Stocks Close off the Highs but in the Green as AAPL and AMZN report Earnings

Another day and another rally attempt failing to hold the morning gains as stocks close just off the lows of the session. Oversold conditions can produce multi-day rallies, but today ahead of AAPL and AMZN the market was unable to hang onto gains. Jobless claims and new home sales weren’t overly inspiring, but weren’t awful either. During the session as stocks sold off a rumor surfaced Fitch was about to downgrade the United States, but was untrue. How this country will pay off this debt without making a sacrifice is beyond me. How any agency would have our debt rated AAA is baffling. At the end of the day the market as able to close in positive territory, but tomorrow’s GDP report looms over the market. During the after-hours session the two big stocks the market was looking at was AAPL and AMZN. Both stocks have taken a beating prior to their earnings report. First up was AMZN and at one point was down below 208 a share. It closed the after-hours session above 220. The move off the lows of the after-hours was quite interesting considering AMZN continues to disappoint. AAPL reported earnings and the reaction to the news was less dramatic than AMZN. Whether or not we feel the earnings was bad or good tomorrow’s reaction will be the most important piece for us. Tomorrow’s GDP report will be the highlight of CNBC’s morning. There will be no doubt an endless discussion on what it means for the market and of course the economy. Remember, one week from tomorrow we’ll get the October jobs report. Third quarter GDP is expected to be around 1.8% any number not reaching that potential will be a big disappointment. One can conclude a bad number would be bad for the market, but we know this may not be the case with the Federal Reserve printing money. How the market reacts tomorrow will be very important. As of late, earnings have not been too kind to many stocks and we continue to see a lot of Revenue misses. Earnings are easily “gamed” whereas revenues are not. There were many who were expecting big moves out of AAPL and AMZN. EXPE and PCLN made the big moves higher! Earnings continue to produce wild moves! Stay disciplined and have a great weekend.

The Fedral Reserve Rate Announcement Fails to Lift Stocks

There wasn’t much anticipated from the Federal Reserve today, but there was hope something may hit the wires impressing the market. New Home sales were slightly better than expected reaching a new high. However, nothing impressed the market at all and was unable to hold the morning gains. It is pretty pathetic when the market is unable to hold gains for one day. We remain very weak and in a sell signal and technology earnings continue to disappoint. Despite Buffett’s cheer leading for buying on the dip we continue to remain in weak price action. The fiscal cliff is just one issue facing this country. Many will point to the spending cuts and tax increases causing short-term pain for a fragile economy. However, the short-term view versus long-term view should be discussed. How long can we kick the proverbial can down the road? At some point we’ll need to have revenues exceed expenditures to pay off the debt and it won’t be fun. Another issue is capital expenditures or CAPEX. CAPEX spending continues to decline as the view of the future continues to be clouded. Firms are not spending their cash because they have zero visibility due to the current market environment. The Consumer is still deleveraging and corporations aren’t spending will not spell out a pretty picture for profits. Volume ended the day higher on the NASDAQ as the index continues to struggle. On the bright side of things the index remains above its 200 day moving average. Tomorrow the index will have two big components report: AAPL and AMZN. Both stocks do not look healthy at the moment and have pulled back from recent highs. We are not about to guess how these two stocks will react, but we do know when they do will affect the NASDAQ in a big way. AAPL is one of the most over-owned stocks. Many mutual funds and portfolios in general have large positions in the stock (12-13%). The exit door will be mighty crowded if holders begin to flee. Tomorrow is a new day, but what we know now is a very weak market action in the 4th year of a bull market (March ’09 – Now). Cash is king.

Its Quantitative Easing or Bust

It is quite clear the market is waiting for the world’s central banks to print more money. Futures were heading lower along with European markets when the ECB’s Draghi issued comments about saving the EURO at all costs. Translation: they will print EUROs. The stock market’s reaction to Draghi’s comments were positive as price gains were strong on above average volume. End of day action wasn’t ideal and the S&P 500 was the only index to look ideal. However, what a difference rumors of quantitative easing will do for the market. There isn’t something quite right with this market, but with the hint of further easing the market will continue to trade wide and loose. Earnings season has not been kind as we are on pace for a very disappointing earnings season. While we are very price driven we focus on growth stocks. Unfortunately, without growth in fundamentals our universe of stocks shrink and this is the current situation we are in. The lack of growth in the market on the fundamental level has us seeing a narrowing universe of stocks. Not to mention this earning season has destroyed a few of our leading growth names. We can always hope the miracle of quantitative easing will save our stocks and set off another rip roaring rally. The AAII survey continues to lean towards the bearish side of things. It is easy to see as why the folks answering the survey are bearish. Earnings season is not spectacular and economic news has NOT been good. June’s PMI were very negative and recent home sales both pending and new have been disappointing. Manufacturing data has not been signaling growth, but contraction. Outside of quantitative easing there isn’t much to be bullish on. The next FOMC meeting is next week and on Wednesday they will release their policy statement and rate decision. We’ll focus on price and follow our rules while the rest use discretion and opinions to navigate this market. Tomorrow’s GDP report will set off fireworks for the market. Sit back and enjoy the ride! Have a great weekend.

Industrials Lead the Market on the Backs of BA and CAT

Stocks end the day on a sour note with action dominated by reaction to earnings. Economic news from new home sales did not help matters, but dip buyers were on the prowl. BA and CAT helped the Dow Jones Industrial Average lead the way while AAPL weighed on the technology heavy NASDAQ. Remove earnings from the picture and you are left with a pretty dull day of trading. Despite the mixed results from stocks the VIX fell on the day as fear left the market once again. Ben Bernanke’s Federal Reserve put on the market seems to keep this market from falling apart. When you boil it down today was simply a “nothing” day. Last hour of trading saw the NASDAQ move from its high of the day right back to the mid-point of the trading session. Yesterday’s last half hour of trading was supported by rumors of the Federal Reserve taking action sooner rather than later. At this point, how much more can the Fed do? Is another round of QE going to do much of anything? Rather than hand out another $400-600 billion to banks why not hand out $5,000 to every taxpayer (those who paid taxes) making under $250,000? Would that not help solve the problem? At this point, the banks have been bailed out enough time for the consumer to get something! By the way, while giving out free money may sound good in reality it is a terrible idea. It is a short term fix that solves very little for the long haul. It is highly unlikely we’ll see either the Federal Reserve or Washington DC do anything that would solve our fiscal issues. Money printing prolongs the agony and DC simply cannot agree too much of anything. At this point, the market believes in the Federal Reserve put and you see it whenever there is a rumor regarding action. We’ll focus on the price action of the market and the stocks we follow. Price action continues to favor the weak side at the moment and until we get a big volume move in either direction we are playing it safe. Always make sure you know your exits to both winning and losing trades. Enjoy the market tomorrow!

NASDAQ 100 Carries the Market Higher Despite Disappointing Manufacturing Data and Jobless Claims

Economic news was not good this morning, with the Philly Fed showing manufacturing contracting and jobless claims contracting much more than expected. Initially the market did sell off on the news but buyers jumped back into the market pushing the NASDAQ back to intraday highs just after noon time. Early afternoon selling, once again, was met by buyers as this market appears it just can’t go down. Regardless of the reason we continue to see support rush into the market any time sellers get a leg up. A few financials were struggling, but overall the market remains in an uptrend and we’ll continue to act accordingly. A surprise out of the AAII investor survey was it showing the number of bears jumping above 40%! Those who are bullish fell to 22% and it is surprising considering the move in stocks since JPM issued earnings. Sentiment is not something you would want to trade off of, but it is interesting where folks are at with this market. Perhaps it shows people are bearish and feel the Federal Reserve will save the market. The big boy financials certainly aren’t following up gains from earnings. MS reported this morning and the stock has been getting hammered. BAC, JPM, and GS continue to act very weak! Technology stocks are certainly in favor with EBAY, QCOR, and SNDK earnings. Last week it was JPM who got the party started with its earnings release and we have seen very little follow-through. We’ll stand pat with our rules-based investing and leave the guess work to others. Lagging the broader market in a significant way were Small Cap stocks. The Russell 2000 fell .36% today, while the NASDAQ jumped .79%. Even though the NASDAQ backed off its highs of the day, the index put in a solid day, unlike small cap stocks. It is unfortunate, but investors are just not favoring small cap stocks for whatever reason. Perhaps the Bernanke put is only dividend yielding stocks? It is anyone’s guess and for now small cap stocks as a group are not moving and we’ll latch onto the stocks that are moving. Just another day in paradise! Cut your losses and let your winners ride! Have a great weekend.

Stocks Add to Tuesday’s Gains as Volume Ends Higher

For the second straight day, Ben Bernanke testified in front of the house and stocks pushed higher. Housing data was a bit better than expected, aside from building permits. However, a few home building stocks like HOV and PHM did not agree. INTC lead the semi-conducting stocks and the rest of the technology sector higher. NASDAQ led the major indexes higher with solid gains, but off the highs of the session. We continue to be in rally mode and have witnessed a solid back to back days of gains. Despite potential headwinds facing this market and it being the summer time, we have quite the potential to run further. This might change tomorrow or Friday, but for now we are in rally mode. If we are wrong we simply use our rules to exit our positions and move forward. No guess work here and we certainly aren’t going to act upon any emotion. Know where your exits are both for losers and know when to exit your winners. Banks were looking pretty good, but earnings from BAC disappointed the market as the stock sold off in heavy trade today. GS and JPM both look weak here and after enjoying nice gains from JPM’s earnings release last Friday we have seen a lack of follow-through from many of the banks. BBCN and WTFC bank stocks we have liked continue to do well, but it is the big boys weighing on the entire sector. As we progress we’ll continue to look to see where our exits are and potential entries and go from there. We’d rather to see financials continue to lead the market as they tend to be the first group out of the gate during a rally. Where this market goes is anyone’s guess! For now we have a trend to push higher and until we get signaled otherwise it is the long side we go. Cut your losses and ride your winners.

AAPL Boosts the Market as the Federal Reserve Announces Rate Policy

The story of the day was none other than AAPL producing fabulous earnings. On the negative side durable goods orders was much lower than expected, but failed to derail the euphoria surrounding AAPL’s earnings. The stock comprises 17% of the NASDAQ 100 and a nearly 9% move helped the NASDAQ finish higher by more than 2%. Volume was higher on the day and above average an encouraging sign. Ben Bernanke and the rest of the Open Market Committee held rates steady (continuing ZIRP), boosted their economic forecast, and said they would remain ready to step in when needed. A positive day for the markets and day one of an attempted rally pushed the Big Wave Trading market model to neutral. We’ll be looking for a big volume up day of more sometime between days four and seven. Day four will occur next Monday on month end. IBD uses 1.7% on the NASDAQ, but we’d take 1.5% on very strong volume to confirm a new market rally. Any new buys here would be very small for us, we want confirmation of a new rally before stepping into the waters. AAPL is very likely to digest the current move and will hold down the NASDAQ. Of course, the stock could power higher from here. However, we have seen stocks like UA pull back after earnings and AAPL probably will not be any different. Remember, we saw quite the price destruction from the end of March and it will take some time to repair the damage. It is wise to stay patient and strike when the odds are in our favor. This market continues to be a difficult one to manage! We have repeated this sentiment since this uptrend began. It would not surprise us to see this market push higher from hear testing the 50 day moving average. And with the Federal Reserve continuing its ZIRP anything is possible here. Like it or not, the Fed will continue to print money when needed to save this market. Stay disciplined and you’ll come out of this all right! Cut those losses!

AAPL Blows Away Earnings as Stocks end Mixed on Light Volume

Disappointing housing market numbers kicked started the morning economic news, but a better than expected Richmond Fed Manufacturing index was a nice surprise. While the rebound outside of the NASDAQ was nice to see the lack of volume was quite unimpressive. The real story would come out in the after-hours session with AAPL reporting its earnings. Blowing out another quarter of earnings AAPL was able to surprise the street again with fabulous numbers. Closing out the after-hours session, the stock closed off its highs, but above the key $600 psychological level since last week. Today’s session was really lackluster with not much to hang your hat on besides AAPL. AAPL will take a back seat to Big Ben and the Federal Open Market Committee’s policy statement and rate announcement. The Fed isn’t about to raise interest rates any time soon, but the market would like to hear the Fed go beyond 2014 and state rates will remain low until 2015. May I remind you that is a full 6 years from the bottom. In 1920, the economy suffered a terrible recession (the last great recession before this one) and by 1921 the economy bottomed out and pushed higher. While there was considerable pain the rest of the 20s roared. Is the economy so bad the Fed needs to keep rates this low? ZIRP is not working and neither is pumping in further liquidity. This debate will not matter, only the direction of the market matters and it continues to be down. A key indicator is the 50 day moving average and the S&P 500 and NASDAQ remain below this key moving average. I am sure we could see the prices jump back above this moving average, but with the current damage waged by sellers it would take a miracle to manage a new rally. Let’s also not forget we are close to May and very few uptrends have EVER started in after May. August would be the next probable month a new rally may actually begin. We’ll most likely see a lot of chop and lower prices over the next few months. Be prudent. Volume will likely get a boost tomorrow as everyone in the world will try and position themselves after the Fed announces its decision. Perhaps we’ll get the NASDAQ to produce Day one of an attempted rally, but the odds are not in favor of a new uptrend forming here. Its all about price! Stay focused on it.

A Very Eventful And Green Week Comes To A Close With Stocks Up Across The Board On Mixed Volume

Stocks started the day off on a very positive note thanks to a couple of big merger rumors and more positive earnings from top stocks that outweighed the poor jobs report. Reports that MSFT wants to buy the search engine YHOO (around a $50 billion transaction) and that RTRSY is being offered takeover bids possibly by Thomson Financial definitely put a fire to a market that is just flush with M&A activity. Great earnings from CROX FSLR UEIC PCLN and RIO did not hurt either.

Good news from the micro could not be found in the macro today. The April jobs report showed only 88,000 jobs were added this month. This was below the 100,000 expected by pundits and was the smallest increase in two years. This is another sign that the economy is starting to slow down. Unemployment ticked up to 4.5% and average hourly earnings rose .2% below expectations of .3%. This can be taken as slightly positive since it does not show rapid inflation in wages.

The good start gave way to a midday reversal that was quickly supported by the dip-buyers, possibly thanks to another fall in oil, and they proceeded to abid stocks up in a choppy fashion into the close. Oil fell $1.26 to $61.93 ending a week where crude oil fell a total of 6.8%. That obviously is good news for consumers.

At the closing bell the SP 600 led the way hitting an all-time high with a .5% gain, the NYSE followed also hitting an all-time high with a .4% gain, the Nasdaq neared 7-year highs closing with a .3% gain, and the DJIA hit an all-time high and the SP 500 came near a 7-year high gaining .2%. Growth investors had a lot to be thankful for today as the IBD 100 led for the third session in-a-row with a .8% gain.

Volume was slightly higher on the Nasdaq by about 2% and for the second day in-a-row the NYSE’s volume came in lower. That is a slight negative divergence with the NYSE hitting all-time highs the past two sessions on lighter volume. However, breadth was very positive which does put a slight positive spin on the lower volume. Advancers beat decliners by a 3-to-2 margin on the NYSE and by an 8-to-7 margin on the Nasdaq. There were a healthy amount of new 52-week highs with 609 and even though there were 66 new 52-week lows the fact that they didn’t expand on an up day is good enough.

For the week the DJIA led the way higher with a 1.1% gain, the NYSE followed with a .9% gain, the SP 500 and the SP 600 rose .8%, and the Nasdaq lagged with a .6% gain. The IBD 100 finally did something two weeks in a row that it has not done for months–lead the market. The IBD 100 gained 1.2% for the week, outpacing the DJIA by a tiny amount. However, that is not nearly as impressive as the fact that the DJIA is up 23 out of the past 26 sessions (I have not checked but I think I got that wrong yesterday) and has hit record highs in seven of the last eight sessions. The current streak of 23 up days out of 26 is one short of the record set in 1927 when it was 24 for 27. Get your “24 for 27″ rally hats on (not really–there is no need to cheer).

I have to admit, last week was one of the more exciting weeks I have been a part of in a while. I am not sure why but I believe it has to deal with the fact how confused everyone seems to be about this market. I have to admit I am not a genius to know why we are rallying. But I am smart enough to know that that is all I really need to know. While I continue to go long stocks, I still see a lot of people hesitant to buy stocks here.

I have to admit, I am, in my IRA. But in my regular accounts I am not afraid at all. There were only two stocks that I am going to have to completely sell-off yesterday due to breakdowns. One was E** (4% loss) and the other was I*** (8% loss). I scaled into INXI so that position did not hurt me and then EDS was bought so close to the 50 dma that that did not hurt me. It is hard for me to be bearish on that. But what I can take away as bearish is the fact that both of these stocks had BEAUTIFUL charts and had strong fundamentals. I have not seen such pretty charts with strong fundies breakdown like that since late February.

So how does that prove the crowd is bearish? It doesn’t. This does: The AAII survey came in with 55% bears this week which was the number seen at the July lows. There were only 29% bulls in the survey. Even though this survey is very fickle it still shows how bearish the crowd is still. If that doesn’t convince you the crowd is bearish let’s take a look at their actions.

The put/call ratio is still above the .6 area at .75. Until the number is below .6 it is hard to say that the crowd is not making bearish bets. And the biggest piece of interesting figures I could find on how investors are actually investing came from AMG. They report that mutual funds had outflows of $5.41 billion for the week ending on May 2. First quarter mutual fund inflows are down 30% from last year!! You do NOT see mutual fund outflows at the top of a market. So when people remind you that this market feels like 1999–it may in fact feel that way, but in 1999 mutual fund inflows were pouring in. It wasn’t until well after the market top that the trend reversed.

Rolling with this theme it also becomes clear that many market pundits are nervous with the rally (I am slightly in the boat–but I still go with the trend). Don Hays, Al Goldman, David Peroni, Dick Arms, James DePorre, Cody Willard, and a few others are issuing either cautious outlooks and in a few cases are starting short positions and/or taking longs off the table. This along with Seeking Alpha’s data showing that sell-side analyst have SP 500 stocks as buys at the lowest level in over ten years!!! Did you get that. The sell-siders are not telling you to buy stocks yet. When they start issuing buys and strong buys, then we probably should be worried. For now it seems everyone is doing the worrying for us.

The other incredibly bullish working thesis this market has going for it is earnings. Earnings are now coming in at a 12% YOY increase, KILLING estimates of 3.2%. This was supposed to be the first quarter in fourteen quarters that earnings grew under 10%. Well have now erased that possibility and now it is 15 quarters in-a-row of stocks showing 10% or higher YOY EPS gains. This is the greatest economic story ever and it gets absolutely NO attention paid to it by the biased media. It is shameful and disturbing that people do not even understand how incredible it is that we are about ready to have 10% gains 15 quarters in-a-row. One more quarter like this and it would be a full four years of 10% gains. INCREDIBLE to say the least.

There can be no doubt about it, last week was an eventful wild week. What a week it was with all the M&A announcements and speculations, great earnings reports, record high closes, and economic data. Of course the big story of the week was the NWS bid for DJ. That clearly showed the bears that this market is for bulls only. Anyone short any stock should take a look at a giant stock like DJ, see how it acted on the news, and then reevaluate why you are short.

A pullback would be very nice here to help setup some nice proper green bases so that stocks can blast out of them when the rally starts again. But if there is no pullback, still demand that you buy stocks coming out of great bases or are bouncing right off of the 50 dma on big volume. The longer we go without a pullback the harder it is to find a lot of perfect stocks setting up in perfect bases.

The one thing you must not do here, unless you are very experienced, is to chase momentum. That game is for the daytraders who can use leverage and get in and out of positions at lightning speed and still make a ton of money. Unless you have mastered the smooth style of a CANSLIM based system, I doubt it is worthwhile for you to try daytrading the highflyers. And the absolute thing you MUST NOT do is short the market or go short stocks in uptrends. AMZN, DNDN, DJ, and RTRSY are all good reason to not short this market.

Have a great weekend. Let’s hope that next week isn’t as jam packed with so much market moving news. I need a break. Aloha and enjoy your weekend! I will see you in the chat room. Aloha!!

Market Commentary At Big Wave Trading Bronze Level One

New Swing Longs: Silver Level Two

New Swing Shorts: Silver Level Two

Stocks On My Watchlist: Gold Level Three

Complete Profits/Losses: Gold Level Three

Partial Profits/Losses: Gold Level Three

MauiTrader Forums: Gold Level Three

MauiTrader Chat Room: Gold Level Three

Longs Up On The Day: Gold Level Three

Shorts Up On The Day: Gold Level Three

Top Holdings - Date Of Purchase

KNOL 393% - 1/12/06
TRCR 282% - 1/12
PTT 282% - 11/16
TNH 178% - 10/26
MA 171% - 8/2
TTEC 167% - 8/25
JSDA 136% - 12/20
IGLD 123% - 10/26
ANO 116% - 2/14
ULTR 111% - 10/27
HRZ 108% - 9/27
CPA 104% - 9/15
MFW 103% - 1/29
ONT 102% - 12/21
PAE 101% - 3/22
EVEP 99% - 11/16
BAM 99% - 11/17/05
HURN 79% - 9/13
KHDH 77% - 5/30
CXW 77% - 5/19
DECK 71% - 9/13
IMMU 69% - 12/19
VDSI 66% - 1/4
CNH 64% - 11/2
IMKTA 54% - 8/28
CLRT 54% - 11/30
NSH 54% - 12/19
CKSW 53% - 10/11
MNTG 52% - 11/9
LFL 52% - 12/13

HAPPY EASTER!!!, HAPPY GOOD FRIDAY!!!, AND HAPPY PESACH!!!; Stocks End Short Week With More Gains On Light Trade

HAPPY EASTER!!!, HAPPY GOOD FRIDAY!!!, AND HAPPY PESACH (PASSOVER)!!!; Stocks End Short Week With More Gains On Light Trade
By MauiTrader

Stocks started the morning off with a gap lower on the back of a currency tightening measures in China. But after the gap lower, stocks steadily climbed higher on very quiet trade for the rest of the day. That reversal off the gap lower was caused by the Labor Department announcing that jobless claims this week fell within forecast. Those jobless claims this week rose by 11,000 to 321,000.

Also helping to lift stocks was a couple of merger and acquisition related announcements. Kirk Kerkorian has made a $4.5 billion bid for DCX and WEBM agreed to be acquired by Software AG. WEBM rose 27% on the announcement. This now puts the 1Q M&A deals up 27% over this time last year. $1.1 trillion worth of M&A deals this year has us on pace to beat last years record. More amazing is private equity deals. Those have risen 47%, year-over-year in 2007 so far.

Combine the positive jobless claims with the M&A deals, and with most traders taking Thursday off to have a very long weekend, and you had a recipe perfect for higher stock prices, despite oil climbing back over $64 on the news that the EIA saying that oil inventories declined for the eight-week in a row.

At the closing bell, the Nasdaq led the way with a .5% gain, the NYSE and the SP 500 followed with .3% gains, and the SP 600 and the DJIA lagged with .2% gains. A tad more troublesome is the IBD 100. That index only managed a .2% gain, well lagging the Nasdaq on the session.

Volume was lower on both the NYSE and the Nasdaq by about 10%. The lower volume was well below the 50 day volume average and was the lowest total of the year. Advancers beat decliners by a 5-to-3 margin on the NYSE and by an 8-to-7 margin on the Nasdaq. There were 413 new highs to 53 new lows–and on the NYSE there were 234 new highs to only 13 new lows.

Today was another day of a low volume rally that saw the indexes barely move higher but once again shake off early weakness to do so. This is not a great trend we have developing, since the follow-through day on March 21st. Since that follow through day the market was been higher in seven sessions. All seven sessions have failed to have volume over the 50 day volume average and only two of the up sessions have come with volume heavier than the day before. This is a low volume rally that will not last much longer unless we get some clear accumulation days in here by big institutional traders. Until we have volume come in over the 50 day volume average on the upside, we are open to a severe sell-off still. Bottom line is that I would not take much away from this week’s holiday shortened trading.

For the week it was very positive with all indexes closing higher. The Nasdaq led the way with a 2.1% gain, the NYSE followed with a 1.8% gain, the DJIA was right behind with a 1.7% gain, the SP 500 rose 1.6%, and the SP 600 gained 1.5%. I could go into more detail about this weeks action but it would be silly to do so. All you need to know is that it was a holiday short week. The bulls almost always have control of these weeks. This week was no exception.

There is no doubt that we are still in rally mode but everything in my gut tells me we are not going far from here. Now I will change my stance in seconds, if I start to see CANSLIM stocks with consistent great EPS and sales growth breakout from fresh bases and the markets start moving higher on HUGE volume. However, all I keep seeing is the old leaders breakout from choppy bases, defensive and utility issues climbing, and little small sub-$10 momo stocks moving. This does not make a safe big bull market. If we start seeing some more buying here on a lot of volume I will be much happier. However, unless we see it soon, we are increasing our chances of failure each day that passes that volume on the up days remain under the 50 day volume average.

Can we make money here? Of course! If you are a subscriber at least on the silver level you can see for yourself that almost EVERYTHING that I have touched since the February 27th sell-off is either higher or has not violated a complete cut loss area. However, there is nothing over $10 breaking out from bases seven weeks long that have perfect accumulation/distribution and max green BOP. In March 2003, October 2004, and November 2005 there were plenty of beautiful charts. Even after the move in August 2006 there were a few SWEET gems. However, since March 21st there has been very few. The stocks that do have perfect charts are just not CANSLIM quality. If this market takes a turn for the worse, these stocks will not fall 8%–they will fall 20% or more before violating a key cut loss level. So I can not recommend them for newbies.

Give me a sell-off of 20% or more and a VIX near 20-30 and the next follow-through we get you will see the power of this strategy. Right now, very few people are making a killing. Remember back in March 2003 when the VIX was at 33? I had many stocks make 300-500% gains. So what can we compare it to now. How about KNOL. KNOL is up 301% for me since I purchased it. If the VIX was three times higher than now and around 36, KNOL would be up 900%. So basically you can take a look at my returns below this commentary and then double or triple them and then you will see the potential gains in a “REAL” bull market. Not a low volume snooze-fest higher.

Speaking of the VIX: The VIX fell 10.2% this week. LOL. With the VIX that low, you can forget about many MFW or TRCR type of stocks showing up. Normally I can find 10-20 MFW and TRCR type of stocks. Not in this market. However, the drop in VIX puts complacency in the market and that is bearish for stock prices. Another bearish item is the put/call ratio. That ratio after falling below .7 yesterday is still low at .74. Also, early on in the realmoney.com polls, bulls are beating bears 60% to 19%. The crowd appears to bullish again….for now. And we all know how quick this can change. More choppiness? Probably.

So remember, until we get more quality CANSLIM type stocks, keep your buys small in this speculative crap that is getting action. Also if you are brand new and are still inexperienced (you know who you are) and you buy a stock and it goes against you the next day, think about selling 25% to 33%. Also in these speculative stocks, don’t be afraid to take some gains at 25% or so. These things like to reverse in the kind of market environment we are in so you need to stay on your toes. Breakouts should work right away! Especially in rough markets. If they don’t move up right away, newbies, think of selling some down.

Before I move on to wishing everyone a Happy Easter, I want to talk about the March employment numbers. Expectations for 135,000 was well taken care of when headlines produced a gain of 180,000. Along with that nice gain, the previous two months employment figures were revised up. But more amazing, despite this “horrible-evil-economy-that-GWB-has-created,” unemployment came in at five-year lows at 4.4%, beating expectations of a tick up to 4.6% from 4.5% . That is simply incredible. This also comes with average hourly earnings rising .3%. That is a 4% gain year-over-year. Even though the economy is showing signs of slowing, these numbers show just how great this economy still is despite the slowdown.

Wall-street took the news quite well with the SP futures rising 5.75 and the NQ futures rising 10.75. Stocks were closed today, obviously, but futures still traded for a little while.

Earnings season officially starts next week when AA reports on Tuesday. Analyst are expecting gains of 3.7% in YOY earnings this quarter. That is down from 8.7% estimates, earlier this year (not a good sign). Don’t you find that a bit scary how far they have come down?? Also, the expected 3.7% YOY gain will be the first gain in 14 quarters of non-double digit growth. As earnings go, so goes the market. Historically you can watch the trend of the GDP growth and earnings growth of an economy and see that they are the best predictor of what direction the stock market will take. GDP and earnings lead the market.

With that I wish everyone a Happy Easter and Passover. Enjoy the time with loved ones. Aloha and I will see you in the chat room.

Market Commentary At Big Wave Trading Bronze Level One.

Top Holdings Up This Week - Signal Date

KNOL 301% - 1/12/06
AKAM 220% - 9/30/05
TRCR 188% - 1/12
TTEC 172% - 8/25
JSDA 139% - 12/20
TNH 132% - 10/26
OMTR 125% - 9/15
CCOI 107% - 9/27
MEH 105% - 8/30
HRZ 104% - 9/27
CLRT 98% - 11/30
PRGX 97% - 1/12
AOI 94% - 11/19
EVEP 93% - 11/16
MFW 91% - 1/29
BONT 87% - 10/3
NEXC 81% - 10/25
CPA 79% - 9/15
CHINA 78% - 8/16
IMKTA 74% - 8/28
SLP 73% - 2/5
BAM 73% - 11/17/05
DA 67% - 1/25/06
MOS 65% - 10/12
EPHC 64% - 12/20
ULTR 64% - 10/27
HURN 63% - 9/13
IIVI 63% - 8/30
PERY 61% - 10/4
ANO 58% - 2/14
CXW 58% - 5/19
XIDE 56% - 1/29
KHDH 55% - 5/30
APLX 53% - 9/28
BMTI 52% - 10/25
IMMU 52% - 12/19
ONT 52% - 12/21
BMA 52% - 10/24
DECK 51% - 9/13
OEH 48% - 11/20
VDSI 48% - 1/4

New Swing Longs: Silver Level Two

New Swing Shorts: Silver Level Two

Stocks On My Watchlist: Gold Level Three

Complete Profits/Losses: Gold Level Three

Partial Profits/Losses: Gold Level Three

MauiTrader Forums: Gold Level Three

MauiTrader Chat Room: Gold Level Three

Longs Up On The Day: Gold Level Three

Shorts Up On The Day: Gold Level Three