Big Wave Trading Portfolio Update And Top Current Holdings

The Big Wave Trading Directional Model has switched from a BUY signal to a NEUTRAL signal, following the final hour of action during Friday’s stock market session. The vicious sell off on Friday, combined with the churning and distribution days adding up this month, is more than enough evidence that it is time to be fluid and ready for a move in any direction in the overall market. Longer-term there is a lot of support in the overall market that could easily lead us to further upside price. However, on the short-term we are indeed extended on all major market averages in relation to the 200 day moving average. The Nasdaq and Russell 2000 also remain a bit extended from their respective 50 day moving averages. Therefore, a pull back here is not a surprise and is in fact welcomed if we want to continue with higher prices in a more measured and somewhat safe manner. What will be more important to watch from here on out is how the major indexes will act around these key averages. Support at these key areas, along with high quality stocks showing Relative Strength to the overall market, would be indicative of a market that wants to continue higher over the intermediate term. If, instead, the market decides to find some support, begin to bounce, and then rolls over below the 50 day moving averages on the indexes, then we can start to prepare for some form of correction. Right now, most of our long positions (you can see 75% of our current holdings below as 3/4 of our portfolio holdings are up 25%+ per trade), are riding their key moving average lines higher and if they start to break below we will continue to take profits, cut our losses, and add to our hedges. Right now, since we are heavily long, we have been building a hedge in case the market does decide to correct harshly over the next couple of weeks. If the market decides to move lower, we will continue to pair back our long positions and add to our hedges. If the market decides to roll over and enter a prolonged downtrend, we will be ready via our market direction model and we will go short stocks that produce short signals accordingly. For now, it is best to be ready for anything. Emotions are very strong for those in the bull and bear camp. That can cause some extreme short-term price movements, as we saw in the final hour on Friday. Therefore, the best plan is to have a plan for every outcome. We do this on a daily basis at Big Wave Trading and that is why you will find very little to zero emotions involved in our methodologies. It is all about price signals. It is never about opinions or emotions. The only good opinion is no opinion, in the stock market. Have a great weekend everyone. It looks like our summer shores are in store for another large swell. Good news for me. Once again, have a great weekend. Aloha!!! Top Current Holdings – Percent Return – Signal Date EAC long – 204% – 12/17/12 HIMX long – 201% – 12/19/12 CAMP long – 134% – 4/26/12 RVLT long – 128% – 3/26/13 CSU long – 112% – 9/4/12 POWR long – 108% – 12/11/12 FLT long – 95% – 9/6/12 HEES long – 86% – 9/4/12 INSM long – 79% – 4/19/13 ASTM short – 71% – 7/17/12 GNMK long – 71% – 11/16/12 WAGE long – 60% – 1/8/13 SBGI long – 48% – 3/22/13 ADUS long – 45% – 4/22/13 WDC long – 44% – 1/9/13 CHUY long – 39% – 1/10/13 V long – 38% – 8/31/12 BBSI long – 38% – 3/22/13 PFBI long – 31% – 11/19/12 GMCR long – 30% – 4/23/13 GLL long – 30% – 2/14/13 AMWD long – 28% – 2/1/13 DDD long – 26% – 4/30/13

Big Wave Trading Portfolio Update And Top Current Holdings

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

Big Wave Trading Portfolio Update And Top Current Holdings

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

Big Wave Trading Portfolio Update and Top Current Holdings

The Big Wave Trading Portfolio remains under a BUY signal re-triggered on 3/5/13 following the original signal on 1/2/13. There are currently zero conditions weighing on the model, despite the below average volume. Any assumptions and presumptions we have towards the current volume on the rally have been eliminated due to the QE and ZIRP policy being initiated by the Federal Reserve. We continue to go long signals as they arise and will not try to guess when the market will “top” or “pull back.” At this point the only signal that we are paying attention to is price. Price is the only thing that matters, as we have been saying all year long. Volume has not mattered on rallies in four years and there is no reason to believe it will matter any time soon. While it would be nice to see the market pullback for more than a couple of weeks on below average volume and then rally on higher volume it should not be expected. What seems most plausible given the situation that is occurring world wide is that we will end up in another asset bubble where higher valuation multiples are placed on stocks. Despite the lower earnings growth expectations investors are still paying higher prices for stocks believing that the Federal Reserve has eliminated the tail ends of the curve. As all experienced traders know this will eventually end badly. However, that is not happening yet and the only thing we can do is ride the trend until the end when it will bend. If another asset bubble is to occur we are in great position to profit handsomely and then will be in a better position to sell our winners as they break below key trailing moving averages on heavy volume. If the market can get parabolic that will allow us better entries on the short side (puts). For now, there is nothing to do but continue to follow price. As you can see below, following a very choppy 2011 and 2012, it is finally paying off like it normally has for us at Big Wave Trading. Someone asked recently that if the stocks below are our top holdings (top 50%) what are our our worst holdings. We currently have two. Both are automobile related equities and both are showing less than a 1% loss apiece. We do not hold losing positions at Big Wave Trading. Before any order is given to our brokers we know where we will exit if we are wrong. We religiously obey our final exits. We never let a loss run and are quick to leave if we are not proven correct immediately. As we go through equity/derivative drawdowns like we did in 2011 and 2012 we reduce the size of our positions and are quicker to cut losses. As our equity/derivative profit/loss line trends higher we will subsequently increase size and allow more “wiggle” room in our trades. The bottom line is that losses are never tolerated. They are always eliminated. No excuses. Have a great rest of your long holiday weekend everyone. Aloha from a very, yet again, windy and overcast Maui. Top Current Holdings – Percent Gain – Signal Date HIMX long – 127% gain – 12/19/13 CSU long – 113% gain – 9/4/12 EAC long – 98% – 12/17/12 POWR long – 96% – 12/11/12 CAMP long – 95% – 4/26/12 FLT long – 72% – 9/6/12 CPSS long – 70% – 1/31/13 HEES long – 70% – 9/4/12 ASTM short – 64% – 7/17/12 GNMK long – 48% – 11/16/12 AXLL long – 46% – 1/4/13 MNTX long – 43% – 1/17/13 WAGE long – 38% – 1/8/13 V long – 32% – 8/31/12 CHUY long – 30% – 1/10/13

Big Wave Trading Portfolio Update And Top Current Holdings

The Big Wave Trading Portfolio remains under a BUY signal, as the market consolidated recent gains the past week. Volume was lower overall for the week and that is always bullish for a continuation of a trend. Unfortunately, when the market rallies it rallies on below average volume. The good news the past week was the selling volume was also below average. This action the past week has helped form a lot of solid consolidation patterns out there and two stocks that are on watch from the 3D printing arena include DDD and SSYS. If the market decides to move higher those two stocks will definitely be closely followed. On top of that, there are plenty of other stocks forming constructive weekly consolidation patterns. If the market breaks out to new highs here, expect these stocks to follow. Another positive for the market was the inability to really sell off following the Cyprus and Eurozone news all week long. The fact the market held up so well, despite this development, is a testament to the power of worldwide QE. When the market does not sell off on bad news, that is always a short-term bullish development. The other side, of course, is that a market that sells off on good news is a market flashing that it is in trouble. So, so far, so good. As long as leading stocks continue to do well and trend higher there is nothing to do but to follow the trend until it ends. While we are long a lot of stocks doing very well, we have our trailing moving averages to tell us when to get out partially or completely. To think that any emotion is involved in our current long positions is a grave mistake. We do not have emotions in regards to the stock market at BWT. We only have quantitative signals. Nothing more and nothing less. When we are wrong we cut our losses immediately like in a recent long signal generated in WNC on 3/15 that we had to reverse on 3/19. The good news about that loss is that the stock is now setting up in an even more constructive consolidation pattern thus making the next long signal a higher reward to risk ratio setup. On that same note, however, a further follow-through on the recent breakdown below the 50 day moving average will have WNC completely wiped off our watchlist for now. OK everyone. Try not to get caught up in all the Euro news dramafest this upcoming week, let your winners run and cut your losses short, and most importantly have a great rest of your weekend and upcoming week. Aloha. Current Top Holdings – Percent Return – Date of Signal CSU long – 104% – 9/4/12 EAC long – 92% – 12/17/12 CAMP long – 90% – 4/26/12 POWR long – 80% – 12/11/12 HIMX long – 76% – 12/19/12 FLT long – 70% – 9/6/12 HEES long – 69% – 9/4/12 CPSS long – 56% – 1/31/13 AXLL long – 46% – 1/4/13 WAGE long – 42% – 1/8/13 ASTM short – 41% – 7/17/12 GNMK long – 38% – 11/16/12 MNTX long – 36% – 1/17/13

Big Wave Trading Portfolio Update And Top Current Holdings

The Big Wave Trading Portfolio remains under a strong BUY signal generated at the start of the year. There continues to be absolutely no sign that the market is finished with its steady and unusual move higher. Trying to guess when the move will end is futile and until we see real cracks in the price/volume armor there is nothing to do but to continue to ride the trend higher until it shows signs of reversing. Those signs that we will be looking for include: 3 to 5 distribution days in 2 to 3 week time span on the indexes, climax runs in leading stocks, new highs in leading stocks on higher volume, huge volume reversals below the 50 DMA, a lack of new breakouts in quality names, and/or breakouts in quality names immediately reversing on heavier volume. Until we start to see a variety of the list above, we will continue to hunt for new long positions as they setup and breakout from sound consolidation patterns. However, we will continue to remain cautious on our purchases as the markets uptrend is without a doubt the most strange steady move higher I have ever seen or I believe studied in my career. While I have not backtested the data, the price pattern the past month and a half has been beyond unusual. To rally almost every day without having an up session above 1.25% is just the strangest thing I have seen to a start of a sustained uptrend. If you want to see how a real powerful rally looks that allows us to get 100-200% invested very quickly take the time to study the Nasdaq March 2003 low or the recent Shanghai SE Composite December 2012 low. That is what the start of real lasting powerful bull markets look like. They do not look like what we currently have in our indexes. I continue to refuse to increase the size of any new long position to the normal pre-2009 levels as long as we continue this strange wedging pattern higher. The longer we go without a normal correction or the longer we go without producing another powerful up day (I am looking for at least 1.5% and would really like to see a 2% move) on strong volume the higher our chances become of some sort of flash or quick crash that could easily wipe out our post 1/2/13 gains in a couple to a few trading sessions. The longer we wedge like this, without a powerful up day, the more concerned I will become and the more careful we will be of adding new long positions. This continues to be a pure-QE fueled uptrend and that is evident in the volume patterns on the indexes, ETFs, and leveraged ETFs. Volume is simply not confirming the move as it should if the uptrend was “normal.” So that is what we are “worried” about here. While it is something we are concerned about, we will continue to take signals as they are generated making sure that our opinions have nothing to do with the actual execution of our methodologies. A quick reminder to new investors. Big Wave Trading always and I mean always removes risk when we are wrong on any and all positions. Losses are never held. If we take a position and it violates our clear stop level, the position is liquidated immediately. Losses are never justified or held. Ever. Period. Big Wave Trading also employes historically sound profit taking methodologies created and proven by some of the best traders and managed futures funds since the dawn of time. If you are not familiar with these methodologies, we recommend going to the book section (which has not been updated in a few years–we will be doing that soon) on our website and purchasing these books to understand the methodologies that we incorporate in our portfolios. Aloha from a very cold, windy, and shockingly rainy west side of Maui. Have a great and profitable upcoming week. Once again, aloha. Top Current Holdings – Percent Return – Date of Signal CSU long – 77% – 9/4/12 CAMP long – 72% – 9/4/12 HEES long – 64% – 9/4/12 EAC long – 61% – 12/17/12 FLT long – 54% – 9/6/12 AXLL long – 40% – 1/4/13 ASTM short – 36% – 7/17/12 POWR long – 35% – 12/11/12 CPSS long – 33% – 1/31/13 MNTX long – 31% – 1/17/13

Big Wave Trading Portfolio Update And Top Current Holdings

The Big Wave Trading Portfolio remains under a strong BUY signal from 1/2/13. There remains absolutely zero indications, via price action, that there is anything to do but ride the trend higher here. Despite the constant discussions of what is wrong with this rally and how extreme it is (we will go over that below), stocks continue to breakout from solid consolidation patterns with other stocks either trending up since breaking out or consolidating in preparation for possible breakouts. As long as we continue to see high quality stocks setup, consolidate, and breakout, we will remain buyers, despite the “overbought” conditions of the market. And trust me we are extremely aware about them at Big Wave Trading. While we remain buyers of stocks “up here,” we are being very selective and using appropriate capital for a market so extended. If we had more of our current holdings looking like they were putting in climax or parabolic type runs we would be more worried and would begin to hunt for protective put positions in the indexes. However, our longs continue to act orderly and do not exhibit the patterns seen at a market that is doomed to soon top. It still very well could but the price action in the market and stocks does not suggest that. We read all the headlines. We see all the news. For instance, 3-month sum mutual fund and ETF inflows are at 10 year highs, weekly mutual fund inflows are at 13 year highs, mutual funds have the least amount of cash on hand in 50 years, the VIX is too low at 13, the bulls are dominating the bears on the II (55 vs. 21) and AAII (43 vs. 30) surveys, and stocks are overbought on short-term oscillating indicators. That is all fine and well and we definitely take all bit of information into consideration as we prepare for the inevitable pullback. However, until it actually happens, there is no reason to take defensive measures now by selling stocks or eliminating new long positions. Imagine not buying the gap up in LNKD on Friday because you thought the market was too high. It clearly didn’t care what you thought and proceeded to move higher throughout the session. Therefore, until we get our 3-5 churning or distribution days in the market over a period of 2-4 weeks, we will continue to take long signals but keep the new positions relative to the overall safety of their pattern and the continuation of the overbought market. When the tide changes, we will take our profits when our signals are triggered and will add some protective put positions. Until then, the trend has been our friend throughout 2013 so far and until that changes it is wise to remain its friend. It will change. That you can be sure of. As of Friday, however, it is still up across all major market averages. Have a great rest of your weekend everyone. I wish you a very profitable upcoming week. Aloha from a very warm and sunny Maui. TOP CURRENT HOLDINGS – PERCENT RETURN – DATE OF SIGNAL CSU long – 70% – 9/4/12 CAMP long – 66% – 4/26/12 HEES long – 65% – 9/4/12 FLT long – 48% – 9/6/12 EAC long – 43% – 12/17/12 VRNM short – 43% – 4/10/12 POWR long – 39% – 12/11/12 ASTM short – 32% – 7/17/12 MNTX long – 31% – 1/17/13 AXLL long – 29% – 1/4/13 CPSS long – 25% – 1/31/13