Big Wave Trading Portfolio Update And Top Current Holdings

Aloha everyone. The Big Wave Trading model is in a mixed variety of signals, with the Nasdaq currently under a BUY signal, the SP500 and Russell 2000 are under a NEUTRAL signal, and the DJIA is under a SELL signal. It is not too often you will see us under all three signals at once but here we are. Overall, the market does have the “feel” of a market that is ready to launch higher. The reasoning behind this is our analysis of leading stocks, leading industry groups, speculative stocks, and the technical condition of the overall market. Right now, things look really good for a continuation in prices in the uptrending direction. We are basically fully invested here, with only a small hedge working in the SDOW. This position will be closed out, obviously, if we switch back to a NEUTRAL or BUY signal in the Dow. We are not fully invested based on what we believe or think the market will do. We are fully invested because so many leading stocks have triggered legitimate buy signals that we have utilized all our capital. Do you know what year it was the last time I was all out of cash to deploy in the market? 2003. So the thinking is that based on past analysis the rest of the year should be solid. Still, do you think we will not sell EVERYTHING if the market tells us to? You know we will. If the market reverses, sell limits or hit, or our big winners reverse on huge volume, trust me we will not waste any time running to the exits and reversing our positions to the short side via leveraged ETFs. At Big Wave Trading the most important thing is to be prepared for everything. Nothing in life is ever guaranteed. Shock events and black swans show up all the time. However, we would like to point out a correlation between the current market and that 2003 market that remains my best trading period ever in my life. In 2003 we went into Iraq. Now it is 2013 and we are going into Syria. Is history repeating itself again? Probably not. But it sure is rhyming. Have a wonderful upcoming week. I wish you all the best. Aloha from Maui. TOP CURRENT HOLDINGS – PERCENT GAIN – DATE OF SIGNAL CAMP long – 202% – 4/26/12 WAGE long – 145% – 1/8/13 FLT long – 132% – 9/6/12 POWR long – 123% – 12/11/12 HEES long – 103% – 9/4/12 INSM long – 102% – 4/19/13 MEI long – 92% – 4/10/13 ADUS long – 81% – 4/22/13 LGF long – 54% – 4/19/13 WDC long – 48% – 1/9/13 GMCR long – 46% – 4/23/13 CHUY long – 42% – 1/10/13 TRLA long – 38% – 6/28/13 V long – 37% – 8/31/12 ADS long – 37% – 12/11/12 OCN long – 37% – 5/8/13 DDD long – 35% – 4/30/13 CCF long – 34% – 6/28/13 WST long – 34% – 1/22/13 LOCK long – 33% – 5/20/13 BEAV long – 31% – 3/5/13

Big Wave Trading Portfolio Update And Top Current Holdings

The Big Wave Trading portfolio remains under a BUY signal with only a minor amount of pressure on the indexes following the weak price action on Tuesday and Wednesday in the overall market. Besides that there is no pressure in our model as leading stocks, speculative stocks, and the overall market continue to trend higher in lockstep. With this being the case, it does not make much sense to drone on and on about the minute details of the trading action the past week. It was a very successful week in terms of playing straddles/strangles before earnings on a few stocks like FB, BIDU, and TRIP and buyable gap ups remain the best way to return alpha in this low volume uptrending market. Overall, it was a decent week with not much to dissect or psycho-analyze. There is no need to waste any more of your valuable weekend time. Enjoy the rest of your weekend and I wish you the best during the upcoming week. Aloha!! Top Current Holdings – Percent Gain since Signal Date – Date of Signal RVLT long – 191% – 3/26/13 CAMP long – 167% – 4/26/12 POWR long – 143% – 12/11/12 FLT long – 103% – 9/6/12 CSU long – 91% – 9/4/12 HEES long – 91% – 9/4/12 WAGE long – 90% – 1/8/13 SBGI long – 64% – 3/22/13 ADUS long – 64% – 4/22/13 INSM long – 50% – 4/19/13 V long – 50% – 8/31/12 TECUA long – 47% – 2/5/13 WDC long – 42% – 1/9/13 MEI long – 41% – 4/10/13 LGF long – 38% – 4/19/13 CHUY long – 37% – 1/10/13 GLL long – 34% – 2/14/13 GMCR long – 34% – 4/23/13 ADS long – 32% – 12/11/12 PFBI long – 31% – 11/19/12 WST long – 30% – 1/22/13 BEAV long – 28% – 3/5/13 CCF long – 26% – 6/28/13 DDD long – 25% – 4/30/13

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 Portfolio Update And Top Current Holdings

The Big Wave Trading portfolio is currently under a BUY mode across the board, with the Nasdaq fully switching to a BUY signal on the 9th with the SP-500 and DJIA following on the 11th. These indexes now join the Russell 2000 which was placed under a BUY signal last Friday. The Russell 2000 is leading the current model switch and was able to build on the gains nicely the past week. Every index performed well this past week. It was nothing short of extremely impressive. What makes it even more impressive is that the rally in the overall market is on fumes. That goes for many recent breakouts in high priced highly liquid CANSLIM quality securities. Don’t get me wrong, there are plenty of leading stocks breaking out on volume. However, there have been too many TSLA, SPWR, PCLN, GOOG, AMZN, MCD type moves for my personal liking. At the same time, while I may not like it, it doesn’t matter. Those that are focusing on price action alone in leading stocks are enjoying their gains as long as they are buying at the exact pivot points in their technical consolidations. For those that can not watch the action all day, I will remind you that you can use buy stops to buy a stock as soon as it breaks out to new price highs. Even with the overall low volume, the rally is still impressive. Many stocks are moving higher on volume and many others are setting up in price consolidation patterns with solid accumulation/distribution patterns. I am sure that even if the market pulls back here, knowing that the Fed is in full-on QE/ZIRP/POMO mode, support should be found in the overall market. This hypothesis is based on the current technical patterns remaining as they are and in turn developing into even more bullish technical patterns in the upcoming weeks. If individual stock price patterns falter, this assumption on price action will be nullified. Still, the trend with POMO/QE/ZIRP is very clear. Pullbacks are to be bought and stocks can not sell off more than 10%. That will definitely change one day and this will definitely lead a lot of people that are greedy into the poorhouse but until then you simply can not fight the overwhelming trend. Calling tops has been killer to traders the past five years and yet I still see constantly on stock twits and facebook. It was not too long ago on 5/22 that so many new traders/investors were confident this market had top. Now these same traders find themselves underinvested and/or not invested at all. This is the purpose of the market. It is there to fool most of the people most of the time. Looks like they were fooled again. This is why in times like this, if you do not have a system, and invest on emotions, you are going to have a bad time. Emotions are a killer in the stock market. They can only hurt returns over the long run. You must learn to eliminate them, if you are going to learn how to hold stocks like the stocks you see listed below for the big long-term gains. The big money will always be in the sitting and in this market sitting has never been harder. Trust me. I don’t even come close to seeing the gains I saw in my personal accounts from 1998-2008. On top of that, stocks simply do not move like they used to. Compare the performances below to some of my past big winners and you will see times have changed. One day they will go back to normal. However, until that day happens, it is what it is and price action is all that matters. The trend is your friend until it bends at the end. Make sure that you don’t show up late to the trend and ride it lower when it bends and all the smart money is exiting. The Nasdaq has been up 12 of the past 13 stock market sessions yet I see many traders looking to get heavily long here. Seems a tad late to me. However, what do I know compared to what the market knows? The exact same thing you know. Nothing. The market discounts all. Price action is all that is real. Continue to follow price and ignore volume. In this QE world it is leaving many traders underinvested. You must learn to discount it. Have a great rest of your weekend and a wonderful upcoming week. Make sure you obey your systems, especially your stops. Always cut your losses short. Never ever ride a losing position and never ever add to a losing position. Especially in a melt-up tape like we have now. PS: Can you tell I just got done reading my third Jesse Livermore book of the summer? It is an annual ritual. I recommend it both for new and experienced traders. Once again, have a great weekend. Aloha from Maui!! Top Current Holdings – Percent Gain Since Signal – Date Of Signal CAMP long – 181% – 4/26/12 RVLT long – 165% – 3/26/13 POWR long – 150% – 12/11/12 CSU long – 107% – 9/4/12 HEES long – 95% – 9/4/12 FLT long – 93% – 9/6/12 WAGE long – 90% – 1/8/13 ADUS long – 86% – 4/22/13 SBGI long – 71% – 3/22/13 CHUY long – 69% – 1/10/13 WDC long – 54% – 1/9/13 TECUA long – 49% – 2/5/13 V long – 48% – 8/31/12 GLL long – 47% – 2/14/13 INSM long – 44% – 4/19/13 MEI long – 40% – 4/10/13 LGF long – 39% – 4/19/13 ADS long – 31% – 12/11/12 WST long – 30% – 1/22/13 DDD long – 27% – 4/30/13 BEAV long – 26% – 3/5/13

Big Wave Trading Portfolio Update And Top Current Holdings

The Big Wave Trading Portfolio is under multiple signals currently, as small caps are significantly outperforming big caps. Overall the Model is weighed mixed BUY to NEUTRAL with the Russell 2000 being under a clear BUY signal, the Nasdaq under a BUY/NEUTRAL signal, and the SP-500, DJIA, and NYSE being under NEUTRAL signals. For what it is worth, the Nasdaq will switch to a BUY mode with a new high printed on the index, with or without volume. As has been mentioned here every weekend since May 22nd, all signals should be taken with a grain of salt during choppy summer time sessions where volatility increases. This also being a QE/POMO market, all SELL signals must be taken with baby steps until a clear roll over on heavy volume is triggered in all major market indexes, leading stocks, ETFs, inverse ETFs, leveraged ETFs, and inverse leveraged ETFs. Unless there is a complete confirmation, funny money printed by the Federal Reserve will continue to act as a floor. In time that will change but for now betting against that trend is foolhardy. With the switch in the Russell 2000 to a BUY mode and a switch in the Nasdaq to a BUY/NEUTRAL mode, we can now operate a little bit more aggressively on the long side in small cap and technology related positions. We are also taking off our remaining hedges and are now only long individual stocks in the managed accounts. If the market decides to roll back over, we will not hesitate to start building our hedges once again. The biggest lesson to be learned this past week is that trying to call or predict a top in this market is, for now, not a very profitable methodology when the tape is dead. The saying “never short a dull market” comes to mind, first off. Second, “never short a QE/POMO market” follows right behind. The bottom line is that is just does not pay to be a “committed” bull or bear. This market remains very unfriendly to trends and trend followers, overall, and staying constantly neutral and flowing like water is the best advice I can give to anyone trying to navigate it. Overall, it is shaping up to be another no-to-low volume rally, following an above average volume sell off. This pattern was never sustainable before 2008 and now it is the norm for the past three years in a row. It is what it is. OK, it’s time for me to catch one last round of the nine-day swell that has been hitting my backyard in Lahaina. While the market hasn’t been full of action for trend followers lately, at least the Pacific Ocean has been for surfers. If you can’t ride one wave, ride another. Have a great post-holiday weekend. Aloha from Maui!! Top Current Holdings – Percent Gain since Signal – Date of Signal CAMP long – 175% – 4/26/12 POWR long – 140% – 12/11/12 RVLT long – 124% – 3/26/13 CSU long – 100% – 9/4/12 WAGE long – 93% – 1/8/13 FLT long – 89% – 9/6/12 ASTM short – 81% – 7/17/12 HEES long – 80% – 9/4/12 CHUY long – 68% – 1/10/13 SBGI long – 62% – 3/22/13 GLL long – 58% – 2/14/13 ADUS long – 52% – 4/22/13 V long – 48% – 8/31/12 WDC long – 47% – 1/9/13 TECUA long – 46% – 2/5/13 INSM long – 38% – 4/19/13 MEI long – 37% – 4/10/13 LGF long – 31% – 4/19/13

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, following a week of choppy price action. The overall market continued its choppy trading the previous week with neither the bulls or bears asserting any real directional power. The bottom line is that we remain trapped between the recent highs and lows of all the major market indexes during the past month. Our model will not move to either a BUY or SELL mode until this trading range is broken. The other possible model change could occur if the indexes make a powerful one day price move on higher volume. If that occurs and the indexes still remain range bound it is possible, if there are leading stocks in confirmation of the move, that we could switch before the trading range is resolved. If we were forced to make a bet on which way the market is going to break next, we would laugh in the face of someone suggesting such a preposterous notion. However, if we were asked to analyze the current situation of leading and other individual stocks in relationship to the pullback in the overall indexes, that would be a welcome logical request. When it comes to leading stocks in the market, based on EPS and RS ratings, everything is crawling along well. Our current holdings and leading stocks have done remotely well during the pullback in the market, with many of these stocks forming constructive consolidation patterns that historically should lead to further price breakouts. Some of our favorite examples include SCTY, TSLA, TNGO, DPZ, INVN, BLMN, SWHC, LNKD, and many others. These stocks are either consolidating nicely or are trending higher, despite the weak market. This, in our analysis, is a positive sign for a possible resolution higher. This being said, nothing is concrete and for all we know the market might break out to new highs to just reverse lower on huge volume. The point is that anything can happen in the stock market and if you are not ready for anything and everything, then at some point you will be caught off guard and pay the price. We shall see what the upcoming week has in store for all of us traders. As it stands, we continue to be very neutral here ready for anything to happen. Once again, based on our current holdings and leading stocks, we should expect a resolution higher. In reality, however, remember, anything can happen and everything must be prepared for. Have a wonderful rest of your weekend. Aloha from a very beautiful, warm, and sunny west side of Maui. Aloha!! Top Current Holdings – Percent Return Since Signal Date – Date of Signal RVLT long – 162% – 3/26/13 EAC long – 156% – 12/17/12 CAMP long – 136% – 4/26/12 POWR long – 135% – 12/11/12 CSU long – 106% – 9/4/12 FLT long – 97% – 9/6/12 HEES long – 86% – 9/4/12 ASTM short – 73% – 7/17/12 INSM long – 68% – 4/19/13 WAGE long – 63% – 1/8/13 ADUS long – 59% – 4/22/13 CHUY long – 55% – 1/10/13 SBGI long – 50% – 3/22/13 WDC long – 45% – 1/9/13 V long – 41% – 8/31/12 GMCR long – 39% – 4/23/13 BBSI long – 38% – 2/13/13 TECUA long – 36% – 2/5/13 GLL long – 27% – 2/14/13 PFBI long – 26% – 11/19/12 DDD long – 25% – 4/30/13

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 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 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

S&P 500 Hits another High as Crude Oil Nears $100

Once again buyers support the market at the lows. It has been the trend as of late to find buyers as the market appears to be in free fall. Positive data from Case-Shiller did help the mood. Volume rose on the day across the board showing institutions were quite active in the market. Technology stocks, despite AAPL finishing in the green had a tough day with the likes of VMW, WDC, and STX had tough days. This market continues to hit new highs despite “overbought” conditions. The market now turns its attention to tomorrow’s release of fourth quarter GDP and the FOMC meeting minutes. Tomorrow will be a big day for the market with GDP and the Fed. Fed days are always fun with wild intraday swings. GDP estimates range between 1.1-1.5%, but even if GDP prints at 1.5% is still very pathetic. Despite all the Fed’s interventions the economy can only grow at 1.5% is really pathetic. The market may continue its trend tomorrow regardless of the GDP print. Knowing what the GDP figure will be won’t help you in tomorrow’s market. We could guess if the Federal Reserve does not change its language in its policy statement the market will continue higher. If the Fed hints at winding down its massive asset purchase program may be a reason for a decline, but it is anyone’s guess. We continue to be in an uptrend and until we get our sell signals we’ll stay on the long side of the market. We still have a few minor hiccups in the market right now. VMW, WDC, and STX were sore spots on the day and even with good earnings from F the stock couldn’t find buyers supporting higher prices. YHOO posted good results, but the stock gapped to the upside only to find itself lower on the day. Perhaps we are seeing some exhaustion, but not nearly enough to trigger a sell signal. Stay disciplined and keep your emotions in check! Short-term trends: TICKER ST TREND TREND CHANGE DATE CLOSE % SPY UPTREND NO CHANGE 1/29/2013 150.66 0.39% IWM UPTREND NO CHANGE 1/29/2013 90.05 0.06% QQQ UPTREND NO CHANGE 1/29/2013 67.16 0.01% USO UPTREND NO CHANGE 1/29/2013 35.29 1.00% UNG UPTREND NO CHANGE 1/29/2013 18.36 -1.02% GLD UPTREND NO CHANGE 1/29/2013 160.99 0.44% SLV UPTREND NO CHANGE 1/29/2013 30.32 1.57% DBC UPTREND NO CHANGE 1/29/2013 28.16 0.57% FXY DOWNTREND NO CHANGE 1/29/2013 108.05 0.07% FXE UPTREND NO CHANGE 1/29/2013 133.86 0.27% TLT UPTREND NO CHANGE 1/29/2013 117.6 -0.55% Crude oil – USO saw a big jump today along with SLV. Rising commodity prices will certainly squeeze the American consumer. Stay tuned.