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

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

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