution it is hard to be calling for a top here. Perhaps a major reversal day on mega volume would do it, but we don’t have that situation. Anticipating moves will only leave you on the sidelines. Stay disciplined!

January Closes with a Whimper; AMZN Disappoints After Releasing Earnings

2012-01-31T17:20:00.000-10:00

The early morning jolt higher the market was hit with unexpected disappointing economic news from the Chicago PMI and Consumer Confidence. While it did appear the market was heading for a day of distribution buyers stepped up just after the lunch hour. Financials reversed course pushing higher a positive sign for the market. The downside was the stalling action as the NASDAQ was unable to hold its gains from the morning. While we did see support, there weren’t enough buyers to erase the stalling action. Volume spiked at the end of the session as monthly rebalancing always ushers in a big volume spike. All in all, today wasn’t too bad of a day for now.

Historically speaking February isn’t typically a month where you would expect a big rally to kick off, but we did see in 2010 where February kicked off a sizeable rally. It is anyone’s guess whether or not we take off from here or reverse course and head lower. A sound plan to attack the market is paramount; if this market is to go higher we want to take advantage. On the flip side, we don’t want to be exposed if this market is to turn lower. Cutting losses and your laggards is a prudent course of action.

The Golden Cross occurred on the S&P 500 a bullish “technical” indicator. We pulled data from Yahoo for the S&P 500 and found 80% of the time this is a bullish indication for the market. What you learn by crunching the numbers is cutting your losses improves your performance. Precisely why we stress the need to cut your losses quickly, it is your insurance policy. We now await the NASDAQ to join the Dow Jones Industrial Average and the S&P 500 to experience the golden cross!

Cut your losses short.

Closing off the Lows, Stocks Show Resilience

2012-01-30T17:11:00.001-10:00

While market pundits wait for a Greece and its creditors to come to an agreement, stocks quietly put in a solid day. At the open it did not appear stocks would have a good day as the market pulled back nearly one percent. Small cap stocks were having a difficult time, but a solid reading from the Dallas Fed helped spur buyers step up to the plate. Volume ran lower for much of the day and helped the market avoid a day of distribution. This is the type of action you want to see as the stock market consolidates its gains and if the market continues to act like this it will bode well for the future.

Yes, the market may be a bit overbought still, but the recent action is quite encouraging. Recent price action in AAPL, INTC, and MSFT (the big dogs) is also very encouraging. A sore spot in this rally is the inability for the IBD 85/85 to show any relative strength. This index has been stuck in neutral for quite some time, but pay attention any pick up in strength would be a very positive signal. As we head into February I would expect a choppy month as February tends to be a tough month for the market. If this type of action continues it will only set us up nicely for a big rally.

The backdoor QE 3, the Federal Reserve dollar swap program is a precursor to what will likely be another round of quantitative easing. It is no secret during election years the government will do its best to prop up the market. You can bet your bottom dollar Obama and his administration will pull out all the stops! The problem isn’t just related to democrats as both sides are guilty. This does mean we’ll likely get a rally from another liquidity injection. QE 2 did produce some big winners including NFLX so it would be a prudent move to stay on top of this market. You do not want to miss out on gains!

Always cut your losses short.

Big Wave Trading Portfolio Update

2012-01-28T16:45:00.000-10:00

The Big Wave Trading portfolios continue to be fully invested following our full BUY signal on 1/5/2012. Both margin and IRA accounts are fully invested. As we continue to find new longs all that can be done is to sell the losers and place whatever funds remain in new positions as they generate BUY or SELL signals. A quick reminder: Big Wave Trading never carries losses. Every buy signal has a set cut loss level and it is always obeyed. The loss target on any one trade is to never be more than 0.5% of total account value. Once a stock loses 0.5% of the total account value, even if it has not hit its final cut loss target, it will be completely sold.

Big Wave Trading believes that the market may be in tune for a pullback. However, we also recognize that it is impossible to predict what the stock market will do. Therefore, if we continue to grind higher, this would not surprise us. If we do get a pullback, it appears, based on the very strong accumulation in multiple stocks across multiple sectors of the market, that it would simply end up separating the best stocks from the laggards. This would allow us to move the cash raised from the small losses or profit taking to these true leaders. If we pullback on very heavy distribution, obviously, the pullback will not be a buying opportunity. Like we always say, it is impossible to predict the stock market. Those that do are plain fools and usually their results show it in their brokerage statements.

Top Current Holdings – Percent Gain (Non-Margin) – Date of Signal

RENN – 36% – 1/11/12
IRE – 29% – 1/17/12
YINN – 28% – 1/5/12
WPRT – 24% – 12/20/11
FARO – 22% – 1/6/12

Leaders Turn Lower as Stocks Reverse Hard

2012-01-26T19:02:00.001-10:00

The NASDAQ notched its first day of distribution after putting in a new high in the most recent rally. A solid durable goods order number helped push the market higher. However, a bigger expected drop in New Home sales didn’t help and put pressure on stocks. It wasn’t until the late afternoon did we see the selling pressure kick up a notch. A little late day surge helped the NASDAQ close off its lows, but failed to protect it from a day of distribution. Distribution happens and it boils down to whether or not you prepared for what you do next.

Once again the number of Bulls in the AAII survey was near 50%. Bears dropped below the 20% mark once again this month. Remember, yesterday the percentage stocks above their 20 and 50 day moving averages was above 80%. A pull back here is NOT surprising and is to be expected. What we need to watch for is how we pull back. Can we avoid heavy distribution? Are leaders going to hold up? Sound money management principles are paramount in this market.

Tomorrow we get a look at fourth quarter GDP and it is expected to come in at 3%. It’ll be interesting to hear the debate about the number and how you should respond with your portfolio. Unfortunately, making a “play” will end up costing you dearly. Price and volume are keys to this market and guide us to making proper decisions.

Have a great weekend and stay safe (and that means cutting losses)

Fighting the Fed is Futile; AAPL and Bernanke Send Stocks Higher

2012-01-25T19:10:00.000-10:00

Stocks were weak to begin the day as pending home sales were weaker than expected. The weakness didn’t last very long as traders and investors were positioning themselves ahead of the Federal Reserve policy statement. By noon, stocks were at session highs, but it wasn’t until the market heard the news rates would be held down until the end of 2014. Regardless of what you think of the statement the market went higher and with volume to boot. While the market closed off the highs of the session the day overall was very bullish.

During the after-hours session NFLX reported better-than-expected earnings as the stock jumped more than 15%. NFLX had a terrible time at the end of 2011, but the stock has been able to rebound from its heavy selling. The mishap over splitting the DVD business from the streaming business may be behind the company as the stock has had one heck of a ride off the lows.

The biggest concern here is how to handle a potential pull back. I wouldn’t expect today to be the “top” of this market rally, but a potential pull back of 3-5% is always in the deck. How you handle it is the most important. Have a game plan on where you’ll exit your stocks, cutting losses and taking profits should be in your plan. If not, get it in there! We are at frothy levels with 85% of stocks are above their 50 day average and 82% of them are above their 20 day average. These levels are usually met with some sort of selling, but we aren’t going to try and “guess” when we’ll turn. This uptrend is for real and even a small pull back won’t keep it down for very long.

Stay disciplined!

AAPL Blows Away Earnings in After-Hour Session

2012-01-24T18:13:00.000-10:00

Another great day for the stock market as again buyers step up and support the market. The market did get help from the Richmond Federal Reserve Manufacturing index as it came in better than expected. However, the market turned its attention to AAPL’s quarterly earnings report. Volume came in lower perhaps due to the Federal Reserve meeting concluding on Wednesday, but it’s anyone’s guess. More importantly, it was AAPL’s blow out quarter taking center stage. This uptrend will continue tomorrow and for the moment it continues to be strong.

There are a lot of people who are fighting this current trend and it is easily understood. Sure, we can have pullbacks, but to be calling for all out Armageddon is quite funny at this stage. It is anyone’s guess where the market will go from here despite what may appear to be “smart” analysis. We only know what is directly in front of us and we have been in an uptrend. A disciplined, ruled based approach where position sizing, cutting losses, and exiting positions is the best way to attack this market.

Tomorrow we’ll get Ben Bernanke’s take on the economy and its rate decision. Expectations are for the Federal Reserve to really keep their stance on monetary policy. Basically, they are going to decide whether or not they need to print more money. The conundrum they are in at the moment is they justified QE2 with a sluggish jobs market and with the jobs market improving they have little justification for another round. At the rate Washington, DC spends money and its inability to balance the budget the Fed will have to at some point soak up excess supply. Of course, do I know the future; no, but given with how we know DC operates not sure how we don’t go down this path.

Remained disciplined in your trading and do not deviate from the plan. Of course, cut your damn losses.

Volume falls ahead of the Federal Reserve’s two day meeting

2012-01-23T17:04:00.001-10:00

The day began with a solid move off the lows and it was looking like the market was going to surrender to the bulls. After the 10 o’clock hour sellers hit the market sending stocks lower, but in a bullish fashion stocks were able to find support. Today’s move would have been better if the morning move did not occur. Perhaps it is a small blemish; we’ll take the pull back as the market consolidates its most recent run up. Our uptrend remains intact and it is without any major distribution or stalling a big positive for this uptrend to continue.

There is some talk about the market being overbought and sure, it is. Given the move since the New Year began it is quite obvious we have a market a bit ahead of itself. The number of stocks above their 50 day moving average is above 81%. 77% of stocks are above their respective 20 day moving average. These figures aren’t at all-time highs, but they are at levels where pullbacks do and can happen. So far, this two day pull back in the overall market is quite normal and is looking very healthy.

Tomorrow kick starts the Federal Reserve’s two day meeting. Many are asking if QE3 is coming and it is a guessing game at this point. The stock market is higher and the jobs market appears to be firming up with the unemployment (as reported by the government) coming down. To make a case for another round of quantitative easing would be a hard sell. I would imagine the Fed needing to step in when demand for US Treasuries dries up. I could only imagine what would happen if there isn’t enough demand to soak up the issuance of debt. It is fun to debate what may or may not happen, but a terrible way to trade and invest.

Stay discipline here and DO NOT chase stocks at all. Cut your losses!

Big Wave Trading Portfolio Update

2012-01-22T18:21:00.000-10:00

Big Wave Trading is currently 100% long in our margin and IRA accounts. The Big Wave Trading market model went into a full buy signal on 1/5/2012 following a partial buy signal on 1/3/2012. Since the full buy signal, multiple stocks have set up and broken out of sound consolidation patterns. The one problem with this rally, however, is that we are not seeing any explosive gains right off the bat. Normally at the start of new uptrends, Big Wave Trading will have a handful of stocks up 20% in just a few days to a couple of weeks. This is not happening this time. This is in part due to the slow speed of this rally as we are only moving slightly higher each day, outside of 1/18/2012. Nobody knows if this rally will continue or will end with a reversal. The only right play is to be completely prepared for both outcomes. If this rally comes under distribution, Big Wave Trading will begin cutting losses and pairing back long positions very fast. As of now, we continue to focus on the long side cutting losers quickly and quickly moving that money into new stocks giving new buy signals or current long positions offering up additional buy points. If the market comes under a few days of distribution in a short time frame the model will switch from BUY to NEUTRAL to a possible SELL depending on how much selling pressure shows up in the market and leading stocks. We will see how this new week shapes up. I expect a pullback. However, what I expect does not matter. It is what the market actually does that matters.

current top holdings – % return non-margin – date of signal

RAM – 20% – 1/9/2012

Performance of Big Wave Trading

2012-01-22T17:47:00.000-10:00

A big thank you to bjesse a member of BWT for putting this together! It goes to show you the value BWT brings to the table! Take advantage of the value by signing up here.

Performance Analysis 1-21-12

NASDAQ 100 closes at an 11 year high; GOOG closes down big in after-hours trading

2012-01-19T19:13:00.000-10:00

Positive news for the job market as jobless claims fell hard, but it was the NASDAQ 100 closing at an 11 year high that stole the show. Yes, it is positive claims almost broke through the -300,000 level and the market certainly liked the figure. Even a slightly negative Philly Fed survey couldn’t hold back buyers from scooping up shares throughout much of the day. Volume on the NASDAQ rose again, but once again over on the S&P 500 volume fell. The S&P 500 continued its “wedge” higher as the NASDAQ remains the leading index.

The number of bulls pulled back from last week’s high, but bulls registered at 47%. Bears were able to climb back above 20%, but they didn’t make a big stand. The II survey continues to be bullish, but well off the extremes we witnessed early this year. I wouldn’t consider this market at an extreme level as far as sentiment is concerned. And with the amount of stocks we continue to find popping up this rally should have legs to run for quite some time. Again, we may see a shakeout here and there it won’t derail the rally currently underway.

Every rally will trick traders/investors to chase stocks at highs only to see the stock reverse and shaking them out. It is best to have a sound approach to buying and chasing stocks SHOULD NOT be a part of the approach. Just as important is money management, knowing how much to buy, cut losses, and exit a position is paramount. Without these tools you will be left behind.

It is clear the NASDAQ is the leading index with S&P 500 and Dow Jones Industrial lagging behind. This is precisely what we like to see. If it were the other way around, we’d have issues. Enjoy the weekend!

Stocks Close Higher Again above October Highs

2012-01-18T22:40:00.000-10:00

Another stellar day for the bulls as stocks rose across the board. The S&P 500 closed higher for the 10th time in 13 sessions but volume fell on the index. For the NASDAQ composite the index closed higher with higher volume and it was above average. Clearly the NASDAQ is the leading index of this current rally a sign we’d like to see. Given the run up as of late, it is hard to continue to knock the ball out of the park each and every day. Use the opportunity to cut laggards and stay on your winners. Today was just another solid day in this uptrend.

The market really got going with a big jump in home builder confidence. Finally, after so long we are beginning to see an uptick in confidence from homebuilders. It remains to be seen whether or not this translates into success, but the way homebuilders are acting higher prices are ahead. Banks were helped out as well, with an improving real estate market the situation should translate well for the “toxic” assets banks continue to hold. Let’s not forget the Federal Reserve holds quite a bit of mortgage paper and continued improvement in the real estate market will surely help the quality of paper held on the Fed’s balance sheet. It all boils down to price and volume and it is positive.

I am still looking forward to seeing Sentiment indicators tomorrow. Most notably the AAII survey as it has been quite bullish for the past two weeks. Bears have been decimated below 20% and you have to wonder if this market will have a quick washout to get the weak bulls out of their positions. This would be an ideal situation for us as it will show who the true leaders are in this rally. It would then allow us to focus in on the very best and take advantage of a new rally. Sentiment is an imperfect indicator and usually works best at REAL extremes. I highly doubt we are at one now, but we are at a point where it’d be nice to shake out some weak bulls then proceed with this nice rally. Remember October of 2010 and November of 2010? Quick shakeouts only to have us lead higher. Don’t be easily shaken out, follow the game plan.

Rally Fizzles as Volume ends Mixed; NASDAQ gains but well off the highs of the Session

2012-01-17T16:52:00.000-10:00

The morning started off great for stocks, but the day’s gains were unable to grow. Fresh off a long weekend it appeared overseas markets were brushing off S&P’s downgrade of 9 Euro nations. Little ground was covered for much of the session as the market traded within a relatively small range. A few stocks broke out including MSFT and PNRA. PNRA held onto most of its gains MSFT could not. The days action really boiled down to stalling action on the NASDAQ. In of itself, today isn’t that bad, but over the next few days looking out for distribution will be a key indication if this market can power forward over the next few weeks.

Today’s market action isn’t a glaring sell indication, but it does just raise a simple flag that the market may be acting a bit tired. We have plenty of stocks underneath setting up and looking solid. This doesn’t mean we automatically blast higher, but it does help our chances over the next few weeks/months for this market to set up for gains. For now, it appears the general market has been able to shrug off the negative news pouring out of Europe as of late. I should mention at the end of February Greece is set to default again. Don’t fret, have a game plan and execute it with precision. Big Wave Trading has a plan and we’ll continue to execute.

CNBC continues to harp on the “golden cross.” They did a piece when the Dow Jones Industrial average experienced the cross. Now it is the NASDAQ’s turn and there is a bit of history to back it up. I posted the numbers awhile back and confirmed with 80% of the time you will see gains 180 days from the actual cross. It is quite bullish and I wouldn’t be against the golden cross as history has shown it is a profitable indicator. Given the stocks we are seeing, coupling the golden cross buy signal can set up for a very bullish spring. Stay tuned.

It would not come as a surprise to use for the market to shake out weak bulls. Last week the number of AAII bulls nearly topped out at 50% for the second straight week. Normally, we tend to see shakeouts happen when the retail investor gets a bit too bullish. We are going to follow our rules as usual, will you be able to handle a market shakeout?

Market closes mixed with declining volume

2012-01-11T17:54:00.002-10:00

The NASDAQ closed higher for the 6th time out of 7 days as volume continues to remain above average. Today appeared on the onset it would be a day of consolidation, but the NASDAQ would have none of that. While volume remains above average for the NASDAQ the S&P 500 continues to remain below the key volume moving average. A sign Institutions are more interested in NASDAQ composite stocks than the S&P 500. A pull back is certainly in the cards and would be a welcome sign to consolidate the recent gains. However, our trend remains up and until this situation changes we are positioned accordingly.

Tomorrow we get a bit of economic data in the morning and it will be all about retail sales figures. Forecasts are for sales to jump .20% and I wonder to myself: “do economists ever get anything right?” They don’t, it is meaningless to position yourself based upon a hunch or opinion. NO ONE knows the future we only know what we know up to a point. Sure, fiat money has an average shelf life of 35 years, but it doesn’t mean the US Dollar has to end (in one form or another) 35 years to the date Nixon took us off the gold standard. The moral of the story: price and volume tell the story you want to be listening to; follow it!

January always tends to be a tricky month for stocks. Sure, optimism runs high for the new year and as humans we tend to have emotional roller coasters and makes sense for stocks to run at the beginning of the year. However, January tends to be more of a messy month for stocks and it is quite dangerous to think live on hope of a good year. Have a game plan of how you plan to attack the market and execute the plan. There is buying going on underneath, we are finding them and you need to have a game plan to attack those names.

The key to success is using a cut loss strategy to protect your downside. It is always important to cut your losses and move on.

Big Wave Trading Portfolio Update

2011-11-26T18:27:00.001-10:00

It continues to be a rough 2011, minus the July to August downtrend, but it is possible another trend is in the process of developing. Following the rally off the October lows, it started to look possible that a new uptrend might take shape as some new CANSLIM quality stocks started to build right side of bases with some breaking out. On top of that, some very pretty green chart patterns began setting up in more speculative quality names (SIMO PKT) with the stocks coming off the lows producing some solid gains fast (PEIX BIOF). During this uptrend from the October lows two partial buy signals were produced with both failing immediately due to the signals coming very late in the uptrend during overbought conditions. While this was occurring, ex-generals of the previous uptrend from the 2008/2009 lows were not participating in the rally. These two major red flags prevented a full buy signal from being produced the whole rally saving Big Wave Trading investors money by keeping new long positions very small in relation to total account capital.

Since November 17th, things have changed. Bank stocks that looked to have been trying to hammer out a bottom have completely rolled over with stocks like BAC and GS hitting new lows, the new CANSLIM quality long setups (VMW TIBX SPRD RHT) have failed immediately, the speculative longs have reversed hard/crashed (LGND OPNT GMCR), the inverse ETFs have come under heavy accumulation, the 3x bull ETFs have come under heavy distribution, the ex-generals (AMZN AAPL PCLN CRM) have all created very bearish chart patterns (most have H&S tops), and the SP500 and Nasdaq have resolved themselves below the triangle pattern they were creating in November. All of this threw our market model into a 66%-75% sell signal on November 17th.

This signal has proven quite profitable in the very short term but it remains under a 66-75% signal and not a 100% sell signal due to the fact that volume on the NYSE on the distribution days continues to be below the average daily volume of the past 50 market sessions and we still have some current long positions that are holding above key support. If the market can rally on the short term and fail at recent resistance levels on higher volume, a full 100% sell signal will be triggered (despite above average volume or not on the NYSE). The nine long positions that remain in the margin account (4 in the IRA) are all on the cusp of triggering their final cut losses. If this happens, along with the NYSE failing at resistance (even if volume is lower than the day before), then the model will go 100% sell.

Currently, the Big Wave Trading margin account is 55%-60% short 10 stocks, 10-15% long 9 stocks, and 25-35% cash. The Big Wave Trading IRA account is 70% long 4 inverse ETFs, 6% long 4 stocks, and 24% cash.

Top Current Holdings – % Return – Date Of Purchase:

EDZ – 23% gain – 11/18/2011

My Interview With The Rouge Investor Website

2011-02-14T15:48:00.001-10:00

I had the chance to re-interview Josh Hayes from Big Wave Trading in an effort to learn about his methods to consistently profit from trading stocks. Let me stress that Josh does what I consider to be an art and he is one of the highest performers around. I’d argue he is mainly a momentum investor, mixing technical and fundamental analysis to achieve superior returns.

There are two options for getting more information about Josh and his analysis. First, he has a premium subscription service at BigWaveTrading.com with different membership levels for different needs. Second, he has BigWaveTrading.net which is a site dedicated to free commentary. Check them out!

We started off getting revised answers to the questions I asked in my previous interview and then moved on to a new set of questions.
Interview 1.0 Revisited

How would you describe your trading system?

Simple without noise. I simply pay attention to my charts. I don’t watch CNBC or read other financial publications. I do not even subscribe to IBD anymore. I just use Daily Graphs, Telechart, Scottrade, and IB. I keep it very simple and the most important thing is I never “try (it’s impossible to do)” to let my stupid opinions influence me.

How has your trading system changed, if any, ever since the economic downturn?

No, It hasn’t. I started looking at charts in 1996 and in 1999 I had learned-in-my-head the CANSLIM methodology and have kept to that simple (yet very hard to initially learn) methodology since 1999. I know and knew, thanks to my laborious reading of about 100 stock market books, that nothing ever changes in the stock market but the players. The patterns always remain the same thanks to basic insecure human emotions like greed, fear, and hope. They are completely useless in this game.

I noticed that on your telechart, you keep your price very small compared to most charts. What is you reasoning for such a setup?

It allows me to, very, clearly see the basing patterns such as a cup w/ handle, cup, ascending, double bottom, or HTF pattern. By “squishing” the price the chart goes from big and what appears to be loose to tight. If a stock is not completely tight on my price settings I know I want to avoid it. Visually, it is just what I prefer. To someone else, it might not be their cup of tea. To each their own.

Is it an advantage or disadvantage to be located in Maui?

If we are talking about surfing, YES! If we are talking about life, YES! If we are talking about the stock market, YES! Maui no ka oi. Being so far away from NYC and CNBC has to have nothing but 100% advantage towards my investing. Getting rid of all that mainland noise is the reason I can completely be objective towards the stock market. I never know what is happening in the macro environment anymore. I could care less. It’s all about sun and fun for me and that equals profits thankfully. Once again, I say, for me.

About how long did it take you to get to a level where you could make consistent profits?

Four years (1999 was too easy and we will never see that again in our lifetimes). 2000 was the first year, when the market tanked, and I beat the market by 1000%+ that I realized that I could do it. I have always beaten the market returns but trust me the market still beats me at being very difficult. I can not stress enough how difficult this really is. If you do not get any luck and have only skill in the stock market, you will not make money. You seriously need skill and luck. Since I have no luck, I am very fortunate to be beating the market every year since 1999.

What single piece of advice would you give to personal investors as we all fight to find and keep profits?

Never give up. Either you have it or you don’t. If you struggle for 10 years and are still interested TRUST ME in 20 years you will be very wealthy. However, wealth will never equal happiness. Live and love life. Have fun. Make sure you do what you love. If you do not love this game do not do it. Honestly, I hate this game so much that I love it. But if someone asked me “surfing or stocks?” The answer is simple and I do not even have to think about it. Surfing.

Interview 2.0

To start off, would you highlight your average return on a position, your success rate (% of stocks from which you profit), and the size of your average position in dollars?

All of that information can be found here. I was tracked by a subscriber in an excel spreadsheet going over my purchases and sells over the past year.

We’ve seen a bull market with significant gains since the bottom in early ’09 (Dow). What do you expect from the market in the coming years? Also, do you subscribe to IBD’s method for determine market trends?

I can not predict the future and never will try to. Nobody knows what will happen in the future and when they say they think this-or-that will happen it is completely ego driven and they want to be seen as “important and smart.” The truth is, nobody, and I mean nobody, can completely look at all the data and be correct about the future. It is a total crap-shoot. I play the now. I live in the now. There is no room for the future. It is what it is and that is that. Also, 130 years of data of facts proves that IBD’s way of determining market trends is correct. However, in all fairness, I think some of the writers of IBD might not be investing money in the stock market. They don’t have what I would say is “the touch.”

I’ve been studying the articles you’ve written about your trading strategy (which I will include links to) and was curious if you are still using the same chart setup? (The setup consisted of price with a moving average up top, volume and TSV in the middle, and BOP, MS, and RS to the S&P 500 in the bottom.)

To keep it simple, yes. The same setup I’ve had since 1999.

Click to Enlarge.

Using your chart setup, what exactly to do you look for that triggers a buy or short signal?

Volume, price, and BOP. Just like always. Big volume, a clear breakout/bounce, and heavy BOP either to the upside or downside.

Do you have a written/typed checklist of some sort that you follow when trading?

No, it is all in my head. The routine is like breathing. You just do it at this point.

How do you determine the point when you take profits/limit losses? Do you have an exact system for exiting positions?

The chart tells me what to do. Sometimes you get it right and look like a genius. Other times you get it wrong and look stupid until you get it right again and look like a genius. I take every buy/sell signal from my charts. It’s definitely more of an art than a science. I laugh at most “mechanical/black box” systems.

Do you add to existing holdings? If so, what is your strategy for this.

The chart. It is all about the signal. Breakouts/bounces on volume. I have added to positions on pullbacks in my IRA in high-priced CANSLIM quality stocks but it must be coming right off the 50 DMA on volume with a very low risk to possible reward.

How about ETF’s? Do you stick to stocks or have you started to trade other securities?

Only stocks. No ETFs. Not the same ballgame. Lazy man’s game.

Lately, I’ve started to add the IBD composite score as a screen component (only going long companies with a score of 80 or higher). Do you have a level of fundamental analysis in your system? Does share price influence your picks?

Share price and quality of fundamentals matters everything. I don’t care how nice the chart is, if fundamentals are not there, it will be small. An ugly chart but making a clear move with fantastic fundamentals will always beat a perfect chart with ugly fundies.

What would you say was the tipping point when you transitioned from an amateur to a professional?

That will never happen. I am and always and forever will be an amateur in this game. You just got to cut losses and learn your history and have amazing patience for learning. This is the hardest “game” to ever play and win at. Harder than blackjack, harder than poker, and harder than almost anything you can think of.

I want to thank Josh for his time and help in putting this together. Much appreciation! Again, if you would like to get in touch with Josh or get more information check out his site, BigWaveTrading.com.

Stocks Rally On Higher Volume Following The Light Volume Holiday Trading

2011-01-03T19:17:00.002-10:00

While MarketSpeculator/BigWaveTrader is on vacation on my stomping grounds of Maui, I will fill in with some brief comments, until he returns. — Josh Hayes

The market had a very strong session today and despite finishing off the highs overall it was a great day. The biggest positive of today is two fold. For one, my current holdings had a fantastic day with the biggest CANSLIM positions having some of the bigger gains. Second, my main long scan is full of stocks. These two events tell me that today was a great day, despite us finishing off the highs.

For those of you familiar with me, you know that I do not read or watch anything anywhere on the stock market. I simply use charts on the indexes and individual stocks. When I see a chart pattern that is extremely bullish based on the past 130 years of historical data about the markets biggest winners then I dive a bit deeper into the fundamentals. However, when it comes to macro events, I could care less. When you live on Maui and have made your living via charts the past 12+ years, you realize more and more everyday what a pile of junk most traders infect their brains with.

The bottom line to that is that if you are looking for a “reason” as to why the market did what it did today well I can’t help you with that. If you are looking to make money on the actual actions of the market based on what people “believe” caused the market to move well that I can help you with.

This market continues to be in a strong uptrend establishing itself well above the 50 day moving average. Until the market turns lower on heavier volume making lower highs and lower lows, along with my current holdings showing distribution, then and only then will I entertain a possible topping scenario. Until this occurs, I am just riding the trend higher. That is how you make the real money, and not just scraps, in the stock market.

As Big Wave Trader knows by now Maui is a beautiful place and I doubt you will be hearing from him until he returns to the mainland. Can you blame him? I hope everyone had a wonderful holiday season and while it may not be an easy transition back into work mode, I will be here doing as much as I can to make sure you continue to profit from this rally. Aloha everyone.

Stocks Escape Distribution, but Leaders Weaken a Bit

2010-12-14T19:12:00.001-10:00

The market gets a late day save as the NASDAQ escapes back to back distribution days as the Federal Reserve rate announcement induces volatility. In the early going the market did stumble, but buyers stepped up and supported stocks prior to the Federal Reserve rate announcement. Stocks spent the majority of time heading sideways prior to the rate announcement. Then came the volatility, the Federal Reserved announced its decisions and stocks went into a volatile mode. By 3:30pm EST it appeared stocks were headed for a deep dive. However, buyers stepped up and saved the market, especially the NASDAQ from back to back days of distribution. Despite the market avoiding distribution today was another day of stalling and a bit of underlying weakness casting doubt on the current uptrend.

Precious metals started the day off well, but ended in negative territory. A big key was the reversal in the EURUSD reversal and pop in the US Dollar. Perhaps this was a one day wonder, but it does appear there is underlying weakness in some leaders casting shadows over the overall market uptrend. By no means does this indicate the “end” to the uptrend, but we need to be prepared for what the market has in store for us. Be prepared and stay focused.

Breadth has been waning and it can be seen in the McClellan oscillator a measure of breadth. While this indicator is a piece to the puzzle it doesn’t fill out the entire picture. The underlying weakness in some leaders is concerning and should be taken notice. However, we aren’t jumping the gun. A few of our leaders may be forming right sides of their bases rather than breaking down. However, any further selling here will certainly cast a very dark shadow on the market. Be prepared.

Cut your losses short.

Stocks Stage Reversal as Volume Soars

2010-12-07T21:31:00.000-10:00

Current market rally stalls on volume

A brokered deal in Washington on tax cuts and the unemployment extension helped boost futures in the morning. Stocks jumped at the open only to face selling pushing stocks to lows by mid day. Volume on the NYSE was lifted by Citigroup after the government unloaded its remaining shares of the company. Citigroup traded 3.26 billion shares accounting for the majority of the change in volume on the NYSE. However, on the NASDAQ volume jumped more than 18%. The market at the end of the day looked poised to push into the highs of the day before the 3 o’clock hour. Rumors on the street of more insider trading probes helped sellers dump stock on the market. By the end of the day stocks finished on the lows putting in a terrible stall day.

Today is not the end all be all, but more importantly you must be aware of your stocks and how they are acting. One must take profits and cut losses. However, you have to go stock by stock and sell appropriately. If your stock is giving you profit signals ignoring them will only have you wishing you would have sold earlier. With today’s action there are a few stocks that appear to be flashing sell signals and we’ll adhere to them.

Sentiment remains high, last week we saw the AAII Bulls jump to 49.66 and has yet to see sub-40% for quite some time. Coupling the reversal today with sentiment a shake out or a deeper correction may be our midst. If today was not a signal of what is to come we’ll certainly see the market reverse course and continue higher. However, if our market leaders which took a hit today; decide to fall apart we’ll certainly see this market push lower.

Before today, the market and leaders were looking decent. Today’s action certainly put a dent into our leaders and we would like to see the damage limited to today. Regardless of what happens always play great defense and that is to cut your losses short. We may experience further selling, but the importance should be placed on your portfolio of stocks.

Gold and Silver Shine as Small Cap Stocks Lead Stocks

2010-12-06T23:46:00.001-10:00

Bernanke’s interview on 60 minutes spark fear over his handling monetary policy

Gold and silver soar after Bernanke’s 60 minutes interview on Sunday night. Stocks consolidated nicely with the Russell 2000 index leading the way finishing higher by 4.44 (+.59) points. Volume was lower across the board, but Monday’s have become light volume affairs. Without economic news stocks moved lower during the morning and gained traction just after noon time. Only late day selling put a negative spin on the day, but with market leaders pushing higher the close was only a blip on the day. The markets consolidated nicely with market leaders pushing higher and our accounts higher.

Bernanke continues to push his loose monetary policy forced investors to gold and silver. The moves in the precious metals are an indication the market does not trust Ben Bernanke handling monetary policy. Gold and silver have been a measure of “money” for thousands of years, it has real history. The dollar is in effect a paper currency and is being devalued by the Fed’s loose monetary policy. It really boils down to the Government running surpluses and the Fed tightening monetary policy before gold and sliver stop their run.

Small cap stocks are taking the lead and this observation is a positive sign for the market. When small caps lead it signals risk adversion is taking a back seat and traders are willing to pay up for stock. When large cap stocks lead, the Dow and S&P 500 is a sign the market is getting tired. We saw this in October and November of 2007. In addition, with the NASDAQ showing positive signs and the Russell 2000 leading this market is poised to continue its run.

Not much in the way of economic news out this week and the headlines will certainly be pointed to the Jobless claim figures on Thrusday. In addition, the EURUSD will continue to be a cross currency rate to watch as the market has traded in concert with the rate. At some point the market will break the correlation, but for now they appear to be trading in tandem.

IBD went back into rally mode last week. They used the Dow Jones Industrial Average to turn the market in correction mode. As it turns out, this was not a wise move. We pay attention to our leaders and the NASDAQ, the Russell 2000 is not too far behind. Stick with the leaders and the laggards should be left behind.

Always cut your losses short.

Stocks Advance as the Euro Rebounds

2010-12-02T20:43:00.001-10:00

Stocks approach 2010 highs as European Debt fears subside

A bigger drop in jobless claims then expected, did not stop the market from pushing higher closing just off the highs of the session. What did help the market was a jump in pending home sales figures suggesting buyers were out procuring new homes. Preliminary volume figures showed volume dropped on the day, but the underlying action was still poisitive. Financial and retail stocks were the big winners of the day as the European debt crisis fears subsided giving a boost to banks. Along side the rise in the market was the Euro stabilizing after its most recent run in with sellers. Leaders acted well today and the market had a decent follow-through from yesterday’s action.

It would have been better to see volume jump on the day as if institutions were rushing in to gobble up shares of stocks. Unfortunately, we may be seeing a similar story as we did last year with the market pushing higher without volume. The strong price action is enough to override the lack of volume we are seeing in the overall market. Again, pay attention to your stocks.

Bullishness once again jumped as the survey out of AAII showed bulls heading to 49.66% and bears at a lonely 26.21%. Bulls are off of their highs just from a few weeks ago, but the recent Euro news and market reaction failed to scare bulls from their positions. Perhaps this is the reason why we saw the market hold up on its 50dma. For whatever the reason the fact remains the market still is in position to push back into new high territority before any substantial move lower.

Tomorrow’s headlines will certainly highlight the jobs report set to be released at 830am EST. The market so far appears to be pricing in a decent report showing gain of 145k jobs. This week the market saw a better than expected rise in private payrolls from ADP and an upside surprise tomorrow should help the market. However, we aren’t in the guess/gambling game. We’ll take our clues from our stocks and act accordingly. Panic buying and selling only nets you red in your portfolio. Stick with your market leaders and use their action to navigate the market waters. Remember, “thinking” in this game is a dangerous thing.

Cut your losses and enjoy the weekend ahead.

Stocks Jump on Global Economic News

2010-12-01T18:43:00.003-10:00

“Simplicity is the key to brilliance” – Bruce Lee

Stocks turn in a big rebound as economic data in the US and China along with a positive Portugal bond offering help ease the fears of a European debt crisis. ADP Employment change was better than expected as its payroll survey showed an increase of 93,000 private payroll jobs. ISM manufacturing index edged down from October, but was slightly better than expected at a reading of 56.6. Mid-day a rumor of the US backing the IMF bailout fund for Europe pushed stocks to their highs only to have the rumor to be false. Stocks closed just off the highs of the day, but in line with the highs before the rumor mill picked up. Regardless, today was a positive day for the market as stocks jump pushing the NASDAQ above its April high.

Volume was lower, but there was a volume surge at the end of yesterday’s session skewing volume. Many funds have November year-ends and we cannot rule out some funds adjusting their portfolios heading into their year-ends. However, for much of the day the pace of volume outpaced Tuesday’s session which is a positive sign for the market. Like September 1st the first day of the month has been helpful to stocks and today was no exception.

Market leaders enjoyed today session despite some negative action a few yesterday. However, we stress we must pay attention to our own stocks and make decisions based upon their action. Your holdings are your most important decision making tool you have to gauge the market. Are your stocks going through “normal” corrections? IGTE is one of example of an abnormal correction where the stock took a dive to its 50dma on big volume. The stock was a leader until yesterday and its weakness carried forward into today’s action. If all our holdings acted like IGTE we’d be out of the market, but fortunately it was the only one despite the broad market sell-off. Stick to your stocks.

There are a few certain things in the market and that is you will never be able to OUTRESEARCH the big instiutions in the market. They have vasts amount of resources at their disposal to conduct research, it is best to follow their movement rather than to outdual them. Many traders feel they can outsmart the big boys as well as the market in general. Unfortunately, you will never outsmart the market despite all your efforts Accept the reality of the situation and it will only be then you’ll be able to become a successful trader.

A positive day for the stock market and as the greats like to say: the trend is your friend.

Stocks Jump on Global Economic News

2010-12-01T18:43:00.001-10:00

* Setting Euro Fears Aside The Market Rallies off the Lows of the Session

2010-11-29T12:24:00.000-10:00

Stocks rebound as buyers step up and support the market

The market returned from a holiday shortened week greated by hefty selling as fears over deapening of the European debt crisis. Stocks hung around the lows after a steep sell off heading into the 10am hour. Even a positive Dallas Federal Reserve Manufacturing activity report could not hold off sellers from pushing the markets to their lows. Many leaders were holding up during the sell-off, a positive sign for the markets in general. Just before 2:30pm EST the markets found solid footing and pushed higher back to the day’s high and closing just off the highs of the day. Another positive move by the market bouncing off support and as market leaders continue to act positive the uptrend remains intact.

Market pundits have been pounding the table the market had reached a top. CNBC has been running articles on the market topping and we have seen the highs of the year. While this may be true, as no one person knows the future what we have in front of us says we will push higher. Market leaders remain positive and in control. Not too mention smalal caps are indicating strength and when small caps lead it signals traders are willing to take on risk rather than unload it. The moral of the story is to pay attention to the market leaders and their price/volume action.

In the early going the VIX jumped considerably as fears over a market collapse continued to put pressure on stock prices. By the end of the trading session the VIX index reversed its gains and closed lower indicating further decline in the index is instore. The VIX certainly indicated near capitulation type selling just without the volume. Panic selling over the European crisis is noteworthy, but the action at the end of the day is the most important indication of where the market wants to go.

This week is going to be a big week as far as economic reports. Tomorrow kicks off the week with the following reports: S&P Case Shiller, Chicago PMI, NAPM-Milwaukee report. The Fed’s beige book is out later in the week and CNBC’s favorite the Non-Farm Payroll report on Friday. There should be plenty of noise generated this week, but we’ll be focused on the market action and a laser focus on our leaders.

Tomorrow closes out the month and there will be talk about window-dressing in terms of the market action. We are looking for the market to build upon today’s move off the lows and push higher.

Top Current Holdings, Total Return, And Date Of Purchase

2010-11-28T10:49:00.000-10:00

I am currently fully invested in all of my regular accounts and my IRA. Don't forget to check out the 2010 Big Wave Trading Performance.

ticker symbol – total % return since first purchase – date of purchase

URRE 137% 10/26
MIPS 119% 8/20
RES 89% 7/13
JOBS 81% 8/16
SPRD 59% 8/27
GGAL 54% 10/19
TZOO 47% 9/28
CPWM 44% 11/15
XXIA 40% 8/31
FFIV 37% 10/22
IGTE 34% 9/17
AXTI 34% 9/20
ARUN 30% 8/27
TRS 30% 10/1
IVN 27% 9/14
CGNX 27% 9/24
FVE 27% 9/10
NSU 25% 8/20
MHR 24% 10/12
EPHC 24% 10/15
ACOM 24% 10/4
NNBR 21% 9/1
BIDU 21% 9/20
CWEI 21% 11/2

Performance of Big Wave Trading Ideas

2010-11-26T14:40:00.001-10:00

Great performance, but an important lesson to be learned

Cutting your losses makes a big difference in performance and the following charts prove by riding winners and cutting losses you can outperform the market.

How profitable are trade ideas from Big Wave Trading?

Our batting average

Check out our Membership levels here and sign up here.

If you have any questions please email us at sales@bigwavetrading.com

Have a HAPPY THANKSGIVING!

A BIG THANKS TO BJESSE (BWT MEMBER) FOR PUTTING THIS TOGETHER!

UPDATE TO THE POST ABOVE BY BJESSE:

A couple days ago I posted Josh’s YTD trade performance for all but 68 of his 2010 trades. Today I filled in the holes, which consisted of trades closing early in the year. Here are the results for all 614 of his trades YTD. Again, any errors are mine.

Note this confirms Josh’s long term average of 60/40.

I have also included a plot of the Gain/Loss percentage for each trade. If anyone ever doubted the wisdom of “keep your losses small” this should convert you. Going through the trades I was struck again by just how disciplined Josh is at following his sell rules, and how that preserves profits far more often than it results in missed gains.

I have always found it difficult to let my winners run. JH is a master, as this shows; his average gain is 33% with a standard deviation of 44%.

I find these results nothing short of remarkable. Awesome even. It is not a trivial matter to translate Josh’s trades into profit dollars in your own portfolio. But as I said before, there is gold to be mined here.

Thanks Josh and BWT! The CEO should give you a huge bonus :)

North Korea and PIIGS Weigh on Stocks as Volume Rises

2010-11-23T19:14:00.000-10:00

Fears rise over PIIGS bailouts and potential war in the Korean Peninsula scare traders away from stocks

The markets were rocked with news out of the Korean peninsula where North Korea and South Korea fired upon each other. Futures weakened considerably throughout the early morning session as European fears continued to put pressure on stocks. A better than expected GDP results and a spike in the Richmond Fed Index couldn’t help push stocks higher. Volume on the NYSE rose much higher than Monday’s level where the NASDAQ only saw its volume barely above Monday’s level. Market leaders were largely positive, but overall the damage was done with the banks. Today’s action was not ideal, yet we were able to find support at the lows with a few leaders finishing in the green.

Panic certainly struck the market today as fears regarding Ireland’s bailout, but now attention is turning to other countries making up PIIGS. Spain is the real issue here whereby its bailout will certainly be the grand daddy of them all. It is surprising the European Union hasn’t set up a TARP like program to deal with its banking issue, but what really needs to occur is for governments to run surpluses with slashing entitlement programs. Many will cry foul and ask for bigger taxes, but increasing taxes does not solve the problem of insolvency. It is an easy equation and for it to balance out spending needs to be drastically cut. But, all of this, for our markets with leaders showing promise we may have seen one giant shakeout.

It is entirely possible to see the market roll over here and we’ll be very quick to cut our losses and push to the short side of the market. However, with the market showing support at the lows today along with plenty of leaders finishing in the green today it shows a positive direction for the market. Let’s not use “we are oversold” as an excuse for the market to go higher. We can certainly stay oversold for quite some time, but with the recent selling we should see a drastic reduction in AAII and II Bulls. Stick with the leaders and your stocks.

Tomorrow morning we are going to get a flurry of economic data the market will get a chance to digest. More importantly will be how the market reacts to this as well as any news coming out of Europe and the Korean Peninsula. Any further downside should throw caution to the wind and should get you on the defensive. Always be prepared and have a plan and as always cut your losses.

Reversing Course Stocks End the Day off the Highs but with Big Gains

2010-11-19T09:02:00.000-10:00

Better than expected jobless claim figures and a big jump in Philadelphia Fed index pushed stocks higher. Volume rose across the board as traders rushed to get back into stocks. Late day selling did knock stocks off their highs of the day, but gains were plentiful and solid. Today’s action does go a long way in to bring back the current uptrend. Given the gains and volume it is highly probable the rally will continue.

The index I focus on is the NASDAQ and second would be the S&P 500. Outside of these indexes there really isn’t any other index I want to pay attention to. The Dow Jones Industrial average is an ancient index and using this index to put the market in correction is not something I would put much stock into. Recently, the Dow had 6 distribution days yet the NASDAQ had only suffered 3 days worth while the S&P 500 had 4. The leading indexes, NASDAQ and S&P 500 didn’t have the heavy distribution you normally see at a market top. If we do see distribution over the next few days it would signal major weakness, but for now the uptrend still lives.

Many are comparing our recent market with the April highs. Why not, it is recent history and we all tend to think history repeats itself. The major difference is the February through April run came off a 3 week 8% decline in the market. Our recent uptrend came off the back of a longer and deeper correction. Thus, the probability of a 5% pullback and the uptrend remaining intact is high. Perhaps we do roll back over, but until we get full sell signals in our stocks and the NASDAQ/S&P 500 pile on the distribution this uptrend will continue.

Well, my McClellan is still in oversold territory, but that will hardly mean anything if distribution creeps back into the market. One index did see a 17 point drop was the AAII Bull index while the index dropped to 40% while the bears jumped to 33%. Sentiment took a big hit and it isn’t out of the ordinary for a market to shakeout nervous bulls. Especially if sentiment gets out of hand like we saw over the past few weeks. The drop in Bulls does not guarantee we will rip higher over the next few days, but it is a good sign the shakeout over the last few trading days has cut down sentiment.

Tomorrow is an option expiry Friday where volume will be exaggerated in the early going. It’ll be important to see who the market reacts throughout the entire day as well as leading stocks. The most important thing would be to cut your losses short.

Late Day Volatility Brings Excitement as the Market Awaits GM’s IPO

2010-11-17T19:52:00.001-10:00

Market leaders did little to inspire, but we held Tuesday’s low

The market did very little to calm the nerves of anxious bulls as the Dow closed slightly lower while the S&P 500 closed just higher. Volume ran lower across the board as the market was able to hold off from moving past Tuesday’s low. Closing slightly higher the NASDAQ fared better, but the index ran into a brick wall in the last hour as sellers slammed the index. A wild ride in the last hour made the day interesting and kept traders on their toes. We did see the market close off their lows, but overall the market lacked an impressive rebound after Tuesday’s heavy volume selling.

We may be oversold, but like the market was overbought we can see this market stay oversold for quite awhile. One thing is for sure, we have cleared the overbought conditions from the September 1st market uptrend. It all boils down to your stocks and what they are telling you. Are they giving you complete sell signals? Profit taking signals? Ignore the noise and hoopla from the financial media and focus on your stocks.

Much will be made of the GM IPO as it starts trading tomorrow. At this time we do not have a specific view on GM simply due to the lack of trading history. No one really knows how the stock will act, but it does appear most feel the stock will quickly sell off as the stock begins trading. Speculation is swirling around the company, but at least in its latest quarter it did not lose money on every car it sold. Wait for the stock to trade for a few days and set up a possible IPO base before jumping in. Despite your feelings on the bailout or how the car company has been handled it may present an opportunity to make some money.

If we are to move higher will need to see a better showing out of our market leaders. Today a few leaders did make a move higher, but there wasn’t a contingent of leaders pushing the market higher. It’ll be important for the market to have the leading stocks push higher like we saw on September 1st. Remember to cut your losses short!

Stocks Tumble in Heavy Trade As Fears over Economic Conditions Grow

2010-11-16T19:34:00.001-10:00

European Debt Crisis 2.0 and Chinese Inflation strike fear in the market.

“If a tree falls in the woods and no one is around, does it make a sound?”

There were plenty of traders around to see the market make take a dive to close lower (NASDAQ) for the fourth straight day. Volume jumped across the board as traders feared the worse in the European Debt crisis 2.0 and Chinese worries over inflation. Late day selling tried to collapse the market, but buyers were able to push stocks off the lows of the session. Despite the last ditch effort the market still closed near session lows.

Investors Business Daily put the market into correction mode after signaling the market in correction. IBD has had a streak of bad luck when putting the market into correction mode. After putting the market in correction we saw the July rally and again in September. While leading stocks have been beat up pretty good after a few days worth of selling they still are holding their moving averages. Remember, taking profits, working a position is a wise strategy and if you failed to take profits on the way up you will not forget in the next rally.

The McClellan Oscillator has moved further into extreme oversold conditions. Remember, these conditions may last longer than you might think. However, the oscillator is about at the same levels we saw at the February, July, and August/September lows just before the market rallied. At the very least, we should see some sort of bounce from the market. Will it turn into a new run, that remains to be seen and quite frankly we’ll need to see some serious strength from leadership. Anything is possible, but panicking and selling out because you panic will only net you heart ache.

It appears many pundits are rushing to be the first to call a top in the market and get on the short side. This includes IBD, who I respect greatly and appreciate the information they provide and that I pay for! At any rate, we did suffer quite a bit of damage, but we have yet to see “the great unwind.” The market is the ultimate pricing mechanism, but speculating on what may happen is gambling. Take cues from your tocks and if they are flashing classic sell signals.

Stay prudent in this market and avoid panicking!

Volume Slides, but Late Day Sellers Push the Market to the Day’s Low

2010-11-15T19:15:00.001-10:00

Merger Monday fails to spark buyers

Late day weakness left a sour taste in traders’ mouths as late day sellers closed out the market near session lows. Mixed economic data got the day started with a better than expected Advance Retail Sales figures surprised the market. However, a very disappointing Empire Manufacturing report did not help ease traders’ minds about the economic recovery. Volume ran light throughout the day with the exception of the early morning gap where the NASDAQ experienced volume running higher than Friday levels. At the end of the day we were able to hold Friday’s lows, but the late day selling suggests we have further to go on the downside.

Friday’s sell off did some damage, but left the S&P 500 with 3 days of distribution and the NASDAQ with only 2. Given the bullishness from AAII investors last week it is no surprise this pull back has gone as far as it has. The market is, at the moment digesting more than 10 week’s worth of gains and to expect the market to continue to rise is foolish. Remember, markets do not move in straight lines and history shows us little intermediate corrections will occur in market rallies. While we certainly could be seeing a top form we have yet to see the signs of a “top.” Right now, we are simply in an intermediate correction.

One indicator I have neglected is the McClellan Oscillator. Price and volume reign supreme, but the McClellan oscillator has been a decent indicator regarding oversold and overbought conditions. Keep in mind the oscillators including the McClellan shouldn’t be used in absolute terms but as a guide. Right now the Oscillator, depending on how you calculate it is in oversold territory. Oversold conditions can last much longer than you expect and May/June certainly proved this, but the current pull back certainly seems to be nearing an end. Whether or not a bounce will produce much remains to be seen, but for now we must be prudent investors.

We did see a few big cap technology stocks take a bit of a hit as sellers really took to these stocks as they have been leading the market higher. Even with heavy volume selling these stocks have held key long term moving averages. Intermediate pullbacks like we are seeing right now highlight the importance of buying right and not chasing including these big cap technology stocks. If you had chased these stocks you would be sitting on hefty losses and being forced to cut loose your positions. Staying disciplined is the best course of action.

Be defensive right now; keep any new positions on the lighter side until this market can prove its worth by pushing higher on volume. As always cut your losses!

Stocks Rebound on Federal Reserve Announcement

2010-11-04T08:03:00.000-10:00

The market responds positively to the Federal Reserves $600bn asset purchase plan

Big two market events down, one to go for this week. The Republicans stormed the elections with big wins in the House of Representatives, but failed to make a big push in the Senate. Even with a big Republican victory the market quickly turned its attention to the Federal Reserve’s Rate Decision. More importantly the market was looking for language specific to a fresh round of asset purchases from the Federal Reserve. Ben Bernanke and company announced a $600 billion ($600,000,000) round of buying of the long end of the curve. In true post Federal Reserve announcement action the market swung wildly as it tried to digest the news. By the end of the day the market closed just off the highs of the day with volume jumping above yesterday’s level and our uptrend remains intact.

For most of the session stocks spent a good amount of time in the red as traders feared asset purchases may NOT be as big as previously thought. Fear can lead you to mishandle your stocks and cause you to sell out too early. We have a strong trend with plenty of stocks moving higher. It is best to stick with them rather than to cut out of them too early. Today is a prime example you must stick with your winners until they begin to show signs of major weakness especially in a strong uptrend. Taking a portion of your position off to lock in gains is wise, but removing an entire position will cause you to sit out major moves in some big stocks.

A major hurdle today was cleared with the April highs with big volume. The market along with our leaders will continue higher with such a strong move today. If we do turn with leaders breaking down we’ll adjust accordingly, but all signs right now are pointing for this market to continue higher. Regardless of what you think about the Federal Reserve printing money or if we were pricing the market in gold the bottom line higher prices are to come.

The market will set its sight on the Unemployment release on Friday. Perhaps a worse than expected jobs report will bring on talk of Quantitative Easing part three, but at this point any is pure speculation. So far, this week we have seen the market move in a positive manor despite what we may have seen as headwinds. Friday’s number in the long run may not even matter with strong corporate earnings with the Federal Reserve and elections behind us. The key takeaway is our stocks are acting well, the market is acting well, and our stock leaders are continuing to show strength. Until this changes, all systems are go for higher ground.

Remember, always cut your losses short and ride your winners!

The Market Advances on Mixed Volume

2010-11-03T07:22:00.000-10:00

Traders anticipate positive news from the mid-term elections and the Federal Reserve Rate Decision

Election Day is here and the market cheered its arrival. Volume on the NASDAQ slid higher while he NYSE volume skidded slightly compared to yesterday’s levels. Mid-term elections and the Federal Reserve were the talk of the market as many debated the effects we may see. Clearly the market was giving a vote of confidence today with the NASDAQ extending its gains. The one drawback was the inability for the NASDAQ to take out its April highs, but we did close just below those levels. All in all, a good day for the market and helped erased any doubt yesterday and last week may have brought.

Today was a great example of why opinions DO NOT MATTER in the stock market. Yesterday’s commentary was cautionary, but I highlighted the fact we need to focus on our stocks and not our opinions. Too many traders try to time the market perfectly and suffer great losses. Identify a trend and find the leading stocks and get long. Fighting a trend is a futile effort and will only lead to you losing more money. For example, in October Doug Kass was shorting stocks because the “rally has gone on too long.” If you stuck with Mr. Kass’ investment philosophy you have been beaten up as of late.

A big win was the move in small cap stocks as the Russell 2000 closed up 2.05%. Volume figures I won’t have available to later, but the move in small caps showed this uptrend more than likely has a lot more room to run. Small caps had been consolidating and lagging the NASDAQ, but today’s move was a good signal small caps are looking to make another big push.

The Federal Reserve’s key decision tomorrow has the dollar moving lower once again. Commodities have been flying as cotton has made another all time high. Sugar and coffee have seen decent runs as of late and with the Federal Reserve continuing to print more money commodities and stocks will continue to reap the benefits of money slushing around. Crude oil continues to push higher as it too as it benefits from the excess money. Clearly the dollar is in a downtrend as it continues to price in the Federal Reserve’s monetary accomodation.

Regardless of what is going in terms of news flow it is all about the stocks. So far we continue to see our stocks acting well and not giving us major sell signals. Of course, as a stock moves higher we want to take profits and to lock in gains. Stick with your winners and cut loose your losers!

Buyers Erase Early Losses as Volume Ends Mixed

2010-10-26T17:33:00.000-10:00

Market Leaders continue strength

Early selling pressure quickly dissipated as buyers stepped up to push stocks well off their lows of the session to close positive. Better than expected Consumer Confidence and Richmond Fed Manufacturing Index figures fueled buyers just after the 10am hour. Volume ran mixed all day long with the NASDAQ volume running higher while the NYSE fell behind Monday’s pace. All the major indexes were able to close in positive territory, but the close lacked the buying surge we would have loved to see. Regardless, the move off the lows and with a few market leaders pushing higher the day was a positive one.

The NASDAQ gapped down taking out the 2480 level, but it wasn’t gone for too long. Case-Shiller pricing data was not perceived as a positive for the market stoking a bit of fear in the hearts of traders. Once 10am hit the NASDAQ was able to recover and leap frog the 2480, but found a new resistance level. 2500 level on the NASDAQ is playing resistance for now and we’ll need to see the index to push above with volume very soon to avoid the risk of rolling back over.

Market leaders are always important and most important to gauge the health of the market. At the moment our leaders continue to look strong and continue to build on gains. Our cloud computing leaders have even reversed course from their October surprise to turn positive. High fiving FFIV sprinted nearly 7% in after-hours trading after leaping almost 2% in the day’s session. FFIV was a stock that flashed a buy signal on Friday along with another cloud computing play. It is truly a positive signal for these types of move for the market.

A big mistake traders are going to make will be one of two things. Either they will sell TOO early or sell TOO late; it is ok to take profits off the table as a stock moves higher. It isn’t ok to sell off an entire position in a strong uptrend when you own a strong fundamental stock. If you do sell too soon do not hesitate to jump back on a leading stock. Often times traders make the mistake of not getting back on a stock they sold only to watch the stock blast higher. Be sure to take profits, but be wise and judicious on how you sell.

The market is set to continue its uptrend and without major distribution days and major market leaders crumbling it is hard to think we roll over here. In October when our cloud computing plays turned sour, they were able to find support at their 50dma. A good sign and now have reversed their course. If this market were to roll over we’d see more than just one group fall flat.

One group to continue to keep an eye on is the financial stocks. They continue to feel a tremendous amount of pain and for good reason. After a decade of poor management and excess leverage the filth remaining on their balance sheet will haunt them for quite some time. With that said, even small moves to the upside will help out this market and any sustained move will only support this market further.

Always keep your losses short and ride your winners!

Late Day Selling Throws a Dent in Day’s Gains

2010-10-25T17:08:00.001-10:00

Good housing data fails to spark buyers, but stocks end in the green.

An unfortunate reversal at the end of the day leaves a sour taste in the mouths of traders. A better than expected existing home sales figures did give a temporary boost to prices, but it quickly faded as the market began its mid-day weakness. Volume ran higher on the NYSE all day long, but it wasn’t until the afternoon until the NASDAQ’s volume began to outpace Friday’s levels. The last thirty minutes of the trading session saw sellers dominate trading. Many leading stocks held up nicely, but a few did follow the general market. We did not see any major reversals from leading stocks as many remain very healthy. Not a great day, but our uptrend remains.

Over the weekend the G20 meetings did have a few notable headlines. In the grand scheme of things we only care about leading stocks and the price and volume action of the market leaders. If we were to pay attention to the noise coming from news outlets would only cloud our judgment and ruin our returns. It is very difficult to guess how the market will react to a certain situation, but if we focus solely on the market action and leaders we can avoid costly mistakes. We see too often traders try and “trade” news headlines and guess a new trend. It simply isn’t a wise move in this game.

We did see the 2480 level taken out, a level I had spoken about last week. Friday we saw sellers keep the NASDAQ from breaking this level even with a few leaders breakout out or getting support at major moving averages. Now the market is receiving headwinds at the 2500 level and this market will need to be able to break above and hold. And of course we’ll be watching April highs as the market approaches those levels.

Right now the NASDAQ has two days worth of distribution with a quasi stall day. Today can be classified as a stall day because volume was higher than Friday, but it was below the 50dma. The caveat is volume coming below average, but be aware if this market does flash another stall day or heavy distribution.

Tomorrow we’ll get another round of housing data from Case-Shiller and a reading from the Richmond Fed regarding manufacturing. However, more importantly tomorrow will be one week until the mid-term elections and continued talk about what it means to the market will continue. Do not pay attention to the noise, focus on the action of market leaders and the overall market!

Always cut your losses short!

Stocks Rebound from Tuesday’s Losses

2010-10-20T18:17:00.001-10:00

Late day selling ends stocks off the highs as volume slows

Late day selling put a cap on the day’s excitement as stocks rebound from Tuesday’s heavy distribution day. All eyes would point to the Federal Reserve’s release of its beige book at 2pm EST. Prior to the release the market was able to build upon its gains as it moved higher. Volume simply couldn’t keep up with Tuesday’s pace ending lower across the board. The end of the day selling certainly did not inspire confidence, but a few after-hours earnings reports helped soothe any pain. A nice recovery, but we’ll need to see the market flash more accumulation.

NFLX earnings and its subsequent push in after-hours trading gave a cheer to traders. The stock continues to be a favorite of shorts due to its “valuation.” The biggest winners of all time tend to have a high valuations are due to the demand for the stock. Regardless, NFLX stock is a true winner and continues to be a top stock. NFLX is looking to follow in GOOG’s footsteps post earnings release and avoid an AAPL like day.

Another darling in after-hours trade was EBAY as the stock shot up more than 7%. After-hours trading can be misleading, but with EBAY posting strong numbers the stock will look to move along with NFLX. Although its quarterly report didn’t come close to matching NFLX’s growth the report was strong considering the size of EBAY. The NASDAQ will get a boost from EBAY and NFLX

The market remains in an uptrend even with Tuesday’s distribution day. Despite who CNBC parades through their studios or who Bloomberg throws on the radio we have a viable uptrend. History suggests bull markets do not last longer than 18 to 24 months, but for now this rally from March 2009 can still go higher.

From a historical perspective, one our members have heard is we are likely heading for major headwinds over the next 6-12 months. Despite what Ken Fisher or other bulls may squawk about mid-term elections it is highly likely we see a correction of more than 20%. We could even delve into a 1940 to 1942 type market where we simply roll over and take out our March 2009 low much like the 1942 took out the 1938 low. Anything is possible, but for now we are focusing on the long side until we begin to see more “topping” signals from the market.

This market will more than likely push higher, but remember to always cut your losses!

Top Current Holdings With Total Returns And Date Of Purchase

2010-10-16T05:10:00.003-10:00

Long 56 stocks 98-100% invested on full margin. All longs listed were posted on the website before being purchased for subscribers of the silver, gold, and platinum packages under the ‘new longs’ section.

stock symbol – total return – date of purchase

JKS 138% 7/13
LCUT 126% 11/2/09
LGL 101% 9/8
RES 60% 7/13
JOBS 56% 8/16
MIPS 51% 8/20
ISLN 36% 8/31
ASYS 34% 9/1
CHTP 29% 9/3
SOL 27% 9/14
IVN 26% 9/14
NSU 24% 8/20
XXIA 22% 8/31
SPRD 22% 8/27
CGNX 18% 9/24
UFPT 18% 9/15

Bank and Education Stocks Weigh on Stocks

2010-10-15T07:43:00.000-10:00

The market side steps a distribution day consolidating recent gains.

New banking fears helped push stocks lower, but a late afternoon buying spree lifted stocks off the lows of the session. Today’s consolidation was not out of the ordinary considering the move in equity prices, but the late day buying did help ease any worry. Education stocks once again were hit hard after APOL had some tough news for the market to digest. Banks and education stocks were the leading cause of the equity decline today even as volume came in lower across the board. The market was able to avoid distribution with volume sliding lower on the day. A great day of consolidation for the market showing this uptrend is quite healthy.

The real story was in after-hours trading with GOOG stock jumping around 9% after the company reported its quarterly results. We can get into the positive news out of the company like a rise in paid per click but the true test will come when the stock trades tomorrow. Will the stock gap and run? Yesterday we saw a few stocks gap and reverse like JPM, IGTE, and ADTN. GOOG on other hand has been a stock beaten up after earnings reports as of late. The strong posting in earnings is a positive sign for technology stocks.

Once again our financial stocks have a new fear to get over. The foreclosure crisis is just another step in our banking system deleveraging a system riddled with fraud and illegal behavior. Removing the excess leverage in the system is uncovering many naughty secrets from the housing boom of the last decade. When the government swooped in and saved the banks it kicked the can down the road rather than dealing with everything up front. We can equate this to taking off a band-aid, when the government stepped in it essential was stopping the band-aid from being ripped off. Now, we are dealing with a slow wrenching pain. Regardless, banks continue to look weak and not a sector we’d entertain, but they do weigh on the overall market.

It is quite impressive given the education stock debacle and foreclosure crisis the market was able to avoid a day of distribution. Normal corrections during an uptrend are to be expected, but we are far from what is normal and to see the market shrug off this type of fear is good news.

This uptrend is very healthy and we continue to find more stocks breaking out of bases it is hard to think this market cannot go higher. Stay focused and enjoy the weekend!

Zoll Medical Corporation: Strong Growth in a Growing Medical Equipment Market

2010-10-14T16:30:00.002-10:00

As per their website Zoll Medical is a leader in medical products and software solutions, helps responders manage, treat, and save lives in emergency rescues and in hospitals; outside the hospital while at work or home; in doctors' and dentists' offices and schools; in public places and on the battlefield. ZOLL's products contribute to managing patient care and savings lives, as well as increasing the efficiency of emergency medical, fire and hospital operations around the globe.

When we look at the recent growth in EPS and sales for Zoll Medical (ZOLL) we can see that their products are clearly in demand. During the past two quarters YOY EPS growth has been 113% (.17 compared to .08) and 271% (.26 compared to .07). Sales growth during the past four quarters YOY have increased 2%, 18%, 15%, and 17%. Even better, 2010 and 2011 EPS estimates are for gains of 89% and 38% respectively.

The company also carries 0% in debt, has a Return on Equity of 3%, an EPS growth rate of 32%, and a cash flow of $1.34. Zoll Medical definitely has strong growth and sound financials.

Stocks do better when they have other stocks in their industry group performing well on a RS basis. Nxstage Medical (NXTM), Dexcom (DXCM), BSD Medical (BSDM), Tearlab (TEAR), Synergetics USA (SURG), CAS Medical (CASM), Hill-Rom Holdings (HRC), and Cephid (CPHD) are just some of the stocks in the Medical-Systems/Equipment industry group that carry RS ratings of 80 or higher. So this is just one more item in favor of Zoll Medical moving higher.

Recently mutual fund ownership has started to increase again from 94 funds in the most recently reported quarter from 90 the quarter before. However, four quarters ago the stock did have 102 funds invested in it. That is OK, since we do have growth in the most recent quarter.

While these numbers are impressive for Zoll Medical, the most important aspect is the chart. Is the stock in an uptrend and under accumulation? Yes. Since that is the case we need to find a good low risk high reward entry. On that end the move on Thursday is definitely what I was looking for.

The stock bounced off recent support on strong volume with the stock breaking above the short-term downtrend line. The stock also closed very near the HOD indicating the buying should spill over to Friday morning. The purchase price for me is the 33.41 close on Thursday.

This is a great stock with strong fundamental growth and a bullish chart under accumulation. With the market being in a current uptrend thus putting the odds of purchasing this stock well in our favor, Zoll Medical will be a new purchase for me on Friday.

If the stock does not move higher immediately, I will be cutting my losses—protecting my hard earned capital—with a close below the LOD of Thursday (32.25).

Disclosure: Long Zoll Medical (ZOLL)

Stocks Slide in Last Hour of Trade, but End Higher on Volume

2010-10-14T08:08:00.000-10:00

Current uptrend logs another day of accumulation

Late day selling dampened the mood, but an overall positive day in the markets. Volume jumped across the board as the market mostly cheered about positive earnings reports and tepid inflation readings. Import prices were relatively in-line with expectations despite the overwhelming talk about the Federal Reserve second round of monetary easing. The late day selling is not surprising considering the move in the markets, but the action from stocks post earnings reports leaves a sour taste in the mouth. Even with the weak close the market is still in a solid uptrend.

The weak close suggests we may see a pull back tomorrow. The chances are good we see the market take a breathier. Consolidation is a necessary process for the market to undergo as we simply cannot go straight up. These periods can last a few hours in rare cases to a few days. As long as we do not see market leaders collapse and distribution the resting period is quite normal action. Pay attention to your stocks, if they begin to weaken take notice and make sure you are taking profits.

The earnings curse once again hits this quarter with JPM, IGTE, and ADTN reversing after seemingly good earnings reports. JPM stock is far from one we would like to be long, but the action in IGTE and ADTN both leaders are slightly troubling. Both were able to find support at their 50dma, but their charts are now damaged. It will take some time to repair the damage done today, but it isn’t something we would want to stick around to wait for. We’ll need to see the stock tighten up and form another base before we would get long.

Another big deal of the day was AAPL stock hitting the $300 market. The stock was able to hang onto the mark as the company said it would release a new operating system. AAPL stock has been a stalwart of this market rally and has yet to suffer any major setbacks. If this market is to go higher, we’ll need to continue to see strength in the market.

In a surprising move a deal for YHOO stock surfaced after-hours pushing the stock higher by 13%. The move will certainly help the NASDAQ tomorrow, but the question will be if the rest of the market will respond positively to the bid for a beat up technology stock. On the other hand you have ORCL posting a strong day without a takeout rumor. Ideally, you want to own a stock that is strong and not guess whether or not the stock may be taken out.

Be mindful of your losses, always cut them short.

Top Current Holdings With Total Returns That Closed Higher Today: JKS 140% JOBS 65% LGL 64% RES 57% MIPS 47% SOL 41% ISLN 31%, IVN 30%, NSU 24%, CGNX 21%, XXIA 21%, GBG 20%

Jobless Claims Drop Along With Volume as Stocks End Mixed

2010-09-16T15:32:00.001-10:00

ORCL Posts Positive Earnings as the Stock Jumps After Hours

Today was another day of gains in the market with the NASDAQ closing higher for the 10^th time in the last 11 sessions. Early going the market was given a dose of good news with Jobless Claim figured showed a claims fell more than expected. However, buyers weren’t excited as the market pulled back in the morning, even with the Dow finding green territory. Volume ran lower throughout the day as sellers didn’t gain much traction. Small caps pulled back and underperformed noticeably, but with volume coming in on the light side it hasn’t become a glaring red flag. While the crowd continues to look for a pull back this market continues marching higher.

AAII sentiment survey showed Bulls jumping above 50% while Bears dropping below 25%. The shift certainly highlights the need for consolidation in the market. While the sentiment survey isn’t a sell signal it can signal turning points. However, with the market off its lows and still well off the April highs the survey shows how jittery the crowd can be. Back in August we did see the survey along with the Investors Intelligence survey show bears at max levels indicating an intermediate low. Remember, sentiment survey’s aren’t meant to be “indicators,” but reference points.

If you read financial websites and other pundits most will let you know about obvious resistance levels and overbought conditions. We are more concerned with our stocks. Normal corrections or pullbacks happen and are a part of any uptrend. Many will sell out of positions well before ultimate tops and lose out on big gains. With so many top quality stocks continuing to act well it is not likely a pullback here would lead to new lows. In fact, a pullback may offer secondary buy points. Let the stocks guide you rather than opinions about the market.

Tomorrow we have options expiry and most certainly push volume higher. Friday’s action will certainly be helped out with ORCL’s earnings. In after-hours trading ORCL jumped 4.6% after posting better than expected earnings. Revenue jumped to $7.59billion when compared to $5.06billion a year ago. The jump was welcomed by the market and should continue into tomorrow’s market.

Keep in mind chasing stocks away from a proper buy point will only increase the odds you being shaken out of the position. A huge benefit you get from Big Wave Trading is we do not chase stocks and buy properly keeping the emotion out of trading. Always cut your losses short as huge losses are very difficult to recover from.

This economy has been tough for many Americans. While government figures point to unemployment just under 10% other statistics show unemployment in the double digit range. Unfortunately, this has forced many Americans to tighten their belts, but there is something you can do! Take charge of your financial future with Big Wave Trading. Email us at sales@bigwavetrading.com

Top Current Holdings With Total Returns Since Purchase Up Today: JKS 128%, LCUT 137%, RDCM 59%, ISLN 21%, MMYT 20%, QLIK 15%

All content is available at BigWaveTrading.com

2010-02-15T13:22:00.001-10:00

This blog will be shut down.

Factory Index Gives a Boost to Stocks

2009-08-22T14:23:00.000-10:00

Just no quit in this market, stocks rose for the third straight day as positive news from the Philadelphia Fed Factor Index rose unexpectedly. In other economic news jobless claims rose as well giving some concern a recovery jobs has yet to materlize. The 3+ million jobs President Obama promised with the stimulus has netted a loss of over 2 million jobs. Historically speaking jobs is a lagging indicator and we continue to see jobs being lost. Volume was mixed in the morning with a buying surge on the NASDAQ while the NYSE was quiet. As the day wore on the tide shifted towards the NYSE as volume picked up while the NASDAQ volume drifted lower. Although volume was lower on the NASDAQ it was still a bit higher than Monday and Tuesday's volume showing buyers continued to step in. A very nice day for stocks as leaders kept pace as well as new leadership groups emerging.

We are heading into options expiry Friday while existing home sale data will be released. More often than not, odds are, volume will more than likely be skewed to the upside. Friday happens to be Day 5 of this rally attempt from Monday's global sell off and options expiry might skew the volume enough to where we could find ourselves following through confirming the rally attempt. The ideal situation would for the market to simply inch back to Monday's lows (a few weeks to do so) and begin another rally attempt. This would allow our leaders to set up in proper bases and not shoot up from 1-3 week bases. At any rate, we can dream of ideal conditions, but focusing on what is and going with the trend is the proper course of action. If we follow through tomorrow so be it and we'll take it from there.

Hard to imagine what a week does to stocks, but looking at a weekly chart we are back where we started last Friday. After Monday's hiccup stocks have been pushed higher; the NASDAQ flashing signs of accumulation. This market is ready to dish out blows that can come from any where and we better be ready for it.

Looking at secondary indicators in the market we can see New Highs aren't quite up to other bull market standards. This doesn't have me worried too much because there has only been 3 other occasions in the history of the stock market where stocks fell more than 60% across the board. Putting this rally into context with other great bear markets it is quite conceivable we'd see a lagging New Highs compared to more recent bull markets. Even the put/call ratio really isn't show extremes on either side which leads me to believe the market is finding equilibrium between sentiment. There is one story out there and that is the VIX's failure to keep above its 50dma. This may be an overlooked area but in 2003 the VIX had a terrible time with its 50dma as well. It continued its slide into the teens from well above 30. These areas are secondary to price and volume action and should be treated as such. No one indicator will ever take over price and volume.

Enjoy your Friday and make sure you cut your losses short.

top longs up TODAY w/ total returns since 1st buy: DAN 224% KONG 133% CAR 101% FIREE 115% ATSG 125% CAMP 86% TEN 82% CHBT 21% BZ 39%(79% EARLY) NAVI 23% LAD 47% VOCL 26% CISG 23% FUQI 36% RINO 20% GRRF 20% OMN 43% OPWV 26% IILG 25% OGXI 21% ACTG 56%

Late Day Support Kicks the NASDAQ into Positive Territory as Small Caps Take Charge

2009-08-05T11:59:00.001-10:00

Small caps continue their reign over larger cap stocks as small cap indicies notch very nice gains. Going against the common thought of a pull back stocks continued their march higher despite the majority calling for a pullback. Just about 2pm EDT stocks took a dive, as the NASDAQ headed back to the 2000 level. Buyers stepped up to the plate showing their support and as the late day surged grew so did volume. More importantly, leadership is strong and is showing the strength needed for this market to continue moving forward. In the face of the market needing a pull back it thrusted forward with leaders out in front.

Regardless of whether or not this market needs a pullback I immediately point to the leadership of this market. They will be the ones telling you the health of this market. At the moment, we are seeing big stock leadership taking over this market suggesting institutional cash is beginninig to flow steadily back into the market. Off the March lows we simply saw a junk-off-the-bottom rally where many shorts were being forced out of their positions due to extreme price action in many stocks. Whether or not the selling was "overdone" it sparked a fierce short-covering rally that is on its last legs. This is why it is extremely important for big stock leadership to emerge because without their leadership this market would wilt and roll over.

At this point, if we begin to roll over or go higher I welcome any move the market decides to make here. The market and leading stocks will guide me through the waters of this market. At the moment, it simply appears the fat is being trimmed off and the true leadership is beginning to emerge from the bottom. It won't be long before many of these leaders will show tremendous strides and possibly turn into Monster Stocks. While this may not be a perfect bull market it is certainly a bull market that is trying to shed its excess fat. We'll be on the stocks that are making their moves.

There is no need to get cute with this market, trying to plow into stocks that are extended or short stocks anticipating a turn is downright dangerous. Carefully planned execution and picking the right spots to get long is what is warranted. I do believe this market will continue on its upward path before seeing any type of major correction. Since 7/8 Day 1 of this most recent rally attempt the market has yet to see any distribution yet it has seen more than a few accumulation days. It is this type of action that indicates to me this market will continue its upward trend.

Always remember to cut your losses, you never want losses to take out your trading capital.

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It Sure Is Nice To See The Market Take A Breather On Mixed Volume; Pullbacks Create Proper And Beautiful Bases

2009-07-29T21:54:00.001-10:00

The SP-500 and the Nasdaq both pulled back today but volume was heavier on the SP-500. While that might seem bearish, and technically it is a distro day again, to the trained eye is actually another bullish intraday session.

Once again, the SP500 pulled back intraday only to reverse off the lows putting in a very respectable bullish close. This happened yesterday and it happened again today and before today and yesterday it has happened almost EVERY single day of the rally since this most recent move higher began on 7/8. Every day you can see a bullish intraday reversal.

While this is very bullish to see in a market, it is only really bullish if you are already fully long. It also matters what you are long. Right now, we still do not have ANY "PERFECT" charts to which I can put anywhere from 10% to 25% in one position. Right now, I continue to deal with speculative stocks that are either coming from short bases or bases far away from the 50 DMA. I don't mind buying bases off the 50 DMA but I sure do want to see nice big long bases.

One of my best stocks so far in this uptrend in terms of "perfection" was RINO. On 7/13 and on 7/16 I bought RINO and the second buy came with max-green BOP the whole way in the previous uptrend, in the base, and on the breakout, along with huge volume and excellent price action--plus it was from China and not the USA; a big positive when investing (isn't that sad to say, Americans). Anyways, the stock only put in an 11-day base before breaking out on 7/16. That is only two weeks and one day, everyone. The best stocks, if you go back and study my best-of-the-best past-big-winners almost all come from bases over three weeks long (most are around four-five) and/or come with price coming right off the 50 DMA. So before we see any HUGE 500% gains in 3 to 6 months kind of returns, we are going to have to see some longer/nicer bases.

Still, overall, am I going to complain about this market, after the 2008 we just had? Absolutely not. What I am doing is telling the truth. For me to "load-up" on stocks to my full margin and OPM accounts I am going to need to see better charts. Now, I hear people say (including me) that the 2008 market was so much worse than the 2002 market (obviously, since it was really only the Nassy that got trashed) market that bases are going to be uglier. That is fine but that just means that I will be risking my "I can invest this without worry" money in them. Until they make another round of bases (and if they don't that is just tough luck on my part), I can not risk OPM or my IRA money into the two-week bases or two-day bases that are making stocks move 40% in 8 days. Sorry, I can't do it.

I can play with my safe, fun money in stocks right now. Especially charts that have corporations in CHINA. If they breakout and are from China I am all over them. One of my recent large longs was CGA. 7/15 I loaded up on it. Then on 7/21 it breaks down on strong volume hitting me with a 6% loss. Three days later it was moving up 17% in one day and now is up 32% in the past four days. That is my luck everyone. However, had it not broken down, I would have done very very well based on one fact alone. It was from China. If a stock breaks out from a great base and has a wonderful chart pattern with strong fundamentals, I might or might not buy a lot of it. One way to guarantee I will: if it says it is from China. Sadly, fakeouts and breakdown re-breakouts are a part of the game and I will have to live with them. Sometimes you get faked out: CGA. Sometimes you hit it just right: RINO. Sometimes you don't have any "perfect" charts and must stay patient: now.

I have a feeling as long as the NYSE, SP500, Nasdaq, and IBD indexes act the way they do as they pullback, we can have quite a few very beautiful chart patterns to pick from and possibly finally find our "perfect" patterns that has helped me invest in some very nice winners that allowed me a very nice life in NYC and Maui from 1999-early 2007. Since then, it has been a fight. I had one subscriber make 100% shorting the same stocks I was shorting in 2008. However, I didn't return 100%. Everyone is different. Don't beat yourself up too much if you are not making money or even losing money in this market. I still am not killing it. Will I eventually? You bet your buns I will. However, I can't predict that will be. I can tell you when it will happen. When the charts start making you drool. There aren't too many that are doing that right now. So for now, I will try to make as much money as I can, while I wait for the perfect moment to setup so that I can "get rich again."

I tell you what it sure isn't cheap living on Maui, in today's economic times. It makes a whole lot of sense to move and that is what I will be doing soon. So if any of you refer to me as MauiTrader or whatever moniker I was given, start getting used to saying TexasTrader because that is where hopefully I will be at this time next year. Any of you Texas residents want to start an investing club or would like me to give seminars, I am 100% committed to being a member of the community. This is my final year on Maui. Sorry Hawaii. You are taxing me out. Aloha! I will make sure when I move that I have internet connectivity available immediately so I will not miss a beat. It is a year away but I think it is appropriate to let everyone know now. I am leaving Maui. This is my final year away from the Mainland. I put in a great 10 years here and maybe I will be back but for now I sure would like to settle, start my fund, and get a serious work environment setup so that I can help even more people become financially independent or more secure.

I'll see you tomorrow. Aloha and let's pray this market continues to stair-step higher. This Nasdaq pattern is beautiful. Now all we need is one base longer than 10 days or so. At least two FULL weeks would be nice right about now. Viva la uptrend! :)

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SUBSCRIBERS YOU CAN VIEW THE FULL SIZE ON THE GOLD FORUMS

Another Very Mellow Intraday Session Ends With Indexes Mixed On Higher Volume; Volume Continues To Be Below Average To Average

2009-07-28T19:05:00.001-10:00

I tell you what when the market doesn't move much intraday for a long period of time it sure does get more difficult to decide what you want to talk about. However, I really don't think that there is much you can talk about except for one thing: for a market moving up in such a slow steady fashion, nothing is steady about this market. First case in point you can refer to USU and the second case in point you can refer to UTA.

First off, USU got crushed, for a good reason. However, in a bull market you normally don't see these type of destructive reactions and see them so often. Remember ADY over two weeks ago or how about COT or ITLN yesterday. This action along with USU sure does make it hard to believe I am in a bull market. Do you think I saw this in 1999, 2003, or really anytime from 2004-2007 (early 2007 as around mid-year the fakeout breakouts started showing up)? If you said no, you are right. This was not normal. In fact it is not normal to have rallies with this many DISASTERS and you can be sure that is what these are disasters. Luckily, for once, for me, I have not been hit by any disasters that crush my accounts. Instead I continue to find my way into mediocre picks that don't do much (at least it makes me money) but at least keep me from having a heart attack.

While all of this goes on, I am out there with my eye on some possible beautiful buys. The problem is though, historically, you must wait for a base, setup, and breakout. Well right now we don't get a base or setup. We just get breakouts. Case in point with UTA. UTA is a stock that I have been watching since it made its way to the Nasdaq. Shortly after being listed it started rising on strong volume with green BOP. In June after the initial rally it pulled back on lower volume to beautiful support that then saw it take off 38% in 3 days on strong volume. This got my eyes on it hard. Now I want to buy the breakout. As I watch it base all looks well until 7/20. On 7/20 the stock decides to make the right side of its base all in ONE DAY. While it did not complete the right side, it was still up over 19%, putting it in a position of extreme overbought. What followed was very well received by me as it went sideways for five days. Sadly during those five days it did have two heavier volume reversals that sent BOP back to yellow. However, before the fifth day hit it was back to green BOP. Basically, the base was looking good. Then all of a sudden today the darn stock shoots up over 20% in one day. If you were following the stock intraday, you more than likely were able to buy near the pivot and now have a wonderful little gain in a HOT stock. However, if you are like me and unable to watch intraday you are now sad that your breakout went too far too fast. Welcome to our new stock market of 2009!

Never fear though, everyone, I do have a plan to get myself long before it is too late but it must do one of two things. It must either now reset up in a nice base on base pattern with this next base coming on green BOP and quiet volume the entire way or I would LOVE to see a low volume pullback to near the 12.50-12.75 area. If it can pullback to that area on lower volume, keep its BOP max-green or even just green, and then bounce off that area on strong volume, I wouldn't mind getting long heavy at all. So at least I have a plan to get that stock if it wants me to have it. If it doesn't pullback or if it doesn't setup in another base well then I will just have to say congratulations to everyone. I will get the next one.

I tell you what, though, this sure is one of the FIRST UPTRENDS I have EVER seen without any green to max-green BOP filled bases on lower volume with flat tight price action that led to breakouts on strong volume with max-green BOP, the good news is that some money is still able to be made. Especially on some of the more random stocks like AVNR, ISTA, CHLN, or SCLN. If you are not making some money, you are not cutting your losses fast enough. This market should be able to offer everyone a chance to make at least a little bit of money as long as you are fast at killing what doesn't work and move on to what does. At the same time, if you still are not making money, DO NOT BEAT YOURSELF UP. Like I just said I have not seen an uptrend that has lasted longer than a few months go this long without building any green to max-green BOP filled gems that come with a high-quality stock in regards to EPS/sales. So don't beat yourself up. Trust me, if this was 2003, you would all have a gain of 500%. However, some of you might have gains of 200%. Would you still be pissed off at some one else for having a 700% return. I hope not. Some will be up 100% since March and more will be up 20%. In 1999 some were up 1,000% and some were up 200%. No matter what it is some people will never be happy. So don't waste too much of your time being mad at the "CRAZY!!!!" market. Who would have known a POS-type stock like AVNR would rock a stock like ARST.

Not a lot makes sense which is why cash is still one of my best friends. When the TASR and EPIC charts of 2003 are ready for me, you KNOW I will be there!

FREE YouTube video to teach you how to read the market CORRECTLY:

Constant Below Average Volume Gains Are Leading To Some Winners To Crash Hard (ie...COT); The Leading IBD Indexes Pullback, Hinting At A Tired Market

2009-07-27T20:50:00.000-10:00

FREE YouTube Video to teach you how to interpret the market CORRECTLY:

FULL COMMENTARY WILL COME AFTER I COMPLETE MY SCANS FOR THE LIST OF NEW LONGS/SHORTS. I WANTED TO LET GOLD AND PLATINUM SUBSCRIBERS KNOW THAT THE FULL SIZE VIDEO ONE IS AVAILABLE ON THE GOLD FORUMS. IT IS A MUST WATCH SO THAT YOU CAN SEE THE DIFFERENCE BETWEEN MAKING MONEY AND NOT MAKING MONEY RIGHT NOW IS NOTHING BUT LUCK. SKILL AND PROPER ANALYSIS OF THE BEST STOCKS WITH THE BEST PATTERNS WILL NOT GUARANTEE LARGE GAINS RIGHT NOW. BASICALLY A LOT OF LUCK IS THE ONLY WAY YOU ARE GOING TO BE HITTING IT OUT OF THE PARK. THE ONLY OTHER WAY I CAN SEE TO MAKE BIG MONEY RIGHT NOW IS TO FOLLOW THE STOCKS I PUT ON MY WATCHLIST INTRADAY AND BUY THEM ON THE BREAKOUTS WITH STRONG VOLUME. I HAVE STUDIED SOME OF MY SELECTIONS WHERE THEY FLY INTRADAY AND NOTICE THAT SINCE SO MANY OF MY LONGS HAVE A HABIT OF GOING UP 20% BY THE EOD BUT BEFORE THE CLOSING BELL YOU CAN BUY THEM AROUND A SAFE 5-10% MOVE PAST THE PIVOT. SO IF YOU CAN WATCH SOME OF MY BEST PICKS ALL-DAY INTRADAY I RECOMMEND DOING THAT AND GETTING LONG THE STOCKS THAT BREAKOUT ON LARGE VOLUME WITH BEAUTIFUL GREEN TO MAX-GREEN BOP.

FULL COMMENTARY COMING UP. MAKE SURE TO WATCH VIDEO ONE NOW GOLD AND PLATINUM SUBSCRIBERS. THERE IS SOME IMPORTANT STUFF IN THERE.

The Second Quarter Ends with a Thud as Indexes Notch a Day of Distribution

2009-06-30T20:23:00.000-10:00

The second quarter ended in bleak fashion as institutional investors were busy selling holdings. A drop in consumer confidence didn't help stocks as higher oil prices and economic uncertainity were major factors for the drop. There wasn't many places to hide on Tuesday, except for leading stocks. The NYSE indexes suffered heavy volume selling throughout much of the day only to see late day support. Over on the NASDAQ volume was subdued for much of the day until the last 5 minutes when a rush of volume hit the NASDAQ. Quarter end window dressing was nowhere to be found on Tuesday. With the quarter end behind the market and earnings season upon us it'll be important to see the market see some accumulation.

As it stands now the Dow Jones Industrial average is leading the way with 5 distribution days. Although 5 is a high number the Dow is a lagging index and its distribution days are minor not major ones. The S&P 500 has seen 4 distribution days but like the Dow its distribution days are minor. What I am focused on is the leading index which happens to be the NASDAQ and it only has 2 days worth of distribution. Remember, it is quite normal to see distribution show its face when the market has made an uptrend. We'll need to see the big institutional players step up and begin operating on the long side buying up quality growth stocks.

A positive market internal today was the advancers versus the decliners. One would assume the number of decliners would have outpaced the number advancers Tuesday, but this simply wasn't the case. The market actually saw the number of advancers edge out decliners. Not typical action of a major distribution day. In addition the number of New Highs versus New Lows continue to be very positive. The ratio was nearly 10 to 1, hardly the bearish action you'd expect. Adding to the positive internals was the put/call ratio jumped over 1.07 showing fear crept back into the market. Fear is always a necessity when keeping an uptrend intact. Market internals certainly dampen the distribution seen in the market today and tells us strength still lives.

As the third quarter begins it will be interesting to see how the market will react. More importantly, July 1st will set the tone for the market for the coming weeks. A few questions will be answered and the biggest one will be if the "big boy" institutional players will step up and accumulate stocks or will they continue to sit on the sidelines? After tomorrow we can assume Wall Street will take an early start to the holiday weekend kicking of festivities early. Until then, make sure you reign in your laggards by cutting losses short and keeping strength. Keep positive and stay focused!

"The point is not so much to buy as cheap as possible or go short at top price, but to buy or sell at the right time." - Jesse Livermore

my personal top longs the past three months UP TODAY: VOCL 133% PARD 74% ACTG 46% CRAY 63% VVTV 52% SIGA 58% DDRX 28% CHLN 85% PALM 76% SPPI 41% GOK 48%

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Volume Slips Across the Board as the NASDAQ and S&P 500 End Higher

2009-06-24T21:05:00.001-10:00

The market shrugged off news from the FOMC meeting as well as the 5 year Treasury auction today. However, the big institutional money stayed on the sidelines as volume slid from Tuesday's action. Ben Bernanke and the FOMC decided to "do nothing," favoring the status quo over "change." Initial reaction from the market was negative but it did find its footing. There were a few tense moments where the market did look like it was about to crater, but support came to the rescue. Lacking volume, this market continues to look more on the weak side than the strong side.

Big stock leadership did not overwhelm the market with great price and volume action today. Although, some leadership did recover at key moving averages. They were few and far between, but still there. What is concerning is the lack of conviction on upside moves these big stocks have. Today we saw far too many big stock leaders move higher in price but in lower trade. This type of action is letting us know there isn't conviction to the upside and the path of least resistance for these stocks is beginning to turn lower. The big stocks are very good indicators of what is to come for the market and if they decide to run lower our market swill follow their lead.

Once again the market will be paying attention to the 7 year auction to be held Thursday. This time the attention might not be as keen as it was with the two year auction held on Tuesday. Traders are now conditioned to think the 7 year auction will go off without a hitch as the two year and 5 year notes were successful auctions. Although it will be interesting to watch the market reaction, it is nothing we are going to be basing buy and sell decisions off of.

The lack of big stock leadership and the low volume on the exchanges has me quite worried what we are about to run into. From the March lows to our most recent high in the June the NASDAQ has run almost 50% without any pull back whatsoever. The Shanghai index from its late October '08 low to its most recent high in June the index has run 76%. However, in mid-February to the first week in March the index corrected nearly 18%. For a few weeks that pullback has allowed the index continue its uptrend. It is about time we have our market take a break to allow this uptrend to continue its march higher. Unfortunately, it well remain unseen and we'll need our big stock leadership to start gaining more support.

While this market continue to be under pressure it is wise to err on the side of caution rather than try to be a stock market hero. Keep positive and your losses small.

top longs/(shorts) with total returns making me money TODAY: AVNR 103% CAST 48% ACTG 32% COOL 36% ANV 37% SNIC 42% VVITV 87% TRIB 22% VVTV 42% PWAV 76% KAD 56% TXIC 51% STEC 206% WPRT 45% VIT 79% MTMC 207%

FREE Youtube video to help teach you how to read the market CORRECTLY:

Commodities and Technology Crumble Weakening Leadership and the Overall Market

2009-06-22T22:05:00.000-10:00

By Market Speculator

Once again Crude Oil took a major blow Monday as well as other commodity prices. The IMF revised its growth causing panic in the World Recovery thesis. Technology stocks also took a tumble Monday as investors were fleeing technology names. Stocks were simply sold today as sellers wanted to cut loose at all costs. Closing at the lows of the day is a signal that sellers are in full control. Leadership has been showing weakness for the past two weaks and is finally beginning to weaken further at an alarming rate. Very nasty action today on the indexes as the market is now in correction mode.

Big stock leadership is always a great barometer for the market. Big insitutional players love the liquidity and low beta these stocks have. The price and volume action of these stocks are very important because it displays the mentality of the big institutional player. We have seen the big stock leadership crack a bit last week but that crack widen today. Two big stocks that have performed well in this market uptrend put in very ugly days. Gold and Platinum subscribers are aware of the ones I am referring to as I posted in our forums about the stocks. This is not that time to be fighting the market trend here, do not be a hero.

Big news this week as far as news is concerned. Most notably is the $104Bn Treasury auction set this week with a 2 year Treasury auction set to start tomorrow. Stocks wil be eyeing these auctions very carefully as they will signal the whether or not buyers have confidence in the United States Treasury. In addition to the Treasury auction is the Federal Reserve rate decision set to close on Wednesday. Many expect them to keep rates as is but it will be the wording of their statement that will be scrutinized. It is a given the market will react to news events this week. At this point, the market is signaling CAUTION ahead.

Leading stocks are simply worn out and have begun to roll over. On Friday, many leading stocks held key moving averages but volume was very light on Friday. Although it wasn't a glaring "signal" they were headed for trouble, but it was a clue trouble might lay ahead. Seeing today's action, you can not ingore their action. They are not healthy whatsoever and we are certainly not going to argue with their price and volume action.

Tread carefully in this market as it is giving us caution signals. Keep your eye on the ball and your losses small.

top longs/(shorts) w/ total returns since purchase making me money TODAY: VOCL 44% TRIB 24% CRTX 23%///TSTR 30% KAD 49% (CYT 65%)

FREE YouTube video to help you interpret the daily market action correctly:

The Dow Jones Industrial Average Slips with Crude Oil While the NASDAQ Remains the Leading Index

2009-06-21T22:11:00.000-10:00

by Market Speculator

Friday saw a quadriple witching day pushing volume well above Thursday's level. The Dow Jones Industrial Average had slipped lower closing just short of a distribution day. Over on the NASDAQ, the composite index witness a day of accumulation. However, during the session the indexes were not able to hold the opening move. Sellers took over after the morning frenzy of option traders closing/rolling their positions. Only the NASDAQ was able to close above in its upper range for the day, but barely closing above its upper range. More importantly, leading stocks once again showed strength many of the leaders saw positive action. It is clear the NASDAQ is the leading major index and has positioned itself to continue it's move higher.

We are certainly seeing a lot of positive action in leading stocks. There is also very nice action in a few big cap stocks. Institutions love playing large liquid stocks and we are certainly seeing the accumulation by the big boys. At Big Wave Trading, we are saying on top of these leading stocks and taking advantage of the gains they are showing us. Leadership is the number one factor to take a look at when reviewing the entire market. They will light the path the market will take.

Highlighting a secondary indicator is the ratio of New Highs to New Lows. Only 5 new lows were hit on the NYSE and NASDAQ while 75 New Highs were hit. Although we aren't seeing a massive amount of new highs the ratio indicates there is much more positive action than negative.

Something else to highlight is the percentage of stocks over their 20dma, 50dma, and 200dma. On a short-term bases only 46% of stocks are over their 20dma compared to 59% a month ago. Again, at the moment there are 73% of stocks over their 50dma while 81% were a month ago. Short-term, it appears we have yet to reach a point where stocks are oversold and we have seen a nice pull back in stocks. Only the 200dma has more stocks over it now than a month ago: 72% versus 52%. Even these levels aren't near record levels like we saw in late 2007.

It certainly would be nice to get a few more weeks of sideways or basing action in the market. This will allow for leading stocks to continue to work on consolidating into tight patterns rather than forming wide, loose faulty bases. We have seen a few leading stocks breakdown from wide loose patterns causing many people to be pushed out of the stock. The more basing action we get from the indexes the more time it allows for leadership to continue to pound out sound tight price patterns.

Happy Father's Day to all the Dad's out there, we hope you enjoyed a great day with your family.

Keep positive and always remember to keep those losses short. At Big Wave Trading, we'll continue to enjoy the gains our stocks are showing us.

top longs w/ total returns since 1st buy making me money: TRIB 20% DPW 37% ISTA 78% ADAT 20% AVNR 97% FIRE 46% CAST 57% PALM 47% CRAY 39% CLRT 30% ATSG 67% ARST 34% INSM 32% PONE 26% COOL 37% RBY 61% ACTG 30% KONG 79% ANV 37% SIGA 36%///GOK 40% TXIC 63% ESIO 23% PWRD 74% WPRT 41% RAD 174% INSM 58% ATSG 27% PONE 37% TSTR 28% JADE 26% RODM 41% CFW 37% JOEZ 29% PWAV 88% PRC 41% WPCS 41% FREE 47% CYCC 26% TMR 25% EPEX 93%

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Volume Eases Across the Board as NYSE Indexes Ended Higher

2009-06-19T12:36:00.000-10:00

by Market Speculator

Thursday's stock market was quite a bore, even with the Philadelphia Fed reading came above the expected number. The reading showed contraction but far less than expected, suggesting things aren't as bad as they may appear. Stocks took notice and jumped higher, but could not hold the highs. From the highs stocks bounced around in lackluster fashion. News from the treasury market still isn't good the Treasury Department announced its largest ever auction. Bond prices fell as investors once again are fleeing the treasury market, not in fear of inflation but the massive amount of supply coming on the market. The market took little notice and continued its lackluster trade. Overall, the market was taking a breathier as options are set to expiry tomorrow.

On the positive side the NASDAQ was able to consolidate its gains from Wednesday's session. On the other hand the S&P 500 rose on lighter volume suggesting buying action on the index wasn't supported by institutional players. Remember, we need to see volume coming into stocks to show strength with a move higher. Without volume, the move quite possibly could turn out to be a headfake. Clearly the NASDAQ is much better behaved and the leading major index.

Leading stocks were largely untouched, displaying support at key moving averages. It is of the utmost importance we begin to see well rounded bases with proper accumulation. At the moment there are plenty of choppy bases without sound price patterns indicating we are in a choppy market. We could remain in a choppy market for awhile, but it'll be leading stocks giving us the signals whether or not the choppy action has ended. Remember, tight price action is ALWAYS an indication of strength and you should be paying attention.

Tomorrow's option expiration day can always add an element of surprise. Volume can either be normal, like any other Friday or it can be quite large distorting the overall movement of the market. Usually, volume from options expiry shows up at the beginning of the day's trading session. We'll know from the start if volume is coming into the market via options or regular buying. Investors Business Daily compares hourly volume from the day before and is a great way to see where volume is coming into the market.

We are still charging forward with this market, taking what we can get from it. Keeping focused and positive we are able position ourselves in the right position to extract gains. Always remember to keep your losses small!

top longs w/ TOTAL returns since 1st buy making money TODAY: INSM 29% ISTA 78% CLRT 25% ACTG 20% ADAT 22% CAST 46% AVNR 71% SIGA 35% DPW 21%///CVGW 21% TXIC 55% PARD 41% GOK 32% PTN 66% STEC 206% JOEZ 29% PWAV 85% WPCS 41% CSIQ 46% VIT 72% EPEX 90% PMI 87% RAX 134% CFW 32% CKEC 51%

FREE!!! YouTube Video to teach you how to interpret the market CORRECTLY (FULL SIZE VERSION AVAILABLE TO SUBSCRIBERS ONLY AS A BONUS TO BEING A MEMBER TO BIGWAVETRADING.COM THE PREMIERE ONLINE INVESTMENT COMMUNITY FOR ACTIVE INVESTORS):

Stocks Take Another Dose of Distribution While Leaders Continue to Send Mixed Signals

2009-06-16T17:24:00.003-10:00

For the second straight day in a row stocks were hit again with another day of distribution. The selling wasn't as fierce as it could be as volume lagged behind Monday's level for much of the morning. When selling took over it was then volume began to pick up the pace to surpass Monday's level. Stock market leaders once again flashed mixed signals, but the more we see these leaders fall the more troublesome the market becomes. We did see two leading stocks perform well but there wasn't enough upside leading stocks to outweigh the damage being down on the flip side. Leading stocks and the price and volume action are telling us this market looks to be choppy in nature in the trading days ahead.

The sloppy price action going on in the stock market leaders is not positive. Tight price action is a signal of strength while sloppy price patterns are a signal of weakness. The past few trading sessions we have seen very sloppy price and volume action from our leading stocks. It began last Wednesday when we saw our leading stocks begin to fail key moving average areas. Now, we have yet to see support come into these stocks to make a stand and show that they have the strength to move higher. Unless support comes in soon the leaders that are standing may not be for long.

Back to back distribution days are never a health sign either. However, volume is still below the 50dma suggesting selling is tame for the moment. It starts with the price and volume action of the leaders then it moves onto the indexes. At the moment, we are seeing the actions of the leaders finally showing weakness in the indexes. Now the market is flashing large CAUTION signs at the moment. It is wise to be taking profits and cutting loose stocks that have wild price swings. As I stated above, choppy price action is a sign of weakness not strength. We have already seen with a few leaders what happens when a stock displays choppy price action.

If we do end up rolling over we'll be on top of getting into shorts. We still have some long signals but at the moment this market is mixed at best. Until we get decisive one way or another we won't be plunging to either side. Remember, continue to keep a positive attitude and make sure you keep your losses extremely small. It is also wise to reign in some of your positions to protect you from any further downside. Stay focused and nimble!

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Crude Oil and Precious Metals Lead the Market Lower as Volume Rises

2009-06-16T17:21:00.001-10:00

Sellers stepped up to the market's doorstep today as commodities took another hit. Crude oil and precious metals led the market lower as the US Dollar rallied. Volume increased from Friday's level but finished below its 50dma suggesting the selling was far from panic selling. More importantly many leaders were able to find support at key moving averages but a few were hit hard. The market did see a lift near the close but is was far from a strong close like we have seen in the past. Nonetheless, the day was not a positive day for the market but wasn't damaging enough to end this uptrend.

The market might be teetering on the brink of another decline, but it was positive to see many leaders find support at their moving averages. So long as these leaders hold these areas and do not continue to break down this uptrend will remain in tact. It is important that the market leaders stay afloat as it will be the tell of the market. Selling can not continue in the market leaders and it will be important that we pay attention to them. If we can see buying interest show up for the market leaders look for the rest of the market to follow through on the buying.

If you are carrying losses greater than 5% at the moment you must take a look at your purchases. Most likely you are getting in the game too late. It will be important for you to cut those losses fast as they can turn into MAJOR losses rather quickly. The number one way to protect yourself in a market moving sideways waiting to break in either direction is keeping your losses small. By doing so you'll keep your powder dry in the event the market moves higher and you can jump into the leading stocks.

We are in limbo as the market looks a bit tired, but at the same time all signs are not pointing down. There are pockets of light. It is the outmost importance that you maintain a positive attitude and a bright outlook for your future. As my mom and grandmother would tell me "postitive things happen to positive people." In a way it is a self-fulfilling prophecy. I am a firm believer in keeping a positive, can do attitude in the market to keep you afloat and in the game.

I am certainly in the "wait and see" mode as we can break either way. If the leaders are sold off once again, then we'll be waiting for another follow-through day to occur. On the flip side if the leaders get support it'll keep this most recent uptrend in tact. Regardless, we'll be on top of the market in either direction.

Remember to always keep your losses small and to keep a positive attitude. There is nothing more important than your emotional balance in the market. Otherwise you could lose your stake. Stay focused and positive!

top longs/(shorts) w/ TOTAL returns making me money on MON: SIGA 45% ATSG 63% ISTA 59% AVNR 61% CYCC 30% SOL 78% PONE 27% PTN 25% RODM 32% ALTU 73% ACAS 27% NAVI 47% GLUU 22% NAVI 47% ACAS 27% ALTU 73% SURG 35% (CYT 60%)

FREE YOUTUBE VIDEOS WILL BE POSTED AGAIN STARTING TODAY. I BELIEVE MY VIDEO TECHNICIAN ARRIVES TONIGHT FROM LAS VEGAS BACK HOME AND I CAN START GIVING YOU A SMALL VERSION OF VIDEO ONE AGAIN. SUBSCRIBERS YOU WILL CONTINUE TO GET FULL SIZE WITH OTHER VIDEOS IN REAL-TIME W/ NO PROBLEMS.

A Late Day Surge Lifts Stocks by the Close of the Day as Volume Indicates Wall Street Started the Weekend Early

2009-06-14T22:04:00.000-10:00

by Market Speculator

In front of the market was elections in Iran and new threats being made by North Korea. Despite this potential negative news stocks were able to get a lift at the end of the day by a flury of buying. Much of the day volume had been tapering off much below Thursday's level as stocks sank. Stocks didn't much selling pressure to drive down prices. Showing institutions weren't selling off their holdings in a hurry, a positive sign for this uptrend. On the downside, many leading stocks were hit hard throughout the day. The late day surge did cover up most of the damange done by the selling. Friday's market session was an indication a market which is showing signs of basing.

A few leading stocks suffered damage, a few of them were not able to hold their 10dma. During powerful uptrends leading stocks will often find support at their 10dma and continue their march higher. The action seen on Friday is a more of an indication we are not quite ready to see leading stocks continue their march higher. Not all leading stocks suffered, many of them did find support at their 10dma. The ones that did not did find support at their 21dma and 50dma. Positive signs were all around the market Friday but they were in the price and volume action of the leading stocks.

In John Boik's Monster Stocks he noted in his research that leading stocks in an uptrend will often find support at their 21dma and never fail. Once failures begin at the 21dma for market leaders it is a sign the market has nearly reached to the top of its run. Although we've seen some leading stocks take hits we have seen a majority find support at their 21dma.

Volume on the indexes as mostly dried up over the past two weeks. On the Russell 2000 volume dried up this week as the index found support and closed within 1% of last weeks close. Tight closes are a sign of strength and is very important to spot these to take note of the strength. The NASDAQ and S&P 500 closed within 1% of their prior weeks close. This is a clear sign of positive consolidation for the market and should be clearing the way for quality growth stocks to setup sound price patterns.

Keep positive and never give up. Cutting losses short will only keep you in the game longer and your powder dry for opportunties the market may present to you in the future.

top longs/(shorts) w/ TOTAL returns since 1st buy making money TODAY: PALM 54% LPSN 20% COOL 43% ABVT 27% ARST 40% AVNR 36% ASCA 20% INOD 23% CLRT 25% ADAT 27% (CYT 59%)

top longs for PLAT members w/ TOTAL returns since 1st...TODAY: GOK 57% XTIC 64% CHDX 40% SNIC 70% JADE 56% BAA 52% PONE 26% AHD 26% CKEC 69% IRE 109% WSCI 29% JOEZ 37% RODM 29% GIII 37% PWAV 101% WH 36% CDII 37% APL 83%

FREE YOUTUBE VIDEO: My video technician is in Las Vegas and therefore the FRI and MON video will not be posted to YouTube till TUE. Video 1, 2, 3, and 4 are available for Gold and Platinum members. If my video technician gets a chance to upload them, I will post them here. Subscribers nothing will change for you.

Sellers Jump in Late to Knock Down Stocks from Their Highs but Hold Gains

2009-06-12T03:44:00.001-10:00

By Market Speculator

Late day selling brought the indexes back to their lows of the day settling just above them. Retail sales figures spooked traders sending the retail sector lower. On the other side, crude oil rose to $73 as the commodity continued its trek higher. Mounting pressures from rising yields as well as higher energy costs weighed heavily on the market overall. Leading stocks did not participate in the move higher marking a second straight day of underperformance. Volume came in just above Wednesday's levels but was lower than its 50dma suggesting the past few sessions institutions have largely stayed on the sidelines. Taking a fifty thousand foot view of the market; we are still in an uptrend with not many distribution days and we should continue to see the uptrend hold.

The leading stocks took a step back on Thursday, taking a rest from recent gains. Although it would be ideal for the leading stocks to move higher every day it is simply impossible to do. At the moment, many of them sit above or on their 10dma an area of support. If the leading stocks can hold these moving averages it'll be a sign of strength and something we will continue to pay close attention to.

Every night I review leaders and all the market indexes. This gives me a great view of the market and putting the pieces together which are necessary to determine how the market is doing. Interestingly enough I have been paying close attention to the IBD indexes. The IBD 100 has been heading sideways for quite some time and has lagged the overall market. However, taking a step back you'll notice the awfully nice tight price action happening in the IBD 100. It appears as if the index itself is preparing for a move higher, above its 200dma no less. This is an area where I will be paying close attention to in the coming days to see whether or not these leading stock indexes can muster up the strength to penetrate the 200dma.

Having a sound game plan is always the best course of action and cutting your losses should be top priority in your game plan. It is an important tool to save your account from utter disaster and keeps you in the game.

Enjoy your weekend.

top longs w/ TOTAL returns since 1st buy making money TODAY: PALM 42% CRAY 35% ARST 36% CAST 43% ACTG 22% ANV 36% ISTA 58% ATSG 65% RAD 28% RBY 55% CLRT 25% THM 31% (CYT 56%)

top longs FOR PLAT MEMBERS ONLY w/ TOTAL returns...TODAY: CHDX 30% GOK 53% ENT 38% TEN 25% JADE 53% KAD 63% IPCS 65% PRC 52% WPCS 51% PTN 21% TMR 34% AHD 20% PXLW 38% WPRT 56% PONE 21% RAD 234%

FREE YouTubeVideo:

I rarely EVER take some time off but you know what? With as much money as my picks are making others, while I sit and try to figure out what I am doing wrong, I figure it is only fair for me to take some mental time off and just post items to my PLAT chat room, GOLD forums, and SILVER longs. The free stuff can be put on hold for a day. I'll be back with my regular postings on Friday. Thank you for letting me have sometime off of this VERY tiring market. I work too hard--way too hard!

Another Late Day Rally Lifts Stocks Off the Bottom but Notch a Distribution Day

2009-06-10T22:21:00.000-10:00

by Market Speculator

After gapping higher at the open sellers took over the market sending stocks lower throughout much of the day. Fueling selling was another hiccup in the Treasury Auction as yields once again moved higher. Fears over the credit quality of the United States and inflation is sending Treasury holders to demand higher yields. Crude oil didn't help matters as the commodity hit $71 a barrell. In the face of this bad news buyers stepped up late and turned into what would have been a major distribution day into a minor distribution day. Once again, we are seeing underlying strength even when it appears the market is about to break to the downside.

Taking a look at New Highs vs New Lows only 8 New Lows were made on the NYSE and NASDAQ. More than 116 New Highs were made during today's session. The only way to view this is in a positive light. Remember, ultimately two things are needed: price/volume and leadership. New Highs vs. New Lows are simply a secondary piece of information that we can use to analyze the market. However, it will never trump the importance of leadership and price/volume action.

Today our quality growth stocks failed to get the same lift as the overall market did. Although the overall market action was positive the action from leaders was not as good. By no means is this a serious flaw or we the "SELL ALL SIGNAL" should be set it is something that should be noted. We need quality growth stocks leading the market and today was a sign that we may still have a few kinks in the armor to work out.

We are 13 weeks into this confirmed market rally and have seen junk-off-the-bottom (jotb) stocks lead this market higher. I continue to reiterate the 1938 market because it is highly correlated to the current market. It took over 3 months for leadership to emerge as leadership for the 1938 summer rally. In terms of the 1938 rally we are just in the early part of what potentially could be a nice rally continuing.

Remember to keep your losses short and your eye on the ball.

top longs w/ TOTAL returns since purchase making money TODAY: CHLN 56% ISTA 58% KONG 85% ACTG 21% ANV 36% CYOU 22% FIRE 65% CAST 37% COOL 44% THM 22% RBY 41%

top speculative longs for PLAT members w/ TOTAL returns...TODAY: RAD 221% ANPI 190% PWAV 101% FCS 82% CMRG 77% CSUN 57% SNIC 67%(3 DAYS) GOK 48% KAD 61% JADE 44% PRC 37% TMR 22% RODM 38% CSIQ 50% SOL 49%

FREE YouTube Video to help you analyze the market CORRECTLY:

Ten Banks Repay TARP Funds as Quality Growth Stocks and the NASDAQ Take the Lead

2009-06-09T21:29:00.000-10:00

Quality growth stocks and the NASDAQ took over leadership today as volume rose on the NASDAQ but pulled back on the NYSE. Volume on the NASDAQ ran higher all day long showing the price action had institutional support. Even more important quality growth stocks emerged once again as leaders in the market. Over on the NYSE volume was tempered by the financials as ten banks are set to pay back TARP money. Reaction was mixed from the banks as it was mostly priced into the market. Overall, notch another positive day for the market.

It was very nice to see quality growth stocks stepup and take over leadership as we need these stocks continue to lead us higher. We have seen a few quality stocks that passed their pivot points on volume. Being able to spot these winners and get in them is what this game is all about. In addition, getting the leaders with size, meaning your position size is a substantial part of your portfolio. For example: if you put on a 1% position, in order for your portfolio to grow 1% that position needs to move 100%. However, having a 10% position to grow your portfolio by 1% all you need is a 10% gain. Remember, this will only work if you are cutting your losses short. By not doing so, you run the risk of completely destroying your trading capital. Position sizing is important when you are in a confirmed uptrend with quality growth stocks are at the helm.

Highlighting cutting your losses, every successful stock market operator always cut their losses short. Many pros often times will cut a position with only a 3% loss. I for one will use anywhere between 3% and 8% cut loss. It is the "art" of managing your portfolio. Factors such as how leading stocks are acting, the overall market, and how the position is acting all go into factoring where I will cut a stock loose. Remember, you are trading to make money, not lose it. The most important part regarding managing your portfolio is cutting your losses short and being prepared to get into a leader.

All positive action occuring in the market with quality growth stocks leading and positive ratios such as the NH vs NL. More importantly, we are seeing excellent opportunities to get long stocks that are the leaders and we are not missing out.

Keep your eye on the ball and stay nimble.

top longs w/ TOTAL returns making money TODAY: ORS 22% AVNR 54% CHLN 48% ISTA 51% SIGA 55% ANV 32% KONG 85% COOL 39% ADAT 25% ASCA 31% ABVT 31% PALM 34% CAST 30% CRAY 30% NAK 21% FIRE 44% ARST 36% NGD 27% CLRT 25% RBY 33%

top speculative longs off the bottom TOTAL returns making money TODAY: TELK 45% RODM 32% CSUN 37% CSIQ 48% IPCS 61% CFW 61% GRRF 87% PWAV 98% AHD 21% TXIC 26% SOL 43% VIT 35%

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Late Day Support as Stocks Pull Back for the Second Consecutive Day on Lighter Volume

2009-06-08T22:56:00.000-10:00

by Market Speculator

Wall Street was a ghost town as volume limped well below Friday's level all day long. As stocks opened lower selling took hold, but selling was well contained as stocks found support throughout the day. It was a bullish sign for the second straight day to clear overbought conditions that existed from last weeks run. Bulls took control at the end of the day pushing stocks near the highs of the day at the close. Once again showing the underlying strength in the market. Another great day of consolidation giving stocks time to digest the recent gains.

The level of New Highs continues to outpace New Lows, again underlining the strength of this market. Remember, we need to have the NH vs. NL ratio in our favor to get Monster Stocks. Monday saw 115 new highs while only 13 stocks made new lows. Quickly doing the math that is nearly a 10 to 1 ratio of NH vs. NL. An impressive ratio considering the market ended on the downside.

Leading stocks were somewhat mixed today lagging the overall market. Taking a look at most of the leaders they found support and closed in the upper range of the day. Typically, we want leaders to always lead and never lag the overall market. We'll be paying attention to these leaders as to how they will act in the coming days. It is quite obvious we'd like them to regain their composure and lead the market higher.

Interestingly enough small caps, who have been leading the major indexes over the past few trading sessions lagged the overall market just like leading stocks. Again, we'll need to keep an eye on how the Small Cap indexes perform making sure they do not continue to lag the overall market.

The stock market can be a viscious game to be played. Often times, though, it is the individual themselves who destroy their own accounts. Being able to adapt and evolve over time will allow you to stay in the game. William O'Neil and his portfolio managers learned this leason in 1999 when many internet stocks were flying high without earnings growth. In reality, they had the best price action without the earnings. Missing the run up in many of these internet stocks would have left you high and dry but not William O'Neil's portfolio managers. Being able to identify an edge in the market is one thing exploiting it is another.

There isn't much out there that is screaming we should be going lower. At this point, given what is in front of me this market should continue its uptrend. Distribution has tailed off and is non-existent at this point and we still have leadership. Until any of this changes, we'll continue the march onward and upward.

Stay focused and nimble.

The SP600 And Nasdaq Lead The Indexes Higher On Friday; Leading IBD Indexes Are Finally Leading The Overall Market

2009-06-07T23:13:00.000-10:00

I had a wonderful weekend enjoy this beautiful island of Maui. I don't plan on being here for too many more years and whenever weekends like this come along I AM going to enjoy them. To not would be damn foolish.

I work over 12 hours every day making sure that you are making the money you see below in our current longs and to do that I need my down time. This weekend, despite all the fun I had, I got all my work done for subscribers. However, those of you that come here to see what I have to say this weekend will only be greeted with this: it is a bull market you know. That is about all I can say that hasn't been said ad-naseum. Market Speculator has echoed my thoughts on this page all week and most of you are in tune with the market trends. That is great news.

However, if you continue to face problems in the stock market, then that means you are doing something wrong. If you are having problems making consistent money, do not have any set rules, and/or can not seem to hit any home runs, you are not alone. Many people have these issues but at BigWaveTrading.com the rules we advocate come directly from the rules that IBD has put out for everyone called CANSLIM. For those of us that know how to use this methodology the market has not been as difficult as the talking schmucks on TV make it sound.

The most important thing to remember is that they DO NOT have YOUR best interest in mind. The ONLY person who has YOUR best interest in mind is YOU. That means that if YOU DO NOT know how to make the big money on YOUR own in the stock market you can pretty much guarantee NOBODY is going to make it for YOU. I am a big advocate of running your own money. The only time you should not is if you have NO TIME AT ALL. If you have time, you should be running YOUR OWN money no matter how much you don't like it.

The world has changed and Americas best days are behind it thanks to the decline in morals, the entitlement society, and the get-even way of life where everything must be "fair" for everyone. This is very close to COMPLETELY KILLING the entrepreneurial spirit of America. The good news for those of us with some money is that we can get the hell out of here and move to Asia where those nations are EMBRACING those that can create wealth for their societies. Countries like China realize that the rich create jobs for the poor and help give the poor a higher quality of life. I don't know what the HELL HAS HAPPENED with the country I am from but I am darn near close to writing this country off. Unless we turn around I don't see how we are EVER going to have a NON-inflationary rally where real wealth is created instead of printed paper money.

I am bullish right now because I follow trends. However, even though I am bullish on the market for now I still have some key questions. Why are my CANSLIM stocks not setting up in quieter bases? Why do I STILL!! not have any "perfect/hot" setups in my speculative longs like I have in EVERY MEANINGFUL rally I have EVER been a part of? These are very important questions because without another round of breakouts after a consolidation pattern, I am pretty sure I am not going to get my "perfect/hot" setups. Truth is when they don't show up the rallies don't last long. I am very skeptical a real bottom has shown up.

Don't forget also that just because the 50 DMA has crossed above the 200 DMA on the Nasdaq that the all-is-clear signal has sounded. Instead, the 50 must cross an UPTRENDING 200 DMA for it to be automatically bullish. Since that is not the case now with the 200, we will need to see prices move along, pullback to the 50 dma, and then have prices rally again. This should then put the 200 DMA into an uptrend and if the market pulls back and test that line then AND ONLY THEN will we be in a TRUE bull market. Without my "perfect/hot" setups and the overall market indexes in the proper pattern with the moving averages, there is simply no reason to think that this is nothing but a bear market rally.

What also makes me think this is a bear market rally? The idiots at the government keep saying the "turn has come." Really assholes? Really? You are the same MORONS that missed the whole 2008 collapse. The last time I checked not one damn analyst expected the market to be higher. Yeah, sure, I trust you guys now! Sure!

Nah, instead, I think I'll take my chances with my charts. As you can see below they appear to be working and that is a good thing. The problem is that unless I focus on CANSLIM longs only, it is really a crap-shoot and it is difficult to guess which long is going to go up near 100% in a short amount of time. It used to be easy to tell based on the "hotness" of the chart. But nowadays I can't find any "hot/perfect' charts so a lot of stocks are making moves that simply have no pattern to them. Sometimes really nice chart patterns work, sometimes they do not. Then sometimes ugly breakouts work and then they don't.

I still honestly believe that this is the hardest market environment ever and this is coming based on past experience. If this was a real bottom, I am pretty sure I would be holding a few longs up over 100% and more than likely one or two of those kind of stocks would have perfect chart patterns. Right now, it seems like fantasy, that these stocks will ever show up again. As you can see in my 'past big winners' they showed up EVERY YEAR in multiple places over-and-over in bull market trends. Then, even in some bear markets, you could find a few. Those hot chart patterns just don't show up anymore, for now. I have a big feeling this is due to the quality of market participants involved in the year 2009 compared to the market participants that were involved in 1996.

Things have changed and change is HORRIBLE! This "change" has led to a very choppy, wild, and to be honest not that much fun of a market environment. I am used to making HUGE gains on hot charts and that used to be a lot of fun. Now I find I have to work my ass off just to barely beat the market. To do that I have to focus on CANSLIM stocks. While nothing is wrong with that, it was the CANSLIM stocks mixed with the "HOTTIES" like LMLP in 99 or HIL in 03 that really allowed me those huge gains of the past. Without that speculative splender I just don't know if we are going to see those kind of gains ever again IN THIS COUNTRY.

I am pretty sure my future lies somewhere in China. Take a look at this chart and see if that doesn't sound like a BRILLIANT idea. Remember everyone, for those of you who "poo-poo" history that no matter what you want to "feel" or "believe" in the truth is that ENTITLEMENT SOCIETIES DIE DIE DIE DIE DIE! WAKE UP AMERICA. YOU ARE ALMOST DEAD!!

PS: Don't mistake INFLATION or HYPER-INFLATION with a new bull market. Did you see Zimbabwe's stock market the past five years? You should see how amazing it did!!!! Do you think that stock market rally was good or bad for the country? Do you see how a rising stock market is bad when it is on the back of EVIL inflation that is controlled by our government? I sure hope you do. We need more people to wake the hell up to what we are trying to create in the name of "fairness." Fairness gives you Zimbabwe. Once again I ask you if the rally in Zimbabwe was "awesome" or if it was a tell to how sad and depressing this once great African nation has become. Is this what we want?

The Zimbabwe Stock Exchange (the ZSE) is the best performing stock exchange in the world, the key Zimbabwe Industrials Index up some 595% since the beginning of the year and 12,000% over twelve months. And yet, the country is crumbling (4/10/07). Ever since President Mugabe's disastrous land-reform campaign (an entire article in itself), the country's farming, tourism, and gold sectors have collapsed. Unemployment is said to be near 80%.

God! Isn't socialism wonderful. :( :( :(

I don't think so. Sometimes a rising stock market is NOT bullish and is instead telling "look out the S is about to hit the fan on the inflation front." It makes me wonder if that is the kind of rally we are in now. It appears that if it wasn't I would be making more money and more "perfect" charts would be stetting up and breaking out from pattern that I have been accustomed to that produces huge gains. Maybe this next consolidation phase the market is under will unleash it.

A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years.

Great nations rise and fall. The people go from bondage to spiritual truth, to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency, from complacency to apathy, from apathy to dependence, from dependence back again to bondage.

top longs with total returns since 1st purchase making money TODAY: KONG 85% ATSG 73% SIGA 55% COOL 40% RAD 42% ARST 37% CAST 28% ADAT 26% CRAY 26% AVNR 22%

top longs with total returns since 1st purchase from the PLATINUM Forums making money TODAY: RAD 270% GRRF 85% CMRG 86% CSIQ73% CFW 74% IPCS 61% WPCS 48% TELK 48% KAD 38% JADE 30% VSR 38% CSUN 20% ENT 21%

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FULL SIZE PART ONE, TWO, THREE, AND FOUR ARE ALL AVAILABLE IN THE GOLD FORUMS.

Pushing Aside Dismal Economic News Stocks Advance in Higher Volume

2009-06-05T01:15:00.000-10:00

Thursday's morning release of economic news did not show signs of a recovery for the US economy. This didn't stop stocks from getting support. It wasn't long after mid-morning stocks began to show signs of life. Volume on the NASDAQ ran hot throughout the day while NYSE volume was running a bit behind. A late day move in stocks helped stocks close out on the highs of the day. The bullish move at the end of the day highlighted the bullish nature of this market.

Leading stocks kept pace with the NASDAQ, but it was Small Cap stocks that took the lead. It is important to see leading stocks ahead of the major indexes. From a historical perspective, Small Cap stocks always lead the market. At the moment, Small Caps and Leading stocks are taking over leadership.

The crowd got bullish again with the AAIIBull index topped 46% while the AAIIBear index slid to 38%. A few weeks back AAII published a note stating 45% of those who were surveyed were not invested in equities. The highest amount EVER recorded by the AAII. Are those investors not invested in the market willing to come back in? This most recent rally will certainly have those not in the market itching to get back in. In addition, will equity funds see inflows from investors to put to work in the equity market? Big questions have yet to be answered but by the price and volume action of this market it appears they are putting cash to work.

Do not get caught up in the "why," why are we moving higher? Does it matter or does that we are moving higher that matters? Too often many investors are caught up in the "why" rather than taking action. All the time spent on the "why" will leave you without the time to study and find the stocks that are moving this rally. One of my favorite expressions: "it is what it is" plays nicely here. Remember, you can only control your own actions and not action of others. Focus on what is important, control your own actions and forget the "why" to CNBC.

Tomorrow morning we have the long awaited May Jobs report from the US government. The first Friday of every month is always a delight for CNBC as they bring in expert guests to talk about a number that no one can predict. Anything near or higher than -500k jobs lost will surely spark the bulls interest and bid up stocks. Especially retail stocks as they weighed down the market today. Any sign of further weakness in jobs lost we might see stocks ticker lower. More importantly it'll be how the entire week wraps up on the close Friday. It isn't until then can we make a rational thesis from the day.

Remember, always keep those losses small and come aboard to Big Wave Trading if you aren't already a member.

Enjoy your weekends and be safe.

top longs/(shorts) w/ FULL returns since purchase making $ TODAY: KONG 85% ATSG 69% PALM 44% ISTA 40% SIGA 52% CAST 28% CFL 20% CLRT 24% AVNR 21% RBY 33% ADAT 23% CRAY 21% ANV 30% RAD 36%

top speculative longs off the lows for PLATINUM members: GRRF 82% CSIQ 72% IPCS 60% GOK 68% ETWC 42% RUS 51% TMR 34% GRO 25% OSCI 38% PXLW 35% WPCS 46% RODM 31% CFW 33% TELK 39% BAA 29%

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A Late Day Surge Off the Lows Paints the Day Bullish as Stocks Pull Back in Lighter Trade

2009-06-03T22:06:00.000-10:00

By Market Speculator

Taking a breathier, stocks pulled backas the market digests the most recent move. Stocks did touch overbought conditions and it didn't come as a surrpise the market put in a day of consolidation. During the last 30 minutes of trading stocks found a bid and moved off the lows near the opening levels. A move like this shows institutions stepped in late in the day to support their stocks. Again, it was an important sign to see the support come into the market as the day wrapped up. The market action is showcasing that the bulls are in charge and ready to continue the uptrend.

Leading stocks held up quite nicely today as many of them fell back on lighter trade. It is important to see leading stocks hold up when the overall market pulls back. This is another sign of strength when you have leading stocks pulling back but not leading the market to the downside. It will be important for this type of action to continue; support for the leaders must remain for this uptrend to have legs.

In economic news, we have the May jobs report due out Friday morning at 8:30amEST. Today the ADP report showed more than 500k jobs were lost in the month of May. CNBC once again will have breaking news on the subject, but this rally isn't being fueled by an economic recovery. This rally is simply built upon the printin of greenbacs by Big Ben Bernanke and the Federal Reserve. Simply pumping money into the system will do little to create any sort of recovery as the money is being funneled into non-functional assets. If the money was beeing spent on performing assets we'd have a diffeerent ball game.

Pointing out the New High vs. New Low raio again the market saw only 6 new lows today. Six new lows on a day where the market pulled back quite substantially and the market only saw 6 new lows. This is extremely helpful to see this as it means even when the market sells off we aren't seeing it as weakness. The moves lower are looking stronger and more constructive. Rather than blasting to to new lows we are really seeing some strength. There were 104 New Highs made today, a very positive sign for this market.

We continue to make great gains in this market and will continue to do so. If you aren't already a member of Big Wave Trading, why aren't you? While you wait, we'll continue to load up on our winners.

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Holding Gains Stocks End Higher as Leading and Small Cap Stocks Lead the Way Higher

2009-06-03T00:55:00.000-10:00

by Market Speculator

Once again stocks stage another bullish trading session. It was important that stocks did not reverse course and give up a sizeable amount of gains from Monday and prior Friday's sessions. Even more important is that we have leading stocks taking center stage and the reigns from junk off the bottom stocks. Intraday action was not volitile as we have seen it from last week. Much of the day we spent in higher ground and avoided any nasty sell off heading into the close. All around a positive day for the market and signs we are poised to continue to march higher.

We have plenty of members in the chat room who are taking advantage of this market. As we begin to rotate into quality growth stocks they will offer up the ability to get long in a big way. Are we there yet? Not quite, but we might be closer than many believe we are. Big Wave Trading members will certainly be taking advantage of the opportunities these quality growht stocks may provide.

Aside from positive price and volume action the number of New Highs vs. New Lows. Remember, for Monster Stocks to show up we need a positive NH vs NL ratio. Today, 162 new highs were made while only 26 new lows were hit. Removing the New Lows from the AMEX only 5 new lows were hit, a very positive sign indeed. Keeping in mind the massive bear market we witnessed it took quite awhile for New Highs to really start pounding on New lows. Not too mention during the 1938 rally it took over 3 months for sound leadership to take hold from the bottom. We may be entering into a sweet spot in this rally.

The most important aspect of this uptrend is that we have the IBD indexes leading for the second day in row. Of course, it will take much more than two days but nonetheless we need the IBD indexes to lead. We are no almost 3 months into this rally and we are beginning to see signs of leadership. Reviewing the 1938 market rally there was an excellent opportunity to make money. Strike while the iron is hot because if we follow the 1938 market it took another 3 1/2 years to find another bull market. We shall see but the market in front of us might yield us an excellent opportunity.

As always, remember to keep your losses short and never let them to have the chance to grow.

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Following Through on Friday's Gains Stocks Stage Another Rally on Strong Volume

2009-06-01T22:59:00.000-10:00

by Market Speculator

From the opening bell to the close stocks were being accumulated in a big way. Volume once again soared showing institutional support is behind stocks. We even saw quality growth stocks bust out and show tremendous strength. It was very important for the stock market to follow through with very nice gains after Friday's close. The action from stocks today is showing there is more room to run to the upside. Leaders have emerged to show quality is where the action will be at and the time is now to get on board with them. Leadership has taken hold and the overall price and volume action of the market is signalling this market wants to roll higher.

An important occurance happened today and that was the price and volume action following through from Friday's gains. It would have been terrible for stocks to roll over and essentially would have signaled the market wasn't going to move higher. Although we could have moved sideways in lighter trade today's session was much more favorable. Today proved institutions are willing to put their capital to work in stocks. Not only are they willing to put this capital to work they are supporting the quality growth stocks. We absolutely need institutional support for this market to go higher and we are seeing capital flow back into stocks.

There are quality growth stocks leading this market, a true sign of market strength is its leadership. We are beginning to see the type of stocks where you can build a sizeable position. Jesse Livemore, Jack Dryfus, William O'Neil and other great traders were able to plunge into the leaders and extract as much as their run as they could. There are these types of stocks out there at this moment that will allow us the opportunity to get long in size. It is getting long in size that will have a great effect on your overall portfolio performance.

Keeping in mind we have our backside to protect. We can not remember to cut our losses in cases where a stock is not acting right or its triggering a cut loss area. Generally speaking an 8% cut loss is an excellent area to look at. However, professionals are able to tighten up their cut loss to where sometimes it can be as low as 3%. It takes years and trading in the market to be able to know when a stock is not acting right and it is best to part ways.

A mistake many traders make is giving up on a stock once they have cut their loss. Some times stocks will give a buy signal and fail to continue to move higher and go on to form another base. It is important that if the fundamental growth picture hasn't changed to not give up on a stock just because it failed the first time. Many times some of these do come back and offer up great opportunities to get long. There are a few examples of these happening now. Our platinum members got a glimpse of these last night during a discussion with Joshua and I. Keeping your watchlist up to date is very important in your trading arsenal.

A very positive day in the market, now it is time to take advantage of the opportunities that lie ahead. Big Wave Trading and its members are certainly enjoying and will enjoy a move higher.

top longs w/ TOTAL returns since purchase making money TODAY: KONG 84% ATSG 76% FIRE 48% SIGA 48% ASCA 41% PALM 34% CAST 33% WAVX 31% ADAT 27% ISTA 25% ARST 29%

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Small Cap and IBD Indexes Lag the Major Indexes with Volume Higher Across the Board

2009-05-28T20:31:00.001-10:00

by Market Speculator

Those who have been day trading the index futures know today gave many traders whiplash as stocks bounced around for much of the day's trading session. Intial jobless claims helped the market at the open, but troubling news from the housing put the brakes on and sent stocks lower. For much of the day stocks simply bounced around in lackluster trade. Stocks found it difficult to sustain a movement in either direction showing the epic battle between the Bulls and Bears. It wasn't until 2pm EST when the Bulls began to win the struggle and pushed the major indexes higher. Crude Oil prices closed above $65 a barrel helping oil related names push higher into the close. Closing in their upper ranges along with higher volume notched a day of accumulation for the market.

On the downside our IBD indexes lagged the entire market. In addition, Small and Mid-Caps were left behind leaving a few dark clouds lingering over the market. We must be mindful of the NASDAQ's 5 distribution days and 4 distribution days on the Dow. Although we haven't had any MAJOR bouts of distribution we still have them piled up here in recent weeks. The market is telling us it might not be ready to move higher and will need to continue to be cautious as sideways action may continue for the coming weeks.

Regardless of the political landscape the market does feel like it is in base building mode. Even though we have yet to see any major distribution day we could still end up rolling over a bit. It is not necessarily bad if we had lower as long as volume doesn't pick up but subsides. The market simply could be allowing quality growth stocks to build sound, "pretty" bases. Regardless, we simply need our quality growth stocks to setup properly so we can begin to plunge into them and get our much needed MONSTER STOCKS.

First Quarter GDP number is set to be released, preliminary GDP tomorrow morning at 830am EST. There will be a laser focus on this release as it will shed light on whether or not things are as bad as they appear. I am sure CNBC will have a panel discussion on the effects the Treasury and Federal Reserve have taken to rescue this economy and market. They have yet to begin dialogue about the ill effects inflating your money supply a few times over. As I digress, look for the futures to spin around as the numbers are released as traders look to position themselves for the day.

We are certainly finding some decent looking charts here at Big Wave Trading and we are not missing a beat. It is quite nice to be able to normalized the days activity and not trade emotionally. Be nimble and take nothing for granted in this market.

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Finally We Have The IBD Indexes Leading The Way As Stocks Rally On Heavier Trade

2009-05-26T22:25:00.001-10:00

By Market Speculator

Stocks defied negative news from North Korea as the rogue country tested its nuclear and missle strike capabilities. Consumer confidence jumped big fueling institutional buying pushing stocks even higher and the buying continued right up into the close. Volume was up across the board compared to Friday's trade, but it was below the 50dma. Not a terrible sign, but its more showing institutions are still being a bit shy. Rapping up the day, seeing the indexes close out near the highs on volume was a positive step in the right direction.

Finally, we see the IBD indexes leading this market. The trend will need to continue, but today was a step in the right direction. It is nice to see quality growth stocks lead for once and not the junk off the bottom. Remember, in past uptrends which followed severe bear markets leaders took months to form. We may be seeing this begin to take shape as stocks with quality growth characteristics are beginning to take shape. As these stocks begin to show up and present opportunities to get long it'll allow us to get bigger in a position rather than taking small positions in speculative stocks. This is exactly why we stress keeping the powder dry for opportunties to get long quality stocks.

Other notable positive is news is the number of New Highs hit relative to New Lows. The NH vs NL ratio ran better than a 7 to 1 ratio showing the market continues to have strength from within. In John Boik's research he found that when the NH vs NL was favorable the probability of Monster Stocks appearing soars. Although I do not trade off of the Nh vs NL ratio it is a simply another secondary indicator that hints at the power of this uptrend.

Keep perspective is quite difficult for most as we have rallied off of a massive downturn. This uptrend will not mimic prior uptrends which started with downturns of only 20-30%. We have to look back to prior uptrends off massive decline, much like the 1938 rally. The 1938 rally was far from pretty as it witnessed turbulent consolidation periods and leadership took more than 3 months to emerge. We are now bumping up against the 3 month mark for this most recent uptrend. It should be interesting if we see a pick up in the IBD indexes to push this market higher.

A few things to be concerned with is the number of Distribution Days remaining on the NASDAQ and Dow Jones Industrial averages. At the moment, both indexes have 4 distribution days in recent weeks. History has shown when a market flashes 5-6 distribution days the uptrend is broken and we need to raise cash. So far we've avoided ending this rally prematurely. However, it is something we should be aware of and if our IBD leaders begin to crack and fall apart we'll need to raise our cash levels and look for shorting opportunities. With that said, the positives are outweighing the negatives, but we need to keep our heads up and avoid from being blindsided.

I am very happy to quality leadership emerge, it sheds some light on this uptrend which has been lead by Junk-off-the-bottom stocks. It is what it is, nothing wrong with an uptrend lead by the JOTB stocks. However, for a sustainable rally and a chance to get large gains in stock you need quality growth stocks as your market leaders. We'll be continue our quest in finding the market leaders and as always we continue to right on top of this market.

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Stock Indexes End Slightly Lower On Lowest Volume Since The Beginning Of The Year

2009-05-25T17:25:00.000-10:00

HAPPY MEMORIAL DAY!

I have scanned over 5,000 stocks this weekend and can honestly say that there are some very nice charts out there. SADLY, those charts are all in the sub-$10 category with most sub-$5. The good news is that there are still a lot of high quality CANSLIM stocks like GMCR, PEGA, NTES, TNDM, HMSY, CMG, NFLX, AAN, JOSB, SNDA, AMT, CRM, EQIX, and ASIA that are moving higher, even if they are not setting up and breaking out of the chart patterns I like. However, at the same time, it is a very mixed market, as stocks like AIPC, ALGT, IDCC, QSII, and DMND have setup and broken out of bases, started to move higher, and then have all disappointed by falling below their pivot points.

This mixed action is common and not surprising after the huge selloff we just went through. A lot of people that are not focused on the cheap stocks and most beaten up stocks basically missed the sweet part of the move higher, but if this market is going to turn into a bull, and not die as just another bear market rally, they will be rewarded as those stocks will be the stocks that produce the largest gains in a sustained bull.

Is this going to be a sustainable uptrend? Right now the verdict is mixed as cheap, small, and beaten stocks have been the only stocks to really profit after such a downtrend like we had in late 2007 to March 2009. It is always good when these stocks rally but it is twice as nice if they rally with CANSLIM quality longs. This was the case in late 2002 and especially in March 2003 as both CANSLIM quality and beaten up cheap stocks took off toward the heavens. It still appears to be a market where you must take gains fast at the 25%, 33%, 50%, 66%, 75%, 100%, and 150% moves in the stock. The time to hold for the 300%-1,000%+ returns still is not here. When it is here, you can be sure I will let you know.

PLEASE, if you see a soldier anywhere at a store, airport, mall, etc..., make sure you say hello and give them a big thank you even if it feels odd. It means a lot and is just a small way for us to say 'thank you.' God bless you troops.

I hope everyone has a great Memorial Day and I hope you had a wonderful weekend. I will be back later on this evening to expand on my weekend market thoughts. Platinum subscribers remember to check the 'new Platinum longs' area for new longs off the lows (five new longs). Silver, Gold, and Platinum members if you checked out the 'New Longs' earlier in the weekend, you might want to check back as another CANSLIM quality (yet speculative) long has been added. Once again, have a wonderful Memorial Day. I will be back with more market commentary whenever I finish my first surf session of the day (it feels good to be surfing again). Aloha!

Monday thoughts:

Looking ahead to the short week, I believe that we must remain fluid and unbiased as the market is in a mixed trend on multiple time frames with some trends up and some down. The only stocks that continue to produce good sized gains are the thin, low volume, and cheap stocks. The top quality longs still are not setting up in proper bases to have a breakout be worth a long-term hold. The way stocks have been acting it still seems that it is smart to take profits on the way up, instead of looking at those early big profits as "just the start."

Whenever stocks start to breakout, continue to run, setup, and then breakout and run higher, then I will look to go back to my historically proven methodology of producing the largest gains which is a form of growth-momentum-CANSLIM position investing. Like I posted earlier some stocks like GMCR are acting just like they should but at the same time stocks like QSII are still out there. That kind of action is what keeps me from going fully invested.

Some people were even questioning me for not being fully invested. I had to remind these investors/traders that my main methodology is not daytrading the 3x ETFs and futures or swing trading. My main methodology is the #1 strategy since 1998 according to AAII with a return over 1,500% AFTER the bear market of 2008. The CANSLIM methodology along with my own momentum/growth position trading with stocks with beautiful chart patterns, allows me to produce returns that have allowed me to make investing in the markets my full-time profession since I was a late-teenager. Not too many young guys can make a consistent decent living on an island where the cost of living is a tragedy of expensive proportions. Thanks to IBD and the CANSLIM methodology, along with a lot of market experience now, I can do that. However, is it IBD and CANSLIM that has allowed me this great life? No. It is the men and women that serve in the armed forces.

Once again, soldiers, I want to say thank you. I can not express my gratitude enough to you men and women that serve in uniform and the only thing I know that I can do to express how thankful I am is to post it multiple times on my blog. You guys and girls are the reason why people like me can do what we love to do for a living. THANK YOU!

We will see where we end up at the end of this week. I just want to remind all those that are now fully bearish again that, so far, we are pulling back on lower volume after rallying on heavier volume. For those of you that are fully bullish, I want to remind you that in bull markets that I have been a part of in 1997, 1998, 1999, and 2002-2007, you can not find ONE TIME where the low-quality longs have dominated an uptrend the way low-quality longs have this one. Another thing you do not see often in rallies is leading stocks lag. In fact, I almost can not remember the last time I saw leading stocks lag like this, unless I look at the bear market of 2000-2002. The rally attempt of May to July in 2000 had leading stocks lag. That rally failed. From April to June in 2001 leading stocks lagged. That rally attempt failed. The September 2001 to January 2002 had leading stocks lag. That rally failed. The summer rally of 2002 had leading stocks lag. That rally attempt too failed.

In late 2002, leading stocks in the internet-ISP group which was the #1 group at the time start breaking out. Telecom stocks then follow unleashing a powerful rally with leading stocks producing huge gains. Once again leading stocks lead. In bull markets, leading stocks lead. In bear markets, they lag. Leading stocks have been lagging. How do you think this is going to end?

Stay alert and ready for anything, remember to take gains when you have them, and to get rid of losses before they accumulate into anything serious, and stay positive. Trending markets on the upside will return. Watch the IBD 100 and IBD 85-85 for the signal to get back to the long side in a large way. When it is time to rally big, I will let you know. Well, I'll let the subscribers know, at least. Aloha!

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FULL SIZE PART 1-3 AVAILABLE IN THE FORUMS

Indexes End In The Red With A Push Off The Lows While Volume Eases Across the Board

2009-05-22T01:05:00.001-10:00

From the onset the picture looked bleak for stocks as selling appeared to be slightly higher on the NASDAQ but lower on the NYSE. Selling pressure picked up just after 10am EST as the hot money was moving out of stocks. Interestingly enough money was pouring out of treasuries along with stocks suggesting traders weren't chasing after treasuries. Money was certainly moving into gold and gold related stocks. During the final our of trading we did find support off the lows showing signs the market still has some life left in it. Given the action earlier in the trading session the push off the lows simply confirmed my neutrality on this market.

Gold, Treasuries, and the Dollar are all troubling signs. With Gold moving above 950, Treasurie Yields racing higher and the dollar moving lower is spelling trouble. All 3 items are related and are quite troublesome to watch. The higher the yields on treasury bonds the more costly ALL Government programs become. Utlimately, this burden lies on the US Taxpayer who is already feeling the pinch from the current economic climate. The safe haven is gold and silver as these metals are seen to have intrinsic value. The move in gold will continue as the United States and other Global Central Banks print more fiat currency. Rather than let the market course correct itself we are delaying the natural process a free market provides.

An encouraging sign from the market was the IBD indexes didn't sell off on higher trade and outperformed the major indexes showing signs of strength. Not all is great, the IBD indexes did fall more than 1% and steep price declines are never welcomed. However, like the major indexes the IBD indexes found support intraday and finished well off the lows. A positive development for the market.

At the moment we appear to be in limbo. The AAII investor sentiment survey showed bears up to 45% while bulls slipped to 33%. This suggests that the crowd swung hard to the bears side in a matter of a week. I may remind everyone the AAII Investors Sentiment survey tends to be volatile in nature. It should only be used as a secondary indicator and should have investment decisions directly derived from this data. Nonetheless, with fear growing and the indexes failing to follow through to the downside there may be light at the end of this tunnel.

Other positive note for the market was that New Highs outpaced New Lows by a margin of 4 to 1. Have we got the leadership to take us forward is the biggest question that has not been answered. We are quite long in the tooth from the follow-through day and we are experiencing a stall. It is up to leading stocks to carry us forward and we are in need of them.

Keep your eye on the ball!

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Ending in Mixed Fashion Stocks Fail to Close Out With Gains Seen Earlier in the Session; IBD Indexes Take the Lead

2009-05-19T22:01:00.001-10:00

Following through on yesterday's gains stocks took the lead and moved higher as volume tracked higher. A very bullish sign to see stocks moving higher with higher volume especially right after a day where prices advanced on lower trade. All was well and good with stocks until the final hour of trading where we began to see selling pressure. The selling pressure was enough to send the S&P 500 and Dow Jones Industrial Average into negative territory but the NASDAQ was able to slip in a small gain. Preliminary volume indicates NASDAQ saw higher trade while the NYSE declined avoiding a distribution day. A positive sign is we saw IBD indexes lead the market and we'll await to see if volume on the IBD indexes came in higher. In summary, not a terrible day following yesterday's move, but signs of bullishness are appearing in the leaders.

We've been waiting to see if the IBD indexes would begin to show some light. Yesterday, the IBD 100 was able to see gains on higher volume while other exchanges saw lighter trade. Although it lagged, the volume compenent was important to see. It meant that leading stocks were being accumulated rather than see shorts simply covering. The probability of stock gains improve dramatically when we begin to see growth stocks lead the way. IBD is on the forefront of these stocks and a proven method to capturing these leaders. BigWave Trading is certainly on top of these and ready to pounce given the opportunity to get long leaders.

An interetsing note is seeing the put/call ratio rise today given the stock gains. Although the S&P500 and Dow Jones finished negative they were showing gains earlier in the day. While these indexes were green the intraday put/call ratio (overall) was sitting above .80 4% higher than the previous day. It shows that the move today was not being bought into by option players. The higher put/call ratio suggests the move is showing option traders not terribly confident in the move.

A favorite secondary indicator is the number of stocks making a new high versus making a new low. John Boik pointed out in his book "MONSTER STOCKS" the need to for this ratio to be positive for the market to show Monster Stocks. Today, the market saw (preliminary) 95 New Highs versus 15 New Lows. Again, this NH vs. NL ratio has been positive for quite some time showing us that there is strength to this market. Having a positive NH vs. NL ratio is certainly a welcoming sign that we may begin to see more MONSTER STOCKS on the way.

top longs/(shorts) w/ total returns since purchase making money today: KONG 42% ASCA 34% ISTA 29% (CYT 57% CHTT 17%)

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FULL SIZE VERSION PART ONE, TWO AND THREE AVAILABLE IN THE GOLD FORUMS

Shorts Ran For Cover as Stocks Run Higher on Lower Volume; Some Leaders Show Support With Volume

2009-05-18T23:19:00.002-10:00

Lacking any economic catalysts to begin the week stocks started the day off gapping higher. Volume tracked lower for much of the day indicating institutional players were sitting on the sidelines staying away from the action. It appeared the action was driven by short-sellers covering their positions. It was certainly disappointing to see volume come in lower on such a large percentage move on the indexes. At this point, a day with gains is nice but at some point we need accumulation to support this uptrend.

Price and volume action is the most, the most important action to consider on the exchanges. The next is seeing how leaders are acting. Leaders are found in the IBD 100 and IBD 85-85. Normally, leaders emerge rather quickly from market corrections. However, this correction was quite severe and from past severe market corrections leadership may take months to form. It should come to no surprise that this market is lacking IBD leadership. At some point, for this uptrend to continue the IBD 100 and IBD 85/85 indexes must be leading this market.

There were some positives today as we did see leaders have an excellent day. A few of them found support with volume. A clue that there is institutional support for these leaders. We are on top of them here at Big Wave Trading and are ready to take advantage of these leaders if they begin to breakout. These leaders will run and show is Monster Stock gains. Not only will they be Monster Stocks but they will be the tell when the market begins to stall out. Junk-off-the-bottom have led this market up to this point but for this uptrend to continue any further we'll need to see the IBD indexes lead.

top longs/(shorts) w/ TOTAL returns since purchase making me money TODAY: AVNR 48% INOD 41% ASCA 33% FIRE 28% PALM 28% ISTA 20% (CHTT 16% DV 15%)

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After All That Bottom Fishing The Past Two Months It Looks Like CANSLIM Stocks Are Ready To Lead Next; Stock Indexes Pullback On The Week On Lower Vol

2009-05-17T21:55:00.000-10:00

Stocks pulled back this week and those that read this commentary daily know that we were expecting a pullback and we are getting it. If you remember I wanted the pullback to come on lower volume and that is exactly what we are getting on the IBD indexes, the Nasdaq, NYSE, and SP 500. If stocks continue to pullback this week, I will be more than OK with it as I think stocks are starting to look really good out there in the charting landscape. If this continues I am sure that we will be moving from trading everything breaking out in uptrends and downtrends and will be able to move on to going long the historical patterns that come about right before stocks go on major advances.

If you are not familiar with these chart patterns, you can find them on the 'past big winners' area at my .com site or you can visit the IBD Investors Education site and go over the historical chart patterns that lead to big gains there. If you are a subscriber you can also go all throughout the 'General Market' post to find a ton of beautiful chart examples of other past winners that I was not part of but have studied. The bottom line is that if you are a subscriber, you have no excuse to not know a chart pattern. We have example after winning example on the site and IBD's past studies to look at to know what we need to see before we go heavily long.

The good news is that thanks to the Nasdaq losing RS to the SP500 about two weeks ago and that turning into a pullback it has allowed charts to build better basing patterns. As the rally was moving along I was getting confused as to why the IBD indexes continued to lag while stocks coming off the lows were doing so well. I believe that the market was beaten down unlike anything ever seen and besides an initial oversold burst of breakout momentum most stocks simply can not sustain big uptrends with the weight of past resistance ahead.

The 200 day moving average has proven to be very tough for the indexes to break through. However, the more the indexes test the line the higher the chances are that we will break to the upside. The charts that I see in my scans are hinting that we will be able to make some good money on the long side very soon. While it is VERY NICE to get a 200% to 300% pop from beaten down stocks, the plain truth is that the best, longest, safest, and biggest gains come AFTER a stock has setup over the 50 DMA with the 50 DMA over the 200 DMA. The most important part of all of this is to have a market in an uptrend on strong volume. We are getting that but until the past week we were not getting any pullbacks. So it is nice to see pullbacks as you need these to help launch sustainable long term rallies.

Indexes can not just keep rallying without pulling back and be healthy. When that happens you get 2008. From 2003-2007 the DJIA didn't even pullback 10% ONCE! As you can see 2008 proved that "that" wasn't healthy at all. The gains were great but those that are clueless to cutting their losses or in their ability to spot a top lost a lot of money. Thankfully those of us at BWT went short in November and pretty much stayed cash/short until March. By April we had some longs but it was apparant the stocks off the lows with the "hot" chart patterns were working better than history's past big winners. However, this was because of the depth of the 2008 destruction.

If this rally continues to pullback on lower volume, can hold the March lows, and then make higher highs, I think we are going to see a LOT of CANSLIM quality longs and beautiful max-green BOP filled speculative stocks setup and breakout and work. If this rally rolls over I am ready to go short the new leaders and get short the past leaders that are still LOVED like AAPL and RIMM. The fact these are so loved prove to me that I want to continue to look to short these stocks. However, setups like the new short we have for Monday is the main bandit I will be looking for.

Still focusing on the short side should not be in the interest of momentum traders right now. If the volume would have been higher the past week than the previous few weeks with the 3% to 5% losses on the indexes it would have been very bearish and I am sure we would have more active short scans. As it is, even on a down 1% day there weren't even 10 shorts in each of my scans. Heck there was barely 10 stocks COMBINED in my scans. Still there was a new short but for it to be a short now, for me, it has to show negative divergences in its chart. Obviously this one does.

Don't get me wrong just because I am going short doesn't mean I am focusing on them. No; with the volume coming in lower on the indexes and the charts in my long scans expanding on a down day with more-and-more stocks ending up on my 'possible future longs' list, it would be a crime for this market to fail right now. Especially with so many green BOP filled charts that have very strong price and volume action. It has been a VERY LONG time since i have seen SO MANY green to max-green BOP filled charts. The best news is that these bases aren't the 5th stage or 6th stage bases you would find in 2007 and early 2008 before it all broke loose. No, these bases, our the fresh bases that come in the start of new bulls from downtrends.

I am not certain that this is a bottom at all. In fact, I still lean on the side of it being a bear market rally that will eventually lead to a wonderful shorting opportunity for me. The best thing about the CANSLIM methodology, however, is that my opinion doesn't mean crap. For all I know, we could have "the bottom" and we are about to see a lot of stocks setup in the max-green BOP, huge accumulation filled, and tight price pattern charts that we saw in 1999 and 2003. Every regular bull market looks like 2003 so that should give a lot of you comfort in knowing that if we are only weeks to months away from a real bull market we are going to be making a lot of money in leading stocks soon.

If, however, the economy is as bad as it looks and that the extremely foolish socialist policies of this incompetent administartion is going to continue, I can't see why stocks would rise for the long term. Still if stocks setup in base-on-base, double bottom, cup, cup w/ handle, ascending base, or high-tight-flag patterns with max green BOP and huge accumulation with "fresh" breakouts you better believe I will be putting my opinions on the backburner and will be having a grand ole typing profiting from another wonderful bull market. The charts look a lot better, this pullback has been very constructive, and now the next step is for breakouts and bounces off key support/averages to start happening rapidly everywhere. If charts continue to look the way they do I will soon be spending 3-4 hours scanning stocks. That is a good thing!

Overall, the market still could go any which way it wants. The bull is not strong enough to give me confidence higher prices are in the bag. Better charts, which are starting to try to show, would improve that outlook. However, the way the longs are holding up and still moving higher, with the lack of new shorts showing up or working when they do offer short positions, is a reason to lean to the long side. My mind might say no, but the charts are saying yes.

The current longs I have are weakening but the purchases I am making off the lows for trades still look good. When the proper breakouts start acting like FITB and HBAN did from the lows with their beautiful green BOP/volume filled charts, I will be giving you the clear sign that I am fully invested and holding on for the big gains. For now I say when you get some big gains make sure you take them in. If you go long (or short) and you do not see gains immediately, while we have a bit of a mixed market, make sure you take some to half to even all off. The only exception to hold on to a stock when it does not show you a gain immediately is when you get a very bullish intraday tail with it on volume.

As long as my charts look good, I feel good. My only beef is that the IBD indexes are lagging. I am not used to seeing these indexes lag and I am not used to being 1 1/2+ months deep into a rally and STILL not have ONE stock up 50%, after a breakout over the 50/200 DMA. The weakness is confirmed in the RS line and after reviewing all the big winners it is clear they are 99% from 52-week lows.

I am still going to focus on trading the bottoming stocks and I have two new longs we must watch for swing/day trading positions. I also have a list of longs for Platinum members, not listed to other areas, of stocks with very pretty charts I want everyone to watch off the bottom. One was up 8% immediately and while it isn't a RAD or CAR it has the start to be one. As long as these trading stocks want to rally from very oversold conditions I will continue to trade them in a bullish tape. When the CANSLIM and my 'Past Big Winner' max-green BOP stocks setup, then you can move your focus off the stocks from the bottom, because the only stocks that can produce 2,000% and 3,000% moves without whipping the hell out of you come after a base pattern is built and completed from a previous uptrend with the price above the 50 and 200 DMA. Another very important key to huge gains is huge EPS/sales growth. My best and greenest/prettiest longs in 2003-2007 almost all had very strong fundamentals either as a new company or a turnaround.

Great luck out there everyone. Subscribers you have four videos with over one hour of important stock market information in there and the longs and shorts analysis needs to be read before the start of the week. Great luck everyone, God bless, and ALOOOOOOHA from Maui where volcanic ash sure does make the daylight sky look very surreal. It also makes for killer sunsets!

top longs/(shorts) w/ TOTAL returns making me money TODAY: INOD 36% ASCA 24% FIRE 21% PALM 20% (CYT 59% OKE 39% PG 20% CHTT 15%)

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Volume Slides as Stocks Move Higher After Suffering from Wednesday's Price Decline

2009-05-14T21:22:00.001-10:00

The market was able to avoid further price deteriotion with a low volume move higher. Volume on the NYSE fell nearly 15% while the NASDAQ volume fell 8%. Although the rebound lacked volume it was nice to see the market not follow through to the downside. Ideally, today we would have seen institutions step up and support this market. Instead, it appears for the moment they simply stood aside while stocks moved higher. All in all not an excellent day, we just need more work if this uptrend is going to last.

The NASDAQ led the market in gains finishing up 1.5% while the IBD 100 index was right behind it. A glimmer of hope as we will need the IBD indexes take over as the leaders of this market. It will have to come relatively soon as we do have quite a bit of distribution days we are dealing with on the indexes. The Dow Jones has 5 distribution days while the NASDAQ and S&P500 have 4. When we see a major index hit 5 or 6 distribution days it ends the confirmed uptrend. It is vital we starting see the market do the following: show accumulation and all pullbacks in lighter volume with nominal price declines. The market will show us the clues it is up to us to take them and act appropriately.

The good news is we are still seeing New Highs beat New Lows but the number of New Highs slowed up today on the rebound. Again, there was underlying weakness to the move today as we are not seeing BULLISH signals. New Highs vs. New Lows is not the end all be all, but it is somewhat telling the type of market we are in. I would love to see NH vs NL stay above 1.0 even with a pullback on lighter volume to signal that there is strength within this market.

What we need now is the market to start showing accumulation with IBD stocks leading the way. In order for this market to continue to march higher we'll need CANSLIM stocks leading the way otherwise this uptrend will certainly fizzle into oblivion. We do have stocks that could be potential big winners but this market will need to cooperate in order for these potential big winners come to life.

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Volume slides Across the Board as Small Cap Stocks Lead the Market Lower with the S&P500 Not Far Behind

2009-05-11T17:32:00.002-10:00

Opening the week stocks end lower on lighter trade as Big Cap Techonology stocks aid the NASDAQ finishing well off the days low. The S&P500 was unable to sustain any buying as the index closed near its low-of-the day. A day of consolidation is welcomed, but having a large percentage drop is a bit concerning. Let's not overshadow the NASDAQ's resilency here even though volume finished the day lower. Today, in of itself wasn't a bad day but will need to be taken into context over the next few trading sessions.

A positive note would be to see the Small Caps lead the market tomorrow in higher trade signaling the market is being accumulated. It'll be important that we do not sell off any further on volume as this would highlight there is more weakness to come. Remember, we have come a long way off the lows and have yet to see the market consolidate it's move. Ideally, we'll remain quiet in the indexes over the next week or two while we have the IBD Indexes taking charge. IBD indexes are a signal of strength and will alert us whether or not the current rally has the juice to continue the uptrend. Leading stocks in leading industries are our key to this the uptrend and we are in need of their leadership.

The issue for the indivdual trader is whether or not you have been caught up in the intraday noise. It is the market's job to wear out its participants and if you do not have a sound game plan you are going to be warn out along with your capital. If you are following the number one rules, cutting losses short you are most definitely on the path of destorying your capital. Cutting losses will save your portfolio and will keep you in the game for when CANSLIM stocks begin to start flying.

For now, we'll need the IBD indexes to sure up while the rest of the market pulls back. This will clue us into if we are going to see another leg up with this rally. As always, we'll be on top of the action and will react accordingly.

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Big Cap Technology Holds Back the Nasdaq as Small Caps Lead the Market Higher on Lower Volume Across the Board

2009-05-09T20:09:00.001-10:00

By Market Speculator

It was all about the April Employment figures released by the Government this morning which showed the economy lost 539,000 jobs during the month of April. March job losses were revised down to 699,000 lost. The unemployment rate, reported by the government was 8.9%. Futures reacted positively to the news and helped stocks gap higher at the open. However, big cap technology weighed heavily on stocks yanking the Nasdaq into negative territory. Volume was running hot during the morning hours and as stocks began to see support volumed tailed off into the end of the day. The positive on the day was that stocks did not accelerate to the downside, but lacked the volume and conviction to overcome Thursday's session.

Leading stocks were left behind has Super Regional banks led the market higher. Since the 3/12/2009 follow-through day on the S&P500 we have yet to see any of the IBD indexes lead this market. For a more sustainable move we'll need to see the Relative Strength lines of these indexes to begin to tick higher. Today, once again the IBD indexes lagged highlighting the weakness which is leading this market.

At some point this market will need to take a significant breather. Up to this point we have yet to see this be fullfilled, but we've seen signs that we could be on the verge of a pull back. Thursday we witness the market finally succumb to the selling pressure and end in a nasty day of distribution. Friday the market had the chance to re-establish itself and it failed to do so. This failure could be significant if we begin to roll over this coming week on higher volume. Ideally, the market simply rests here for a few weeks while volume remains tame allowing CANSLIM stocks setup in longer bases.

Up to this point, as to be expected we've seen very sloppy chart patterns where stocks are moving out of. Unfortunately, these tend to fail and do signal the market is headed for another turn. There are a few stocks that have made nice runs from the March bottom, but it is time to see these stocks setup in clean bases. Breakouts have a better probability of success when it is from a sound base rather than a sloppy base.

Keep your eye on the ball.

top longs/(shorts) w/ TOTAL returns since PURCHASE making me money TODAY: SIGA 21% THM 20% FIRE 32% SOLR 36% ASCA 42% ARST 20% (MOS 47% CHTT 15%)

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A Very Nasty Reversal Hits Stocks With Volume Higher Across The Board; Today Was The First Time Both Indexes Fell Hard On Volume Since The March Rally

2009-05-07T22:56:00.000-10:00

I have not done commentary for a while because things were pretty steady there for us since the March lows. Basically all that we have had to do was just manage our longs and our profits as those longs gave them to us. However, what happened on Thursday was a little different than what we have seen before on previous selloffs.

On previous selloffs that we have had, we have either had one or the other index selloff on heavy volume or when the indexes sold off it was on pretty light volume. Thursday, however, came on heavy volume for both indexes. Not only that but stocks like TSYS, SWHC, and NFLX are just some of the examples of how leading stocks were treated on Thursday.

Now, do not get me wrong, we still have a lot of solid charts out there that tell us to stay pat and not get too spooked on this one selloff. However, at the same time, I must say that I have not seen a pullback during this previous uptrend that has given us as much reason for concern as this one has. Just the fact that leading stocks and my best looking stocks had such a poor day tells me that today was just not a weak day for lagging stocks. It was a weak day for all stocks.

The biggest problem in this rally, for me personally, has been the lack of max-green BOP filled charts with wonderful price/volume action. With that, at the same time, leading stock have lagged the ENTIRE rally. If you go back to November, when some indexes bottomed, you can see that the IBD 100 and IBD 8585 continued to selloff into the March lows.

When we finally hit the March lows and the Nasdaq and SP 600 hit recent lows and ran hard (up around 45% for both indexes) the IBD 100 and IBD 8585 did not lead at all. Sure, there might have been a day or two but a day or two does not a rally make. If this rally was for real, you would be able to take one look at the IBD 100 and IBD 8585 and go "yep, those indexes sure are stronger than the overall market." This would appear with a RS line that was in an uptrend off the lows (not a downtrend like this is) and an IBD100 and IBD8585 index in a steeper uptrend. Instead these indexes uptrend has been very much sideways.

Now with today's selloff added to the recent stall the past couple of days on these indexes and NOW it appears that the indexes are rolling over. If that is the case, I still have 20 shorts and am ready to add to those gains and pick up more shorts while getting rid of my longs. But I have to admit it would be nice to keep my 25 longs and get rid of the remaining shorts. Either way, it doesn't really matter because these positions still make up a very short amount of my portfolio.

Well, if I don't have a lot of longs and I don't have a lot of shorts, what do I have a lot of? That's easy at these levels: cash! Cash is still the asset I hold the most of because all during the rally I waited and waited and waited and waited for my max green BOP charts to build with TIGHT bases. At the same time, I waited for high quality CANSLIM longs to setup and breakout of proper basing patterns that were high quality. We did run into some of those and more worked than did not. However, the few that worked did not put in a ton of "impressive" gains. Instead small gains and maybe a 20% here and there and we call ourselves lucky. That sure is a LOT less than we used to get in previous uptrends.

Maybe we got too many bulls too quickly. Last week, in the middle of the rally, we were comforted by knowing that bulls beat bears on the AAII poll and on the Investors Intelligence poll (36% bulls to 37.2% bears). However, this week, the Investors Intelligence poll shows 40% bulls and 35% bears which shows that some are starting to embrace this bounce. Not only is this embrace not wise by some but it is dangerous. Some are getting long without any resolve to where they are going to cut their lost. The good news about BigWave investing is that if you have a gain you let it ride...unless it took too long to get the 20% gain at first...and if you have a loss you get wrong of it quickly.

Stay patient, stay flexible with a bias to both longs and shorts but mainly to cash, and remember this too shall pass and we will have a market that rewards patient and smart investors. Remember, Jesse Livermore clearly stated that the big money was made only ONE WAY for him: in his sitting. It was never his trading that made him the BIG money he said. It was ALWAYS his sitting. Sitting during a big uptrend (like TASR in 03 or LMLP in 99) on the long side, sitting in a big downtrend (like CETV and CEDC 2008) on the short side, and sitting on cash when the market was in no trend whatsoever other than a painful chop for those forced to be long or shorts. Aloha and GREAT LUCK!! :)

--Joshua Hayes, CEO BigWaveTrading Capital Management

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IBD Indexes Lag, Along With The Nasdaq, As The Market Starts To Feel Toppy On The Short Term; Individual Stock Charts Look Great And A Low Volume Pull

2009-05-06T22:56:00.001-10:00

By Market Speculator

Today was owned by the banking sector as the "Bank Stress Tests" were released today. By in large this stress was viewed vastly different from all sides of the aisle. Regardless of anyone's opinion, the market's opinion was positive as banks roared higher pushing the NYSE composite Index and S&P500 higher. Lagging behind was the NASDAQ composite index and the IBD indexes. It shouldn't be a major surprise seeing the banks leading for one day as the stress tests showed most banks can withstand further downside, but we'll need to see leadership from the IBD indexes. Once again, we did see major support for the NASDAQ and other indexes showing there is a bullish tint to this market.

It would be fabulous if we could simply settle and consolidate at these current levels. This market has made a long run from its lows and its time we head sideways for a week or two. However, this Friday we'll see the latest employment figures from the government and it is sure to set the market in one direction or another. At this point, if we could simply get quiet action with the NASDAQ holding its 200dma it would be quite constructive. It would allow the IBD 100 and IBD 85/85 indexes to retake the lead in this market.

The fever over the banks is quite a picture to look at. Taken into context the ENTIRE FINANCIAL sector was essentially blown up since November of 2007. They have been due for a rebound from the constant downtrend. At this rate, we'll see bank stocks running towards their 200dma.

What is has been largely overshadowed by the banking sector are the Chinese related stocks. We are seeing some very nice action coming from stocks who are in China. Remember, China had VAST RESERVES (aka Savings) to prop up there economy. Savings is what drives innovation and production not DEBT. Therefore, the action we are seeing from China is driven by a sound economic position. This surge we are seeing from their investment from savings is sustainable unlike the United States which is using DEBT to spur investment. Unfortunately for Americans, we'll fall further behind the Chinese as they benefit from their savings.

The market will be looking towards Friday Employment figures and should provide us with a little breathier tomorrow. However, anything is possible and we are ready for anything to happen.

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Stocks Find Support off Lows; NASDAQ Holds Its 200 Day Moving Average

2009-05-05T13:38:00.000-10:00

by Market Speculator

Stocks were hit hard from the onset, even leaders found themselves being sold. Ben Bernanke was testifying on the hill while traders were dumping stocks. Selling accelerated as the day wore on but were able to find footing prior to lunch time. Stocks then were hit hard after 2pm hitting new lows but support was able to come in. Stocks once again were able to avoid a nasty distribution day if the NASDAQ had gone out on its lows. This market is once again proving there is an underlying bid to the market.

Two key levels were held today and an important moving average. The NASDAQ was able to hold 1750 which happens to be its 200 day moving average while the S&P500 was able to hold a psychological level of 900. Holding the 200dma is very important level for the NASDAQ as it appears we might be able to produce consolidation above this moving average. It would be a very bullish sign for the NASDAQ to consolidate at this level. Same is to be said about the S&P500 and the 900 level as consolidation above 900 would label it a support level. It is a wait and see game but so far we are seeing bullish action.

Some leading stocks were hit hard in the morning hours, but patience was rewarded as many found support. Leading stocks will always get support in a relatively strong uptrend. Remember, we are coming off lows that were well over 50% of the highs. That kind of damage will ruin many stocks. Another bullish sign is our leading stocks finding support.

One ratio to highlight here is the number of new highs 71 that were hit today while only 12 new lows were observed. New highs are continuing its winning streak by dominating new lows. This ratio must be taken into consideration, remember we have rebounded from an incredible downturn and the expectation to see a massive amount of new highs is unrealistic. Pay attention to the actual ratio and it is showing a bullish tint to this market.

top longs/(shorts) w/ TOTAL return since my FIRST purchase making money TODAY: ANCI 83% ASCA 46% INOD 38% LFT 35% SIGA 27% ARST 22% PALM 22% RGR 25% AIPC 26% (CYT 55% TITN 48% OKE 37% POT 40% MANT 32% PG 21%)

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Stocks Soar on Higher Volume Led by NYSE Composite and Mid-Cap Stocks

2009-05-04T14:07:00.001-10:00

By Market Speculator

From the open bell to the close stocks were being accumulated. Institutional players stepped up to the plate with cash from the sidelines. Leading the way was the NYSE Composite index up 4.16% followed by the S&P 400 (Mid-Cap) up 4.15%. Small caps weren't far behind. Volume was up double digits (percentage terms) acorss the board marking a heavy accumulation day.

While Small and Mid-Cap stocks were the highlight of the day it is important to note the NASDAQ composite index was able to retake its 200dma on higher volume. A very important and highly positive move for the index. Although the NASDAQ has been the leading index it lagged today as other indexes are now playing catch up. Since the follow-through day the NASDAQ has been the index who has seen the accumulation. It will be important for the NASDAQ continue its lead.

Leading stocks are continuing to shine through, but the majority of that light is coming from China. China has been leading the world's stock markets higher and have been under a tremendous amount of accumulation. We are certainly seeing this translate into the Chinese ADRs who are traded on our markets. These stocks are, if not already must own stocks by mutual funds. China is the only country in the world with MASSIVE reserves and they have the ability to take those savings and pump them back into their economy. Unlike the United States that has to borrow, China will simply use its savings and drive new investment. Continue to pay attention to these leaders as they will help push this market higher.

The important note here is to pay attention to leading stocks and how they are responding to the market. At the moment, they are leading and building bases. It will be important to continue and watch their action and take advantage of the situation. This market is acting awfully bullish, keep your eye on the ball and keep losses small.

top longs/(shorts) w/ TOTAL returns since 1ST purchase making me money TODAY: ASCA 37% KONG 30% SOLR 41% FIRE 26% RGR 21% INOD 29% (MANT 32% DV 25%)

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The Nasdaq And SP-600 Make It Eight In-A-Row With Weekly Gains As More And More CANSLIM Quality Longs Begin Setting Up In Proper Bases; The Crowd Sure

2009-05-03T21:01:00.001-10:00

So the Nasdaq snagged that eighth-straight week of gains after all. A flurry of buying at the end of the session saved the day. That the IBD 100 led the way with a 2.8% gain for the week is what impresses me though. According to my records, there were 62 winners to 38 losers. GMCR, of course, went on the warpath to the tune of a 35% plus gain, leaving in its wake the carcass of many an unwise short-seller. Even before blowing away earnings, GMCR had printed a new all-time high and formed a very bullish three-weeks tight pattern. I remember quite clearly Bill O’Neil being asked at a workshop last December what most caught his attention when he looked at a stock’s chart: “Tight closes,” he said. “When you see tight price action you’re seeing institutions at work.” Guess those GMCR short-sellers didn’t make it to that workshop. Maybe next time.

Something else that impressed me was that the American Association of Individual Investors (AAII) reported their members had only 41% of their portfolios in stocks. Apparently, this is the lowest amount devoted to equities in AAII history. 40-50% sell-offs have a way of doing that. While equity allocation was at its all-time low, cash levels were at an all-time high: 45%. This has never happened before. It all makes sense if you recall that just a few days before the Follow-Through Day the AAII came out with a report showing 70% of respondents expected the market to continue to tank. This was the highest level of bearishness the AAII had ever seen.

This continued agnosticism, however, is intriguing. Looking at the monthly charts of, say, TNDM, LFT and ARST, I can’t help but wonder what they are waiting for.

As I write this, the Asian markets have jumped quite a bit. We shall see if this carries over to our markets. If so, we might be chalking up week number nine in a row for the Nasdaq when it’s all said and done.

--John "Author Ego" Ward, BWT analyst

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top longs/(shorts) w/ TOTAL returns since FIRST purchase making me money TODAY: FIRE 25% KONG 20% SOLR 28% LFT 25% INOD 22% ANCI 86% (CYT 62% MANT 30% DV 22% CHTT 17% MCY 17%)

A Weak Day For The Market Indexes Has A Silver Lining As Leading Indexes Outperformed The Market With The IBD 85-85 Closing Up 1.5%+ And The IBD 100 F

2009-05-01T13:33:00.001-10:00

Commentary by John Ward

Well, Investor’s Business Daily published an interesting fact in the “Big Picture” column tonight:

“In the past 22 years, the Nasdaq has made eight-week win streaks only six times. Only three of those times did the streak extend past the eighth week.” So if the Nassy can eke out a gain today, my friends, that will make it eight straight weeks of gains. From there it’s 50-50. It could go either way.

Still, if you think that today marks the end of the rally just because the Nasdaq got rejected at the 200 day moving average, I would like to call your attention to the Shanghai Composite, to my mind the world’s leading index. Back on February 17 it too was rejected at the 200 day. It fell back to its 50 (roughly a 10% pull back), only to find support. Look at the chart today. It has since broken above the 200 day and run up about 20%.

Now, given that the Nasdaq’s 50 day has turned higher over the past month (just as the Shanghai’s had in February) it is not unreasonable to think that should the Nasdaq correct it will most likely be about a 10% pullback. Whether it would be supported at the 50 day remains to be seen. Yet it could very well be that we’re just a few of months behind the Shanghai Index. Frankly, I would love to see us pullback to the 50 day. That wouldn’t be bearish. Far from it. I’ll explain why:

In the April 16 Market Commentary, I pointed out that I was watching CANSLIM-quality stocks such as VNUS, VPRT, RMG CYBS, LL, BKE, POWL to see how the market treated these kinds of equities, as it would go a long way in determining the health of the overall market. Well, I don’t know if you’ve taken a look at these stocks lately, but they’ve more than held in there. Couple this with the likes of TNDM, GMCR, NTES, STAR, etc., and I just can’t see being afraid of a pullback here. It would actually be very healthy.

Think about it: if the market pulls back and these sorts of stocks can form handles or three week tight patterns or flat bases, this will cause RS Lines to hit new highs well ahead of price. Then if the market indeed follows the lead of the Shanghai Composite and rallies again, you will get some absolutely beautiful-looking breakouts. Tell me how bullish would that be? More than that, I have no doubt that a 10% pullback would turn many traders bearish, cause the VIX to spike and the Put-Call to rise. Nothing would make me happier.

Could it all fall apart, though? Could these CANSLIM-type stocks all get blown out of the water? Well, yes, but is that what your charts are telling you? So whether you want to call this a “bear market rally’ or just a rally, there is just no denying that it has been nothing if not strong. The rest is just semantics. Jesse Livermore eschewed the terms “bull” and “bear” because they foist upon one a bias that causes the mind to be less flexible. That’s why he used the term “line of least resistance” instead. I’m guessing a lot of people are dismissing this rally simply because they’ve missed it. Missing and then dismissing the gains is what they do best. You’d think it was beneath them to go long a “bear market rally.”

All I know is that my account doesn’t know or care to know the difference.

STOCK MARKET WRAP VIDEO FOR FRIDAY:

Score It Six Weeks In-A-Row For Stock Indexes But I Still Want To Know When Leaders (IBD 100/IBD 85-85 Stocks) Are Going To Lead Us Higher

2009-04-19T15:10:00.001-10:00

While I LOVE seeing the SP600, Philly SOX, MID400, Nasdaq, and especially the Shanghai SE Composite lead the way higher, there are two key leading indexes that have missed out, so far, but yet still might, on the rally. That is the IBD100 and IBD85-85 indexes.

These are indexes that are composed of stocks with the best ratings for key fundamentals and technicals. If you look at the rally from late 2002-early March 2003 they didn't do great at first but were still doing better than they are now and that is a concern. However from March 2003-early 2007 the beautiful green/max-green BOP filled stocks, with some being CANSLIM, and the CANSLIM only stocks ROCKED the market producing gains that were well beyond the returns of the overall market and the "regular" favorites of those that do not know how to find NEW EXCITING stocks (you know the MSFT, DELL, CSCO, INTC holders).

So as you can see, if this rally is going to be real, we are going to pullback, hold the lows of March, and then take off higher. If/when that happens, almost every single CANSLIM quality stock that I am watching to get long will then have their 50 day moving averages over the 200 day moving averages. This now sets them up in positions to make a lot of money once they breakout or bounce off a key support. Why? The 50 over the 200 signals that the worst is over and that now you have a stock trending higher without the weight of either itself or the market to bring it down.

Now, I want you to remember, this only qualifies for CANSLIM stocks, when it comes to speculative stocks, I am not looking to go heavily long ANY unless they are LOADED TO THE NINE with max-green BOP, huge accumulation, and great price action (something similar to THLD before Friday's selloff). When these charts show up and breakout, with CANSLIM stocks moving higher, then you know it is safe to go heavy into the speculative names. But until more CANSLIM stocks are like NFLX it might be a while before we can expect to have something like MAMA (now CNIC) move up 230% in 10 days.

By the way, MAMA's 230% gain was only FOUR YEARS AFTER THE MARKET BOTTOM, ONCE AGAIN PROVING THAT YOU NEVER NEED TO NAIL THE BOTTOM FOR BIG RESULTS. EGHT up 300% in one month came a FULL YEAR AFTER the 2002 bottom. IST came ALMOST TWO YEARS after the bottom (350% move). ERS and GIGM with their 550% and 250% gains came in 2005 only three years AFTER the bottom. So get this "I missed the rally BULL SH*T" out of your head!!!!! I have heard it from some and I guess they are BRAND NEW to the market or else 97, 98, 99, 03 would have all proven that you don't need to buy THE bottom to KILL it in the market.

If you have to ask me how do I feel about this market right now, I have to honestly say, OF COURSE, that ANYTHING could happen. However, the chart patterns are setting up like the market wants to conintue to rally. At the same time, I see stocks that looked like they were ready DIE. The good news is that NONE of these stocks are CANSLIM stocks but seeing HOT HOT HOT chart patterns start up in CKSW, MIPS, INFI, and some others only to see them lose the "near-perfection" of their charts is always a bummer.

However, focusing on these cheap stocks like PALM gets you in a lot of trouble. The smarter play is to stick with high quality longs that are of some type of CANSLIM worthy. When I look at the EPS and sales growth in actually quite a few of these CANSLIM stocks I am sort of surprised to see continuous growth in EPS and sales, despite the recession we are in. The sad news is that a lot of the top top top best-of-the-best charts are all in China. None of them are at buy points and buying giving out the list of Chinese stocks I am watching, current subscribers can feel safe in knowing that those reading this will have no clue when we go long a HOT Chinese stock that does what it is supposed to do. Chinese stocks like SINA and SOHU are not what we are watching. Instead I would like everyone to know that I am not fully biased to Chinese stocks. They still have to have the chart, fundies, and market to go with it.

The way the SSEC-X (Shanghai Se Composite) has moved off its lows in November and March it is quite apparant that those indexes are outperforming our top index during that time which was the Nasdaq. From November to now, the Nasdaq has moved 27% while the Shanghai Se has moved an outstanding 47%.

This continues the trend of Chinese stocks being more powerful than US stocks. From 1995-2000 (five years) the Nasdaq was able to rally a very impressive 538%. This length of time and the uptrend allowed breakout/momentum players to constantly move from one stock that was making a climax top to another stock just breaking out. You could then repeat this for the five years and at the end you were extremely wealthy with people like Dan Zanger turning thousands into multi-millions. Sadly, for me, I did not "get it" fully (I started April 1996) until late 1998. Now that blessed me in that I got the 1999 madness. However, as the story of IOM, AMER, and all those semiconductor/internet/software stocks goes down in history, I sadly was not part of most of it. I only got 1999. So the 538% move was impressive but I only got in on the end as I was too young to care about stocks in 1994 (13/14 yrs. old).

Now let's compare the 5 year 538% move to China's best move of 483%. As you can see the USA did 50% better than China during its biggest uptrend (95-00) versus China's biggest uptrend. But how long did it take China to make that 483% gain? Uh...ONLY TWO YEARS AND TWO MONTHS from 2005-2007. So if China would have kept moving up at the same rate it was and lasted as long as the US rally China would have had a gain of 966%. So the USA's five year move of 538% would have been matched during the same length of time by China's 966% move. So you tell me which country is more free and is has the better possibility of growth. I think it is clear China is where it is at and as long as it continues to be where it is at, i will be very happy for a potential further rally.

The most important indexes for me, my entire life have been the Nasdaq, SP600, and SP400. I have always made sure they were leading or moving higher ahead of the market to be bullish. But starting in 2001 the IBD 85-85 index was introduced to follow those stocks in IBD with the market. This is now (along with the IBD 100 introduced in 2003) the most important index to follow. Why? Because the stocks that go on to make the biggest price gains are normally leaders. So now we have an index to strictly track the stocks that historically have well outpaced the market.

These indexes is what made me 100% confident in the 2002 lows and ESPEICALLY the March 2003 Follow-through Day, that things were going to be great. Just like now, back then, more and more charts started to show up with pretty patterns of heavy accumulation and green BOP all over them. The only difference mainly is that back then a LOT more max green BOP charts were existing and basing out in perfect round to flat bases. This time the bases are not only shorter but the max green BOP filled charts aren't out there. It is mainly just green BOP filled charts in the speculative stocks. And as I have said OVER-AND-OVER speculative gems should have both quiet bases and heavy volume rallies with max green BOP the whole way. Study all my past big winners from 2003, IST from 2004, GIGM in 2005, HRZ 2006, and AFSI 2007. Now AFSI, HRZ, and IST were not speculative but the perfection in the charts is what I want you to memorize for a speculative stock.

Right now, we have a lot of nice green BOP and some max-green BOP filled spec. stocks. But until more CANSLIM stocks breakout of ANY kind of postive-yellow, green, or max-green BOP pattern with a tight base on low volume and a breakout on heavy volume, I would avoid going long speculative gems in large amounts.

When BIDU, JRJC, CYOU, CSKI, NTES, SNDA, CMED, LFT, MR, CEO, HRBN, CTRP, YZC, CHL, ASIA, JST, STP, SPIL, COGO, HMIN, CTEL, PWRD, SOHU, WBMD, and SINA finish setting up the bases that they are ALL attempting to build (CTEL is the prettiest BUT THE CHEAPEST), I am sure this market will take off and reap us some great rewards. Chinese CANSLIM quality stocks along with some of America's finest like NFLX, CYBS, BKE, NVEC, SYNA, TNDM, INT, JCOM, and GMCR moving higher will then provide the support and juice we need to take the gains from these great stocks and stick them into stocks like MAMA in 2006 that move up 230% in 10 days or BFUN in 2005 that moved up 300% in 10 day. Speculative stocks will work but ONLY AFTER/WHEN the CANSLIM quality longs are working.

So for now, keep your eye on the LEADING Nasdaq, SP600, SP400 indexes for that moment when the IBD 100 and 1BD 85-85 index start moving ahead of them thus opening up our moment to CRUSH the returns being made by anyone else I know out there BESIDES THOSE THAT HAVE BEEN VERY LUCKY OR THOSE THAT ARE ACTUALLY DARN GOOD AT DAYTRADING. And for those of you daytrading penny stocks to the wonderland, great of you! To each their own and I can only hope that your penny daytrading will give you a 2,300% return in nine months, one day, like buying TASR did for us. You had to work your BUTT OFF but we just went into a coma in nine months and woke up and made our sell.

Right now, things are setting up beautifully but those being rewarded are still those that have basically had their ARSES HANDED TO THEM in 2008. If you are up 10%+ this year, congratulations! Too bad you were down 45% last year on top of your 10% gain this year for a net return of -35%. Good job guys (rolling eyes).

top longs/(shorts) w/ total returns making money today: AIPC 27% ANCI 63% KONG 20% (MCY 18% GGB 53% POT 46% MOS 50% K 19% GTIV 40% CYT 70%)

VIDEO ONE: GENERAL MARKET (10:00), VIDEO TWO: LONGS/SHORTS/SELLS/COVERS (15:00), VIDEO THREE: POTENTIAL FUTURE CANSLIM LONGS AND BEAUTIFUL SPECULATIVE STOCK SETUPS (15:00), AND VIDEO FOUR: CONTINUATION FROM VIDEO THREE (25:00) ARE AVIALABLE FOR VIEWING BY GOLD AND PLATINUM SUBSCRIBERS. LEARN, EARN, AND HAVE A GREAT TIME THIS WEEKEND! ALOHA!

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The S&P600, Russell 2000, And S&P400 Produce Very Strong Gains On Higher Volume Above The 50 Day Volume Average; Leading Indexes Continue To Lag Badly

2009-04-12T20:09:00.000-10:00

Stocks ended the holiday-short week on a very positive note but by now everyone knows this. If you guys do not have a real-time stock market intraday tracker for the general market, I really recommend that you use a delayed candlestick version like the one on finviz. These intraday candlestick charts are the highest quality I believe on the web. Now, obviously, if you have any kind of real-time platform you have access to nice intraday charts but for those out there using a delayed broker that do not like the charts they provide or for those just learning about the stock market, these intraday charts of the DJIA, SP 500, and Nasdaq are a must to get to know.

Why? Well a lot of individuals do not realize that how an index trades intraday is actually and extremely valuable way of knowing what the pros are doing. We already know if we have a day where the indexes close higher on higher volume that that is good while when we have an index close at the LOD with volume higher that is bad. However, this EOD analysis while very important and a must for me to make a smart decision about the trend of the market is in fact only a start sometimes. Other times, it is open and shut like the market opens, barely rallies, starts to selloff, and closes flat to slightly higher or lower. No big deal.

However, other times, like on March 25th for the Nasdaq the intraday action can tell me a lot more than it can most. During that day (I do not have the data in front of me) the market was rallying but lagging stocks like banks, real estate, and other clear beaten up weaklings were making the way higher. But before the session could end stocks took a dump lower and appeared that they would close at the LOD. However during the last hour and especially I believe the last 5 to 10 minutes stocks took off with not only all stocks gaining but leading stocks taking the reigns for the first clear time of the rally attempt. This showed up as an amazing intraday move.

Since then, Nasdaq only, we have seen some great tight session with strong closings that I believe all inexperienced and experienced should get used to spotting if we are going to have an uptrend work. Now some of these indexes do not have volume data on some providers so I have to go look at Telechart's SP 400 and SP 600 to determine the rally. At the same time I need to use Daily Graphs to get a gauge on the IBD leading indexes. The bottom line from all of this is that it is very important to know when the market is moving up with volume during uptrends.

Like I was saying, some examples from the Nasdaq include 3/10, 3/12, 3/17, 3/18, 3/23, definitely 3/25, 3/26, 4/1, 4/2, and now 4/7. These closings and intraday reversals have helped put the Nasdaq on top as far as top markets are concerned.

Other indexes have had nice sessions on the daily and weekly patterns the past five weeks but by far the Nasdaq has taken over. The nicest indexes on Friday that I have been waiting since the rally started to see them get going are the SP 400 and SP 600. It has been a long time since I have seen these indexes put in those kind of moves.

Sadly the indexes that continue to lag are the IBD 100 and IBD 85-85. The really sad part is that this deep into the rally, by now, these leading indexes should be leading the market higher.

I will be going over more of how to read charts for subtle clues on if the market is going higher and of going lower.......

FREE YOUTUBE VIDEO (PAID SUBSCRIBERS HAVE 4 VIDEOS 20 MINS EACH IN THE GOLD FORUMS):

PART ONE (10:30):

PART TWO (8:00):

Stock Market Indexes Put In Another Very Bullish Session On Much Higher Volume But Leaders Continue To Lag BADLY

2009-04-03T00:13:00.000-10:00

It was another great day for the stock market which took off on the back of an excellent session in both Asia and Europe. The best part of the rally is that volume was, once again, very large on the rally. This means that the March pattern of higher volume on the rallies and lower volume on the pullbacks. This is the exact kind of pattern is what you want in a market that you are going long in.

Despite all the fireworks in the stock market, I still have one major issue that I just can't ignore. That is leading stocks. I am very happy and excited watching the Nasdaq rally in an exciting manner of higher volume on the rallies and lower volume on the pullbacks. Along with this action a lot of charts are starting to setup in nice patterns. But that is the problem in and of itself; the patterns are just nice.

There simply is not enough "near-perfect" to "perfect" setups (study my 'past big winners' to review what one would look like) to get me excited. Especially when you combine that with the leading stocks lagging the entire uptrend. The Nasdaq composite is up 26% this month off the lows, even outperforming the WORLD LEADING Shanghai Composite in China which is up 17% in March from its lows. Since the Oct/Nov lows it is the leading index but the Nasdaq has been right behind it, in world markets.

While that is definitely exciting about the Nasdaq some great detailed research shows a little disturbing pattern developing. It is clear to me that despite the vast amount of nice charts that I have been showing subscribers in my videos and post in the 'new longs' section, that these stocks are not leading the Nasdaq higher. So even with the Nasdaq having new highs dominating new lows, there is not too many stocks making 100% to 200% moves in a month or so (that isn't $10 or less). To find out where the move is coming from you don't need to look any further than six stocks. GOOG, MSFT, CSCO, AAPL, ORCL, and INTC all make up nearly 25% (23.8%) of the entire Nasdaq. These stocks are up 24%, 26%, 33%, 35%, 35%, and 27% respectively. Only GOOG has not kept up with the Nasdaq and it was only off by 2%. The rest of the big fat heavy giants (btw, how high can I jump? Not very high. So would you hire me to play Center on your basketball team?) outpaced the index and tells me that they have been completely leading this market higher.

This is disappointing for individuals like me that can read the market very well (reading it well doesn't mean you will make a fortune ALL the time-remember that) because we know that this means that the rally is in the hands of six stocks and if one has a real bad day the market will have a bad day. This would NOT be bad IF we had those "near-perfect to perfect" chart setups in more than one stock at a time. If I had "hot" stocks setting up, breaking out, and showing me 20% gains IMMEDIATELY (like ALWAYS HAPPENS TO ME in bull markets) I would be ecstatic about this rally. But the opposite is happening.

As this rally goes on, more and more of my "nice" charts are becoming "mediocre." This happens in either one of three ways. Usually when I go long a stock it is setting up in a chart pattern that has historically led to large gains. When this pattern comes with a LOT of green to max-green BOP, a RS line hitting a new high, and a moneystream line hitting a new high, I know that I have a VERY HIGH reward/risk situation. In 1999 and 2003, when the rally started, proving that it had lasting power, "near-perfect to perfect" charts were setting up and breaking out everywhere. This allowed my accounts to grow exponentially in a short amount of time. Those two years make up for over 70% of my gains. How? Because I knew we had "the moment" both years and went fully long on as much margin as I could get my hands on. If you have reviewed my 'past big winners' you know how large the gains were and what you could have made with margin. Obviously, these patterns work, when they show up!

This rally, as it goes along, kept on producing more-and-more great looking charts with sound fundamentals or beautiful charts (not perfect) that had poor fundamentals. This started to get me very excited. Then I started to get more bullish as my longs went from just a handful to 20. But the last two days, with the strength the market has exhibited with the strong volume, has led to the opposite of what should be happening.

Instead, the stocks that I go long going from green to max green BOP (if not already there) are not making it all the way to the max 100 area. Instead they are getting near the max level and then slowly moving lower. During this time price holds and volume pulls back on low volume thus making the once nice setup now just mediocre. Also the recent longs I have taken breaking out to new highs or bouncing off key support on huge volume that do have max green BOP have also shown the similar pattern of staying max green for one or two days and then declining.

One particular long was looking "near-perfect" when I went long. Here we are about a week into the holding and the max green BOP is gone already. Now the max-green BOP could be back tomorrow as it was up over 9% in the after-hours market, according to someone I know. But if it is not max green, it is just going to be a long in my portfolio moving higher that I will need to treat like a CANSLIM long position as it does qualify as a CANSLIM long. Hopefully, though, tomorrow it will be max green again and I can squash my worry.

But besides my longs not moving up 20% in the first two weeks and 100% in the first three months, like they should and always have done in strong uptrends, another problem is with the longs setting up. There are so many on my watchlist right now that I WOULD LOVE to go long if they keep the green/max-green level of BOP, huge accumulation, and tight price action. However, recently, I have noticed some stocks losing their beauty. NAV is just one example I can think of today. There are many more.

We could focus on that negativity but I feel better "hoping" that the market will continue to rally on stronger volume and pullback on lower volume. While that happens I "hope" that more-and-more of the longs that I am watching that are starting to lose a little of their luster can kick-turn it right back around. That would be great and have me feeling much better that the rally can continue for the intermediate term. Stocks like CSTR, PEGA, ANV, and a personal favorite of mine that I am watching and praying can setup and breakout from a long enough base because the price, volume, and BOP action is just too good to be right. This stock begins with the letter C and subscribers in my chat room or even astute readers of my forums know what stock I am talking about. If these four stock can base, breakout with huge volume and max green BOP, and run higher around 20% in a couple of weeks I will then be FOR SURE that we are in a "legitimate" bull market. However, if that doesn't happen, I am preparing myself to get short again.

I currently have 20 longs and 28 shorts. All it will take to cover the shorts is for another rally on very large volume with BOP going green. If that happens, I will be taking my profits. However, all that has to happen for me to cut my losses in my longs is for the market to have a nasty selloff on higher volume with all my green and max-green stocks turning into yellow and red filled charts.

I am ready for this market to do anything and I am positioned in the strongest stocks for a new bull market and have my shorts that are not only rallying but will outpace the market to the downside if we fail the rally. This is the ONLY way to approach the market as the market doesn't care about your opinion and especially doesn't care about mine.

Great luck out there and ALOHA!

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Stocks Put In Another Bullish Session With The Nasdaq Having Higher Volume; Leading Stocks Are Still Lagging But Some Stocks Are Looking Real Bullish

2009-04-01T17:35:00.000-10:00

Let me first start off by saying that the session in Asia was just amazing with the Nikkei up 4.4% and the Hang Seng index up 7% last night. To go along with that, futures are just popping right now as we go into the morning's opening bell. This is excellent action right now, I have to say.

But what makes this action more exciting to me is that for the first time in a full year (last time was 2001) we have more than just a handful of nice charts out there. To go along with that many of these nice charts are either in leading industry groups or are the leader in their respective group in terms of either price performance or both price performance and fundamentals. The fact that so many charts have green and max green BOP, with the market in an uptrend and China leading, is the most bullish setup we have seen since August 2007 when the Nasdaq made its last run into the October 31st high.

Since then it has been far and wide in looking for winning stocks on the long side. In 2008 we had ONLY PDO and DGLY early on. Then we got XSI (which is now ANCI) and got a quick near 100% gain in a few months with it also setting up in a near-perfect setup in the middle of August giving us a quick 50% gain. That second buy was real nice but even I could not load up due to the fact that so many stocks were acting so poorly. I was too scared and still had the thoughts of the FALC and INXI charts that failed in 2007. So obviously I couldn't load up, even with the near-perfect setup, simply because there was no other leadership to support much less any other stocks with green BOP, strong accumulation, and tight price action.

The best setup, however, came from a stock we are long now for a 40% gain. That stock is AIPC and didn't give just one near-perfect signal but TWO near-perfect signals (6/18/08 8/7/08) that gained buyers a 220% gain and a 185% gain. Just one problem for us at BigWaveTrading; Telechart does not have OTCBB stocks (even if they have great fundamentals and are about to list like AIPC), pink sheets, Canadian, or Chinese stocks. The problem with this is that my price, volume, and BOP that I have used to make a living in the market since 1996 work best on small and mid cap companies. Obviously, that is all that exist in OTCBB markets. So I am sure RIGHT NOW there are a lot of heavily accumulated, max green BOP filled stocks with nice tight price patterns breaking out to new highs just mocking us as we miss them.

Thankfully, AIPC did give another less-than-near-perfect setup/breakout that we were able to take advantage of and now has us a 40% gain. The other thing we can be thankful for is that right now there are a lot of stocks that are trying to setup in mid-summer 2008 patterns like AIPC and XSI (ANCI). If you study my 1999, 2003, and 2004-2007 (heck even 01, 02, and 08 can help) past big winners, you will see that a lot of stocks are beginning to setup in patterns that we have seen before. Nothing EVER changes on wall street. Well one thing does. The players. Besides that, human emotion never changes.

Speaking of human emotions, the Investors Intelligence survey came out and found bulls rose a little to 31% and the bears dropped a little to 38%. The current trend isn't anything to be happy about but the fact that EVEN AFTER this 22% off the March lows newsletter writers are still very bearish as they know "this market is going to top soon." They may be right but if they are wrong there is going to be lot of missed opportunities on their end. Even if they are right, we operate so well that we will be able to take our profits, cut our losses, and get short the proper setups that come along. So we don't have anything to worry about.

But worry is just what the put/call players are doing even after today's rise in the stock market. This is good news because there has been a recent pattern of markets rallying and yet the put/call rises. Normally, options traders get more and more bullish as indexes rally. So when you see divergence, like we saw in 2008, you know it is worthy to pay attention to. Today the put/call rose from .76 to .86. That's great as that says as the market rallies people "just know it is going to fail." Since our longs are growing this is very great news. Also another important number is the AAII bull/bear survey. Despite everyone seeing the rally and the breakouts, people are still hesitant. As we know the AAII number is the "very dumb money" so it pays to watch how they think. How are they thinking? They are mixed. But the good news for those that keep watching their amount of long position in their portfolio rise the public is only bullish by 43% to bearish of 37%. To go along with that 20% don't know what the heck is going on as they are undecided.

So we have the charts starting to show up in multiple industries (only missing the max green BOP charts that last for 50 or more :)), we have sentiment working correctly for us, option players keep getting bearish as the market rises, and we have a lot of people out of the market meaning that the best serious players are left. Fewer of the "REALLY dumb money" players exist after the 50%+ losses a lot of newcomers took and that means a more orderly market. There is really only one thing missing (well two if you are asking for that stocks be perfect with huge accumulation, max green BOP, and a flat base breakout lasting five weeks). Where are the IPOs?

Well the pipeline isn't anything to get excited about but we do have a new IPO pricing today I do believe. CYOU is scheduled to price at the opening range of the $14-$16 area. The best news about this IPO is it is a spinoff from Sohu.com which helped earn me a 2,000% gain from my first small purchase and a 798% return on the MUCH bigger second buy from a MUCH better chart setup. From the first and second purchase to the top of this stock, the ride was only nine months and eight months long respectively. Hopefully, if we are REAL LUCKY (don't count on it) CYOU can setup and breakout and be the next SOHU of 2002-2003.

Right now, it is all about Gold and Silver as 7 of my 20 longs are Gold related. It has been the #1 industry for 6 straight months in Investors Business Daily. What is more amazing that 7 months ago it was DEAD LAST at #197. And the stocks are JUST NOW breaking out. That is pretty rare to see stocks not run for six months yet have their sector lead the whole way. Now those leaders are breaking out and if history and the stock market (which is THE MOST IMPORTANT "if") repeats itself some of those 7 longs should be making us a lot of money in a short time frame.

Don't forget, besides the positions I am long, I also encourage anyone 50 or younger to please go out and to start slowly accumulating Gold or Silver bullion. Just a little bit can go a LONG WAY if something horrible ever would happen, God forbid. Great luck, hopefully our markets can repeat Asia ON HIGHER VOLUME, and I will see you in the Chat Room or Forums. ALOHA!

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Will Stocks Keep Rallying Next Week? We Don't Need To Know As The Charts Will Continue To Tell Us What To Do As It Happens; What Matters The Most Is T

2009-03-15T22:34:00.001-10:00

I spent a lot of time this weekend (looked at over 6,000 charts in a little under an hour--53 minutes) scanning charts and have to say I see more "green" charts than I have since the March 2008 to June 2008 bear market rally. There appears to be MUCH BETTER looking stock patterns now than there was then, also. Back in March 2008, a lot of stocks were clearly topping and only making short-term bear market low-volume rallies back to resistance. There were very few winners then and very few "nice to hot" charts. DGLY and PDO were the only two that set up and did not fail. The key tell the market was over, to me, was when ACM setup in that beautiful pattern and started a very heavy volume move in June which end very quickly when in five days the stock closed below the key averages and the low of the purchase date. That was clearly a very negative situation to see occur for that stock. When stocks setup in strong bases like that, especially when they are new issues, and then fail, you know things are not going to go well. This rally has a lot of stocks with stocks making nice bases full of strong BOP and volume action. These stocks are showing up AFTER the market put in a huge decline, thus increasing our odds that if a successful setup resolves its way higher if and when they breakout from those patterns. Once again, I am going to keep it short as I have already given subscribers a TON OF INFORMATION this weekend with five videos for them to watch since Friday. Subscribers you are completely up-to-date and ready to battle this war for your capital. Great luck everyone! Aloha!

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Stocks End The Week On Another Weak Note, Despite A Last Hour Surge Into The Close; Shorts Are Making A LOT Of Money In This Market--It Feels Good But

2009-03-08T18:44:00.002-10:00

Market Speculator is going to do the commentary this weekend since he was closer to the market than I was this week. I will however add some important stock market "notes" below. These notes are important key points that I want everyone to think about while we "search (yeah right!) for a bottom."

When Josh asked me to write a few comments about the market I didn't realize he'd sum up ALL THE FACTS below in his notes below! Throughout much of the week the action was dominated by the actions of short-sellers covering and re-shorting. It appeared as if all the large institutional players were simply selling into any strength we saw all week long. The market needs institutional support to move higher, but we simply are seeing these institutional players as net sellers rather than net buyers of this market.

There is absolutely no need for us to be trying to pick a bottom here. Our charts will lead us to the stocks that will lead this market out from a bottom. Unfortunately, we have really do not have ANY stocks at this point that provide this market with the type of leadership to move us higher. We will find these stocks when we do finally reach a short-term or even "the" bottom. Until then, we simply wait and take our opportunities on the short side.

The number one concern we must be aware of is the EXPLOSION in the monetary base of the United States!

(THE FULL CHART DOES NOT SHOW ON BLOGGER. IF YOU GO TO BIGWAVETRADING.NET YOU CAN SEE THE FULL CHART)

If this does not scare you, what will scare you is that never before in Human history has any Government EVER has increased its money supply like the Federal Reserve and US Treasury. One piece of the inflation equation is the supply of money. The more money you have floating in the system the more expensive goods and services become. Unfortunately, in the near future we may begin to feel the consequences of our Federal Reserve, Congress, President, and Treasury's actions.

We'll continue to stay on top of this market and extract profits from this terrible market and cut our losses when it is prudent to do so. Capital preservation is the #1 game at the moment. We will get a new bull market at some point and we'll be ready to take advantage!

Market Speculator

Notes from Joshua Hayes:

--There were only 2 stocks making new 52-week highs (one was too thin to think of...what was the other one? RGR (Sturm Ruger). Why do you think that company is hitting a new high? BTW, while only 2 stocks made a new high, there were 1,199 stocks making a new low. This is not bullish and is ONLY bearish.

--A little good news is that the Nasdaq is developing some great RS to the SP-500 since the November lows and while the NYSE fell 7% this week the IBD 100 only fell 4.8%. This makes it possible for a possible over-sold bounce in the future. However, I would wait for a series of higher highs and higher lows before trying to play this market on the long side.

--IPOs in the past year make up 1.1% of the total stocks available on the NYSE. This is, by FAR, an all-time low. When the stock market is in an uptrend it is common to see anywhere between 4% to 7% of all issues being IPOs. The recent high happened on March 16, 2005 when 9.3% of all stocks on the NYSE were new issues in the past year. Pretty impressive! In 1999, I can honestly say it must have been around 15-20% of all stocks on the Nasdaq. So clearly we are in depressing waters since new issues are the lifeblood of growth in the stock market. The fewer IPOs the lower the gains the market will produce. 1.1% is a horrible number and if it gets below 1% it will be very upsetting.

--If this is a capitulation bottom, where is all the volume? Where is the HUGE intraday reversal? No, my friends, Friday was not a capitulation bottom.

--Right now the AAII is showing the most bears its survey has ever shown with average investors coming in at 18% bullish and 70% bearish. Bearishness is very thick, in the public arena. As for the investment newsletter writers, the same thing can be said. Bulls come in at 29.7% while bearish newsletter writers are 44% bearish. With the crowd so bearish, it must be showing up in the volatility gauges that we use, ALONG WITH PRICE AND VOLUME ACTION IN THE INDEXES, right? Wrong!

--Back on March 17, 2008 friendly (ROFLMBO) people like Sandy Wright, my accountant, and Jim Cramer were telling me to buy LEH, BSC, GS, WFC, C, BAC, and other "cheap" stocks that I was "too stupid to realize they were bargains." Since none of these people could read a chart to save their lives, I tried to figure out why they would want to go long here when, to me, CLEARLY, the market was possibly beginning to really top out and start a potential nasty bear market. It became obvious to me it was simply greed and the fact that the market was very fearful and they were all trying to be cute and catch a big move. It failed. The put/call on that date was a whopping 1.41! When the November lows came for the market in late 2008, it didn't look right, even though the VIX hit 90! Why? The put/call was still no where near 1.41. I believe it hit about 1.2 and that was it. Right now, the put/call is .93. Does this .93 put/call show the same amount of fear as the 1.41 day? Not even close. So how can this be a bottom? Let's look at the VIX first, before we answer that.

--The VIX today is a high 49 very close to the magical 50-60 range that used to indicate a bottom. That was until those November lows. In November, the VIX hit 89.53, intraday, which was the highest intraday reading since the 1987 crash. With the VIX hitting new highs it hasn't seen in over 20 years the market must be indicating enough fear in the trading to be at a low right? Not so fast. Remember, the put/call was only 1.25 at its highest and that was not higher than the 1.41 in March. Therefore, the VIX and put/call did not confirm a bottom in November just like it didn't confirm one in March.

--The NYSE, the SP 600, the SP 500, the Russell 2000, the IBD 100, the DJIA, and the IBD 85-85 all have the worst accumulation/distribution you can have with E. The only index without an E is the Nasdaq.

--The NYSE short-interest ratio is at 8.69 which is much healthier than the 17.99 it displayed right before the swoon from October to November. This is a bright spot, along with the healthy level of bearishness with the overall public, for a possible bottom. However, before you go out trying to call a bottom with anything I have listed today in my "notes," don't forget the most important ingredient in this market dish is price and volume of leading stocks and the market.

--How many beautiful max green BOP filled, heavy accumulation with low distribution filled, nice and tight green charts are there out there right now? I have the scans that find them. I can tell you. About two to three. Two to three! That's it! I should have at least two hands full of "hot" stocks starting to setup or near completing a setup, before I actually get confident in calling a bottom.

--Not only will a handful or two of "hot" stocks be required, but we MUST see leading (CANSLIM quality) stocks in leading industries setting up and breaking out or at least leading the market higher, before I ever rely on any of the indicators I spoke of above before going heavily long the market.

--The most important thing to look for a bottom, however, is the simple price and volume of the general market. When the market starts selling off on BELOW average volume (the past week EVERY DOWN DAY WAS EITHER A NASTY SELL OFF OR A DISTRIBUTION DAY) and then hits the lows and reverses on strong volume, which is then followed by another up day and then within the next 3-10 days have a very high volume accumulation day (volume needs to be higher than the day before), then and only then can we look for a bottom. If you have those three up-sessions (PLEASE, study the 2003 FTD I believe on March 17, 2003) within 4 to 11 sessions, have "hot and beautiful" green chart patterns setting up in proper chart patterns, have CANSLIM stocks moving higher or setting up in proper bases ready to breakout, have a put/call near 1.41, have a VIX near 90, and there are more bears than bulls in the two key surveys then you know we have a bottom...or at least have the potential for a real bottom. Any "potential bottom" anyone calls out there on CNBC or in the WSJ is just noise, unless everything lines up. Just remember, the most important part is the actual index and the price and volume action of that index. The put/call, the VIX, the surveys, the opinions, and anything else technicians/contrarians use to try to ID bottoms are useless, UNLESS THE PRICE AND VOLUME ACTION IN THE INDEXES AND LEADING STOCKS ARE MOVING HIGHER.

Aloha and I will be back to the "normal" routine on Monday when our Platinum subscriber Todd goes home. As subscribers know I still came in the chat room, updated the forums fully, and updated the longs and shorts pages every day, while basically on a vacation. There aren't many people that will work harder FOR YOU than me. I love you all (minus that jerk I just kicked out of my website) and hope you continue to make us much money as I am in this horrible economic environment. I HATE SOCIALISM and pray for the day when the stock market can return to normal.

top longs/(shorts) with TOTAL returns making me money TODAY: ANCI 55% (BOH 36% LLL 39% AMX 55% THG 18% CEO 38% RDK 38% GGB 68% PLCE 26% OKE 56% CFR 19% CBU 25% MOS 54% AAPL 47% WABC 15% CYT 79% GTIV 47% POT 58% RIMM 63% FSYS 44% SPG 68%)

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Another Nasty Session On Above Average Volume Rocks Stock Indexes For Sizeable Losses; Socialism = DEATH OF AMERICA! LET FREE MARKETS BE FREE!!

2009-03-08T18:40:00.000-10:00

I believe John Ward will be posting today's pre-market commentary. Aloha!

Well, so much for that rally attempt. It was a loss of 4% or more for all the indexes. Small caps got hit especially hard. Volume ran hotter across board, too, except for the Nasdaq and Nasdaq 100 (though volume was still above average). Both the S&P 500 and DJIA hit new bear market lows. All in all, it was a nasty day.

Whether it’s GM’s auditors being concerned that Chapter 7 bankruptcy could be inevitable, or doubts about the viability of the banks, or doubts about the FDIC having the funds to guarantee the banks’ deposits, the news has been nothing short of dismal. After all, what happens when the fund that protects our deposits against bank insolvency is itself insolvent? Sheila Bair assured us not all that long ago that the taxpayer won't have to bail out the FDIC. Hmm, where have we heard that one before? She said banks, not the taxpayer, will pay to fund the FDIC. Yet, as I thought to myself at the time, how will that work if those banks are themselves insolvent! So, yes, it’s official: we are all trapped in a bad Kafka novel. Now, according to the Wall Street Journal, the esteemed senator from the great state of Connecticut, Christopher Dodd, is moving to allow the FDIC to “temporarily borrow as much as $500 billion from the Treasury Department.” You have to love that adverb: “temporarily.” Fire up those printing presses, boys!

Couple all this with what is going on with some of the public pension funds that are out there, which by law the states must guarantee, and you have the makings of a very hairy situation for the dollar indeed. This might explain gold’s perfect bounce off the 50dma today.

Meanwhile, the Obama administration is tackling threats head on; for example, Mad Money’s Jim Cramer. White House Press Secretary Robert Gibbs answered a question regarding comments Cramer made on the Today Show by, in essence, insulting him. But, in response to Gibbs saying that “the president has to look out for the broader economy and the broader population," Cramer, who I can’t believe I’m quoting, wrote quite correctly: “Only the people who have lifetime tenure, insured solid pensions and rent homes but own no stocks personally are unaffected. Sure that's a lot of people, but believe me, they aspire to have homes and portfolios. If we only want to help those who have no wealth to destroy, we are not helping the majority of Americans; we are not helping the broader population.”

So, given all that is going on, is it any great surprise that the American Association of Individual Investors comes out with a study that shows over 70% of its members are bearish, the highest reading since the index’s creation in 1987? They tell me these sorts of reports are good contrarian indicators, that extreme bearishness is actually bullish. If that is true, then why, even after a day like today, is the Put/Call ratio still under 1.00, according to Investor’s Business Daily? So don’t confuse bearishness for fear. Fear is what makes a bottom, not bearishness.

As we have repeated here at BigWaveTrading ad nauseam: Cash Is King! If you followed this advice, pat yourself on the back and thank your lucky stars. Take a gander at the returns of the top mutual funds, you’ll see what I mean. Think of it this way: a 0% return this past year puts you in the top echelon! And they say investing is hard….

John Ward (Author_Ego - chat room handle)

top shorts w/ TOTAL returns since purchase making me money TODAY: CETV 94% CEDC 88% IPHS 64% TITN 62% GTIV 45% CYT 78% CBU 24% MCY 42% GGB 67% BOH 36% CINF 22% POT 56% SDA 81% MANT 15% FSYS 17% AAPL 44% ARB 73% AMX 55% PG 28% MOS 53% OKE 56% LLL 38% CFR 18% RIMM 61% THG 17% CEO 37% SPG 66% RDK 38% CB 15% DV 16% WRB 22% K 26% PRGO 35% APD 51% CASY 34% AMSG 44%

Nasty Selloff, On Friday, On Huge Volume, Sends Indexes Into 1997 Levels; I Feel A Nasty Selloff Coming. Hope I Am Wrong!

2009-03-01T23:30:00.001-10:00

It was an ugly end to an ugly week and this was good news to us at BigWaveTrading.com because are long-term shorts are really starting to pay off. This can be seen by just looking below at our top short returns. As you can imagine, with our Gold longs, it was a very good week.

I think it is best for everyone to just stop listening to the media and start paying attention to your charts only. It has become very clear by looking at the "best" pundits returns for 2008 that they are the least trustworthy bunch of stock advisers that there can be. Heck even my accountant who runs a ton of stock trading accounts admitted that I had the best returns last year. So it has become very clear to me that most are doing horrible.

Not surprisingly the active investors that did the worst were daytraders. I am not shocked by that as much as the "trading advice" he was attempting to give me. Why was this shocking? Because he just admitted that he was one of "those" that lost a lot of money in 2008, yet there he is telling me, once again, how I should probably invest.

It was crazy to think that someone that lost so much buying bank stocks all year long and who just saw my GAINS FOR 2008 is telling me "the right way to trade." I asked him why he believed his way was better than mine even with the huge difference in returns. His response was, "that is what I learned in college and from reading Warren Buffett." Instead of cracking up and peeing in my pants I decided, instead, to ask him how much he has paid in "market tuition" in becoming an investor. He told me he has bought five books by Warren Buffett and "just knows to buy financials cheap." Where did he learn that? Nowhere. He created this rule in his head. If he bought bank stocks "cheap" all year in 2008, how do you think he did?...exactly. What is the point of all of this?

It's simple! Clearly he spent too much money going to college and learning how to become an accountant he said and thus would not pay for financial advice. I said, "sir, that is why you are down over 50% this year and have ruined 20 years of gains in one year." The outcome of this mess...he has to move off of Maui and I now will have a new accountant.

Folks, the honest to God truth is that if you are reading this, are not a subscriber, and our losing money currently in the market you need to go take a long look in the mirror and ask yourself if you COULD handle a 20 year bear market with losses most years. The funny thing about the members of BWT is that a LOT of subscribers did better than me last year because their long and short decisions were better timed and they went heavy in the right shorts and the few longs we had. The one thing they all had in common? NONE! of my subscribers are even 1/2 way to being down 55% like the NYSE is. NONe! And this year has even been better so far in that both our shorts are KILLING it and so are our Gold longs. Being long Gold and short the market has been a blessing for the BWT crew so far this year and I am sure by the end of the year the intelligent o'hana (family) of BigWaveTrading will be outperforming the majority of stock websites out there.

Everyone must invest in themselves. Why in the world do 95% of the American population pay more for cable bills every year over investment publications? Why do over 95% take more time thinking about the outfit they are going to wear instead of their next investment decision in the markets. NOBODY needs other people to invest their money for them unless they have less than 30 minutes a day for 5 days a week. If you have at least 30 minutes a day for five days during a seven day stretch, there is NO EXCUSE to not be running your own money. However, if you don't have that amount of time then SURE give your money to Ken Heebner.

If you have the time you have no excuse. By using that time clock I just gave you, knowing that it WILL take at least two-to-three years to do it CORRECTLY, CONSISTENTLY, AND PROFITABLY, and then at the end of this tuition period you will be able to scan, research the few that show up at night, and then enter your orders in about 1 hour to 3 hours depending on how many show up in the scans nightly is the best job in the world. Why? You have the other 21 to 22 hours of the day to do whatever you want. Even if that is daytrading, so-be-it!

I want to apologize to everyone in case there are any mistakes in this tonight. On Sunday morning I woke up to a severe! MS attack that has rendered my left hand numb completely and useless. So I did all of this with one hand and it took very long. However, everyone needs to understand that YOU WILL NOT EVER!!! make money without spending money on market advice.

When I started, by the age of 17 I was paying $200 EVERY month for access with an elite group of traders. NOT only that but at 16 I (not mommy or daddy) was paying for IBD and by 17 you could throw Telechart data into the equation. The bottom line: the more money you spend on GREAT TOOLS like Daily Graphs, Worden charts, and low cost commission houses like Interactive Brrokers, the more money that you spend to learn from the best, the better you will be. My subscribers know this and I am telling you I have NEVER seen such a correlation in portfolio performance from those that get free advice from the market and those that pay for GREAT advice. Those that pay definitely get to play and stay. Those that don't, the market and YOU know you are a joke. Very few are cut out for this but if you are going to commit to a big wave you could find no better spot.

Once again, I apologize for my Multiple Sclerosis attack. These normally take a month to pass but pray that it last just a few days. No matter what...I'll be in the chat room!

top shorts with their TOTAL returns since I went short that are making me money TODAY: CEDC 87% SDA 80% CYT 70% GGB 66% TITN 57% SPG 59% IPHS 51% APD 50% OKE 49% GTIV 35% PRGO 32% CEO 32% MCY 33% BOH 22% WRB 16% PG 24% LLL 28%

Obama's Budget Proposal Frieghtens the Market Squashing Early Morning Stock Gains

2009-02-28T20:46:00.000-10:00

by Market Speculator

"A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned - this is the sum of good government." - Thomas Jefferson

Looking across the blogosphere and media outlets one might have expected a relief rally. Logic and indicators pointed to an oversold market. Thursday's action began positive, traders were getting behind the idea of we could rally. Obama's budget proposal was set to be released during the morning hours of the market. During the 2008 Presidential Campaign Obama pledged to reduce the operating budget deficit; traders were expecting to see Obama to adhere to his campaign promise. However, upon the release of the budget the market began to sell off. There were no improvements to the budget deficit, but it was ballooned to a tune of $1.75 TRILLION dollars. In addition to the budget deficit the proposal ATTACKS healthcare providers effectively squashing future profit potential. The market is not to be argued with, it is foreshadowing troubled times its best we pay attention.

In Tuesday's market wrap I mentioned the Equity Put/Call ratio and how it was signalling complacency. It continues, the equity put/call remains near lows as the market remains near its lows. Alongside the put/call ratio the VIX index is showing how the selling is not sparking any FEAR in the market. Even short term bottoms will have these indicators showing SOME level of fear. Not this time, sellers are complacent and it shows there is high level of hope that this market rallies in the near term. If we are able to lift off the lows it will be a weak move.

The biggest thing YOU can do is to make sure you paying down your debt and keeping cash on hand to pay for groceries. As for this market, we are finding ways to make money. Whether it be long or short we are still making gains.

Gold and silver are pulling back and consolidating from an impressive move higher. Fears regarding the world's economy and the confidence the world has in its available currencies has gold/silver bulls out. History has shown when confidence is lost in a fiat currency gold and silver are sought after as a safe haven. Once confidence is lost a mass exudos occurs from the paper currency to precious metals. So far, it appears we are headed down the path of a dollar crisis.

GDP numbers for the fourth quarter are set to be released this morning. It'll be focal point for the market as it opens. I'm afraid, regardless of the annualized figure it will not cure what ailes this economy. Cutting spending and taxes is the step in the right direction.

Enjoy the remainder of the work week and have an enjoyable weekend.

M.S.

Top longs/(shorts) with TOTAL returns making me money TODAY: ANCI 59% (TITN 56% GTIV 19% CPRT 23% GGB 64% CEO 31% OKE 48% APD 49% ARB 73% WRB 15% K 22% LLL 25% RDK 33% PG 23% RIMM 60% MCY 32% AMSG 37% PLCE 33% SPG 60% IPHS 51% CYT 70% SDA 80% PRGO 31% FSYS 17% CASY 30% CEDC 86% AAPL 44% AMX 53% CETV 93%)

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Two Very Nice New Longs On Today's Down Day May Hint To An Oversold Bounce; The Trend Is Still Down, Down, Down, Down

2009-02-25T23:46:00.001-10:00

Overall it was a negative day, of course, with the markets down around a little over 1%. However, the SP 600 lost almost 2.5% and the IBD 100 full of leading stocks fell 1.4% showing that the leading stocks and small-cap stocks that usually lead new bull markets. So the fact that they weaken worse than the overall market when people are talking about a supposed bottom really leaves me scratching my head.

There is some good news for bulls however in that, for the first time since this downtrend got started, I actually had a significant down day with zero new possible shorts and two new longs. Not only that one long is a CANSLIM quality champ and the other is in the leading mining-gold/silver stocks industry. So these two championship longs showing up in a day where the market loses over 1% is pretty impressive. However, honestly, without a ton of volume in the market, the gains are not "really" that impressive. It is what it is.

If this was a raging bull market like 1995, 1998, 1999, and 2003 that I have witnessed or participated in, I would have no problem jumping up and down saying GET LONG THIS STOCK IN BULK as the odds would be well in our favor. Right now, it should be very obvious to all of those out there, besides the few crazy daytraders that can actually trade this market and make money ON A CONSISTENT BASIS--this one day lucky stuff doesn't cut it with me and I will never take you one day wonders seriously. It is the long term that will ALWAYS count--most investors should be fully in cash or have only small long gold or small short the market positions.

Overall it was a dull day with higher volume and signals a lot of action in the churning arena. A lot of firms are flipping shares around creating what looks like a market but it is obvious from watching one day drops of 21% after a stock takes 6 months to rally 10% is not a market where everyone is at home. Someone has fallen asleep at the wheel and something needs to be done. I like the idea of going back to a pre decimal period, end regulation FD, and stop the program trading. End this and we would see a very efficient market come back. However, my final recommendation would actually HURT ME IN MAKING MONEY WHICH PROVES IT IS THE MARKET I CARE ABOUT AND NOT MY POCKET: the whole process of having no uptick is insanity. There needs to be an uptick rule and the rule should be put back. The market used to have a way of working that seemed honorable. Now it is hard to honor and chart when you know something could come out tomorrow that kills it. It is such a different world out there but even though the world is changing one thing will always remain the same:

CAN SLIM® System Is #1 Growth Strategy From 1998 Through 2008. An 11-year, independent study by the American Association of Individual Investors found IBD's CAN SLIM Investment System gained +1,351.3% while the S&P 500 dropped -6.9%.

Why in the heck is anyone reading this using ANY OTHER type of methodology. Why are you not joining me in MASTERING the GREATEST methodology out there for making money in the stock market YEAR-IN-AND-YEAR-OUT! Not just one lucky fluke trade every three years. A real living. An honest fun living.

Have a great intraday most of you and for my subscribers I will see you all near the last three hours to the closing bell, tomorrow! Great luck out. Let's make more money. I might have lost my total 10% return this year but compared to the SP 600's 21% loss, I guess I can chalk up the first two months to the win column. ALOHA and see you in the chat room!

top longs/(shorts) with TOTAL returns making me money TODAY: ACNI 57% (CPRT 23% CASY 28% POT 49% K 21% SPG 57% MCY 30% AMX 54% BOH 22% CEO 30% TITN 56% CYT 69% LLL 23% AMSG 27% APD 49% ARB 72% PLCE 30% IPHS 49% CETV 92% CEDC 85%)

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Ugly Day For The Stock Market Equals A Big Money Making Day For BigWaveTrading.com; Gold, Silver, Platinum, and Shorts

2009-02-23T23:53:00.000-10:00

Today was sure one ugly day for the market as indexes fell hard across the board. About the only thing positive you can say is that volume was lighter. However, when stocks are falling almost 4% I am not sure volume is that important.

What is important is that the market is proving those that were patient and held shorts while the low volume rally occurred were right. I now have many many many shorts up over 50% in short amounts of time along with new shorts already up 15%+ in many issues. What makes this EVEN BETTER is that gold stocks and the commodities of gold, silver, and platinum are rocking it. Not only that, but the rest is in cash sitting safely ready to pounce on the next round of leaders if and when they setup.

Basically I would have to say that Friday and Monday have been home runs for yours truly and I have almost already returned my total return for last year. This tells me that the market is getting some sense back with it, even if it is not rewarding leading growth-stock investors yet. It is still rewarding those that know how to get long the right leading stocks at the right time. Whoever said you can't time the market must not have EVER learned about CANSLIM.

Speaking of CANSLIM, I feel it is very important to post something I read this morning when I returned from Waikiki, O'ahu:

CAN SLIM® System Is #1 Growth Strategy From 1998 Through 2008. An 11-year, independent study by the American Association of Individual Investors found IBD's CAN SLIM Investment System gained +1,351.3% while the S&P 500 dropped -6.9%.

If some of you have been reading me for years, have seen the returns of my 'past big winners' in my longs section, have seen these returns by IBD over the past 11 years, and see my returns now on my current shorts:

top shorts with TOTAL RETURNS making me money TODAY: MOS 58% GGB 67% SPG 61% CEDC 84% POT 52% CYT 70% MCY 32% APD 48% TITN 57% CASY 29% FSYS 15% IPHS 50% CETV 92% AMX 53% OKE 47% PRGO 28% SDA 80% AAPL 45% RIMM 62% CINF 15% LLL 23% BOH 24% RDK 32% PG 23% CPRT 24% WRB 16% ARB 72% PLCE 30% CEO 32%

..and then let's not forget my Gold ETFs and my gold long in ***. There is another 27% gain in one month, when most are losing money.

If you are not a bigwavetrader yet, I am not sure why. My returns during the past bull market were better than the CANSLIM system which was ranked #1 out of 56 so that would put me #1 out of 57 and my current short returns I am pretty sure are destroying most that I see out there. Usually I am real humble. But after having back to back days with over 5% gains when the market is down 5% the past two sessions on the NYSE, I think I deserve to toot my own horn. If I don't do it, God knows no one else will. How can I be so consistently right yet go no respect by the major media. I guess you have to be a slave to OPM to get those gigs. ;) At least those of you with me know that when the bear ends and the bull begins we will all become very wealthy and will be at the top of the pile when this bear market gets done destroying this economy. Thanks SPENDINGULUS bill!

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