Big Wave Trading Portfolio Update And Top Current Holdings

The Big Wave Trading Model remains under a BUY signal with very little data weighing against its current signal. The stock market climbed higher, across the board, this week and despite the lower volume there remains very little to zero selling pressure in the current tape. Friday’s intraday action confirms that above analysis as a morning gap lower found support early on the SP-500 and DJIA and mid-day for the Nasdaq. This kind of action, following a gap lower, is very constructive and says a lot about the strength in this market considering how extended the major averages are from their respective 200 day moving averages. We are not in the business of attempting to call tops at Big Wave Trading. We simply move like water with the market. As the market’s trend flows upward, we will ride that wave accordingly. When the shift comes, we will be quick to hedge our positions and sell off securities that violate trailing cut loss levels or key moving averages. Despite the strong market and our success this year, we have no interest in trying to limit the gains by trying to anticipate a turn in the market here. Therefore, there is nothing to do here, currently, but ride the trend higher until it does turn. When we see another day like 5/22 we will start a hedge and then operate around that hedge according to the price action in the market. Right now, we have a lot of momentum inherent in this market and based on past historical strength like this, we expect more bases to be formed in the coming months and a resolution to the upside. However, we are not betting on this information and only using it as a possible guide to the upcoming rest of the year. If the market begins a selloff, starts making lower highs and lower lows, with leading stocks breaking down hard, we will be very quick to sell out our long positions and move to the short side. However, in this tape, betting on the short side has continuously been a losing proposition and not one we are interested in entertaining as long as the fed’s liquidity injections via POMO/ZIRP/QE continues. One day the uptrend will end and when it does the short side will be extremely profitable to trend traders. For now, though, the trend is up and I will be more than happy to ride it much higher if it does have much higher to go before the inevitable sell off happens. I would not mind at all if this market went parabolic before climaxing and reversing lower. It would make for a much more profitable venture for our current long positions and give us a better base to begin our short side work on. Right now, that is all forward thinking and planning. The reality of today is a market that is hitting new highs on low volume with no sellers above. To bet against a continuation of this trend would be to make a major gamble against history. One day we will not hit new highs. Until that day happens, I do not advise fighting this tape. I know a lot of traders that decided to do this on 5/22. I got a lot of messages and emails telling me that 5/22 was the top. How do you think these “traders” feel now? Based on my near 20 years of doing this for a living, I can tell you almost for sure that they more-than-likely still believe they are right. Too bad the stock market doesn’t care about what they believe. Either you want to be right or you want to make money. Which is it? I can tell you which one we focus on at Big Wave Trading. I hope you are choosing correctly. If not sooner or later your bottom line results will let you know if you chose correctly. Have a great rest of your weekend and I wish you all the best during this upcoming week. Aloha from the gorgeous island of Maui where all of us that live here are 100% grateful to call this our home. Top Current Holdings – Percent Gain Since Purchase – Date of Signal RVLT long – 196% – 3/26/13 CAMP long – 167% – 4/26/12 POWR long – 150% – 12/11/12 CSU long – 104% – 9/4/12 HEES long – 98% – 9/4/12 FLT long – 95% – 9/6/12 WAGE long – 86% – 1/8/13 ADUS long – 66% – 4/22/13 SBGI long – 63% – 3/22/13 INSM long – 61% – 4/19/13 WDC long – 59% – 1/9/13 TECUA long – 56% – 2/5/13 V long – 48% – 8/31/12 CHUY long – 46% – 1/10/13 MEI long – 43% – 4/10/13 GLL long – 42% – 2/14/13 LGF long – 37% – 4/19/13 PFBI long – 31% – 7/19/12 GMCR long – 31% – 4/23/13 WST long – 31% – 1/22/13 ADS long – 30% – 12/11/12

Big Wave Trading Weekend Portfolio Update And Top Current Holdings

It was a great week the past week on Maui and a good week overall for the stock market. The market did rally the past week but all the action came on below average volume until Friday when EOQ and EOM trading took over. As we know by now, from 1850-2008 this would be considered a bad thing but from 2008-now low volume rallies following heavy volume selloffs have been bullish. So I would not necessarily be too cocksure that the market is failing here at the 50 day moving average, just yet. While we are under a SELL signal, all it would take to switch back to NEUTRAL during the summer months would be a close above the 50 DMA on all three major market indexes (the Russell 2000 is already above the line). If that occurs, the situation will still remain fluid as there are a lot of individual stocks that need some work to clean up their current consolidation patterns. That being the case, we still have a lot of leading stocks making new intermediate term and new highs and plenty of stocks still forming decent consolidation patterns. When you combine this with the weakness in bonds, the higher amount of stocks hitting new lows, and the fact that the Fed is hinting at tapering and there are all sorts of legitimate reasons to remain very NEUTRAL here. And that is exactly where we are heading into this holiday short week. While we are under a SELL signal our personal feelings are extremely NEUTRAL on the current trend. I will have to either see more breakdowns or breakouts to move to either the bearish or bullish camp respectively. As of now, we just have too many crosscurrent and mixed signals to work with. This means new positions will remain small in individual stocks, on the long side, until a BUY signal is triggered or a “perfect” signal is triggered (extremely rare to almost non-existent during a SELL signal) in an individual stock. New positions on the short side remain scant to non-existent during this volatile period. However, as the market ticks down and ends weak each session we will continue to add to our current hedges that are being built in inverse leveraged long and leveraged short ETF positions. Enjoy the upcoming fireworks in the stock market and at your local hot spot. There is a lot of data coming out, around the world, during this short week so I am sure it will not be a boring one. But hell what do I know. Nobody, including myself, knows what tomorrow will bring. The future is absolutely impossible to predict. You can definitely game it and be ready for it but you can never know it. Aloha and have a wonderful holiday week. Top Current Holdings – Percent Gain since Signal – Date of Purchase CAMP long 159% – 4/26/12 RVLT long – 139% – 3/26/13 POWR long – 132% – 12/11/12 CSU long – 93% – 9/4/12 WAGE long – 90% – 1/8/13 FLT long – 82% – 9/6/12 ASTM short – 79% – 7/17/12 HEES long – 75% – 9/4/12 SBGI long – 66% – 3/22/13 GLL long – 60% – 2/14/13 ADUS long – 60% – 4/22/13 INSM long – 59% – 4/19/13 CHUY long – 53% – 1/10/13 TECUA long – 43% – 2/5/13 V long – 42% – 8/31/12 WDC long – 41% – 1/9/13 PFBI long – 28% – 11/19/12 MEI long – 26% – 4/10/13 WST long – 25% – 1/22/13

Big Wave Trading Portfolio Update And Top Current Holdings

The Big Wave Trading Portfolio remains under a NEUTRAL condition but did see the model switch to a cosmetic-SELL mode on Wednesday only to be flipped right back to NEUTRAL on Friday. This quick flip-flip was not shocking on a discretionary basis as the signal triggered with only the NYSE under the 50 day moving average. On top of that, as we have constantly warned, since 2011, SELL signals are going to have to be confirmed in all indexes, ETFs, inverse-ETFs, inverse-leveraged-ETFs, and with leading stocks breaking down, before any SELL signal is actionable on a position taking basis. QE, ZIRP, and POMO makes taking SELL signals nearly impossible and it is not anything we will be interested in seeing until we see a real parabolic/climax conclusion to all of this economy propping. Despite the fake signal, it was an overall decent week. The bad news is that our early hedges that were doing nicely hedging our longs by Wednesday left us with mostly losses by Friday. However, what turned out to be great news for us, on the flip side, we did not produce one single full sell signal on Wednesday, when our model did a false switch. The fact that the market cracked and we had zero sell signals in our long holdings was a hint that the market was stronger than the tape was letting on. On top of that, what turned out to be the worst missed trade on our end since 2011, we saw an extremely high quality long signal producing in what is currently a non-CANSLIM stock (it will be shortly in the upcoming quarters). That stock was TTS. The signal it produced that day would be considered an 8.5 out of 10 using our internal criteria and that is an extremely high rating on a new long signal (obviously 9s and especially 10s are very very rare). Unfortunately for me and my portfolios, we have never received such a beautiful signal on a day where we switched to a SELL mode. This has never happened. I began trading my trading career in 1996, went full-time in 1998, and from these moments have never seen such a signal on a day of a SELL signal. So what to do? Well, since I didn’t consider it “perfect” (a 9.5 or 10 out of 10) I decided to pass and let the model take control. That was a big big mistake as TTS has rocketed higher 13% in the two days following this lovely signal. On top of that, the SELL is now NEUTRAL. Lesson learned. What was the lessen? Well from now on I know that when the market is trending above the 50 day moving average on all of the most important major market indexes, we have many long positions holding up well in our current portfolios, we have many stocks still setting up in strong bases, we have very few stocks breaking down hard in my short scans, and we get a near-perfect high-quality long signal on a day when we do switch to a SELL we take the trade. Now, I have to watch TTS do what it is going to do and “hope” that it produces some sort of follow-up signal to try to get me long this wonderful pattern. We shall see if I get a second chance. I will not be holding my breath, however. Still, it was a very important lesson learned and goes to show that even with almost 20 years of full-time stock market experience you can still teach an old dog new tricks. Well played Mr. Stock Market. Well played. Big Wave Trading never needs to learn a lesson the hard way twice. Have a great upcoming rest of the week everyone. It’s been a nice weekend, despite the TTS missed trade on our end. Truth be told, I am more upset that the season finale of Game of Thrones is tonight than I am I missed that trade. As far as I am concerned, Game of Thrones, should never end and never go on break. Just keep the camera rolling and George R.R. Martin writing. Aloha!! Top Current Holdings – Percent Return Since Signal Date – Signal Date EAC long – 228% – 12/17/12 HIMX long – 185% – 12/19/12 CAMP long – 132% – 4/26/12 POWR long – 125% – 12/11/12 RVLT long – 114% – 3/26/13 CSU long – 107% – 9/4/12 FLT long – 95% – 9/6/12 HEES long – 82% – 9/4/12 ASTM short – 72% – 7/17/12 INSM long – 72% – 4/19/13 GNMK long – 71% – 11/16/12 WAGE long – 64% – 1/8/13 WDC long – 46% – 1/9/13 BBSI long – 45% – 2/13/13 ADUS long – 41% – 4/22/13 V long – 40% – 8/31/12 CHUY long – 40% – 1/10/13 SBGI long – 39% – 3/22/13 GMCR long – 35% – 4/23/13 TECUA long – 31% – 2/5/13 GLL long – 31% – 2/14/13 AMWD long – 30% – 2/1/13

Big Wave Trading Portfolio Update And Top Current Holdings

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

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

Due to the distribution this week in all of the major market indexes, the breakdowns in leading stocks, and constant lagging in the Russell 2000, the market direction model has switched to NEUTRAL on all major market indexes. The short-term current market environment has gotten choppy over the past few weeks and this action is definitely weighing on the model. The lagging Relative Strength of the Nasdaq and Russell 2000 has made this rally all year long suspect but our individual long signals continued to work relatively well despite this. This is more of a byproduct of our long signals coming from big-cap big-board indexes. However, the overall lagging action of the Nasdaq and Russell 2000 was always a cause for concern. It should not be assumed that since we are now under a NEUTRAL condition that the very next signal is going to be a switch to a SELL mode. While it does appear the market is finally ready for a correction based on the way stocks are acting post-earnings, there are still plenty of leading stocks that are clearly forming decent consolidation patterns. A market reversal back to new highs would have many of these stocks easily breaking out of their current consolidation pattern. Therefore, it is best to remain very neutral here and wait to see which way the market breaks out of this consolidation zone the Nasdaq, Russell 2000, and SP 500 are in before convicting oneself to one side or the other of this market. We will continue to play individual stocks as they produce signals in either direction, keeping capital very limited in our selections during this bifurcated US economy and stock market. As long as the market rallies overall on low volume, it is going to be very hard to go 5%, 10%, and science forbid 20% long on a new long or short signal. We will just have to keep taking what the market gives us, either concentrating heavily into the best leading stocks in leading industry groups like Biotechs or keeping individual plays at a minimum with tight stops. The most important play for us right now is to continue to have a lot of cash on hand in case we get a screaming signal to the short side signaling that this market is done on the upside. The other scenario is having a lot of cash on hand in case the market breaks out higher and we get our once-reliable extremely strong price/volume signal to get heavily long a handful of leading stocks. While the latter scenario seems quite implausible it is still a possibility. However, truth be told, we are really waiting to hammer this market on the short side once it becomes apparent the QE low volume stock market manipulation rally is coming to an end. We might still be three years away from that though. Until then, we will ride the bucking bronco. Have a wonderful and profitable upcoming week everyone. Try not to psychoanalyze everything out there too much. Aloha! Top Current Holdings – Percent Gain – Date of Signal EAC long – 154% – 12/17/12 HIMX long – 130% – 12/19/12 CSU long – 96% – 9/4/12 POWR long – 87% – 12/11/12 CAMP long – 69% – 4/26/12 GNMK long – 69% – 11/16/12 FLT long – 65% – 9/6/12 ASTM short – 64% – 7/17/12 HEES long – 58% – 9/4/12 SBGI long – 41% – 3/22/13 WAGE long – 38% – 1/8/13 CPSS long – 35% – 1/31/13 BBSI long – 34% – 2/13/13 PFBI long – 29% – 11/19/12 AXLL long – 28% – 1/4/13 GLL long – 28% – 2/14/13 V long – 27% – 8/31/12 CHUY long – 25% – 1/10/13

Big Wave Trading Portfolio Update And Top Current Holdings

The Big Wave Trading Model switched back to a BUY mode on 3/5/13 following a switch to a NEUTRAL mode on 2/25/13. The switch to NEUTRAL on 2/25/13 in our analysis of over 130 years of stock market history should have not switched back to BUY mode so quickly. The price breaks on 2/20 and 2/25 have historically led to months of choppy trading or started downtrends outright. The fact that we switched back to BUY mode so soon is historically extremely out of the norm. However, this entire market choppy and slow uptrend from the 2009 lows coming on such below average weekly and monthly volume is also historically extremely out of the norm. Huge volume selloffs are quickly absorbed and new highs, not on higher volume but, on lower volume are soon followed. As we have stated before, nowhere else in the history of the United States stock markets can you ever find this trend. Low volume rallies have always been quickly destroyed by higher volume selloffs or do not last long and are followed by heavier volume accumulation to the upside. The odds times continue. On that note, that means the only logical thing to do is to follow price here and be very careful with the size of long commitments. While Big Wave Trading misses the days when we plunged on margin, today’s market environment does not bode well for that type of investing. A more conservative approach is respected here knowing that a 2010 and 2011 shock experience is always just around the corner with a low volume market rally. Therefore, we will continue to operate on the long side enjoying the paltry gains we see below (paltry in comparison to the gains we produced before the QE and ZIRP world we have been living in since March 2009), until a clear trend change becomes apparent. For now, the trend is up. We will obey our master–Price. Top Current Holdings – Percent Return – Date of Signal CSU long – 115% – 9/4/12 CAMP long – 95% – 4/26/12 HIMX long – 84% – 12/19/12 HEES long – 71% – 9/4/12 EAC long – 65% – 12/17/12 POWR long – 64% – 12/11/12 FLT long – 58% – 9/6/12 AXLL long – 36% – 1/4/13 WAGE long – 34% – 1/8/13 PFBI long – 31% – 11/19/12 CHUY long – 29% – 1/10/13 CPSS long – 26% – 1/31/13 V long – 25% – 8/31/12 GNMK long – 25% – 11/16/12