From the Trading Desk
Void of economic releases the market did get showered with more than $3 billion in asset purchases from the Federal Reserve. A hiccup in the morning was quickly support as the Federal Reserve Open Market Operations flooded the market with fresh new cash. Over Europe the DAX closed in the green for the 11th straight [...]
Heading into the week the US market once again watched the Nikkei continue to move further into the stratosphere. Futures were pretty anemic heading into the trading session today. Overnight news focused on the plunge in precious metals as Silver and Gold were hit hard. Despite the negative open and sentiment both precious metals were [...]
The Big Wave Trading Portfolio remains under a BUY signal and currently has zero issues weighing on it presently. On the short-term the market is very extended in price compared to trailing key moving averages. Logic dictates that a natural pullback to some form of support levels (fibonacci, price lows, or a moving average) should [...]
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Big Wave Trading Portfolio Update And Top Current Holdings
The Big Wave Trading Portfolio continues to be under a BUY signal that was generated on August 3rd. The past week was another overall solid week with solid intraday price action outside of Friday. Another positive was the Nasdaq having two up sessions on volume well above average, continuing the trend from the previous week.
We continue to believe that this uptrend can last longer based on the overall public (AAII Survey bulls: 37.5%) still not showing that bullish fever and the NYSE short interest ratio sitting around 5-year highs at 21.03. As long as the trend is up, the public is not overly bullish, and the short interest ratio remains high, the trend should continue to be our friend.
We know what to look for if that changes but so far we have absolutely no signs of a change in trend coming. In fact the last distribution day on the Nasdaq was on August 21st (according to Telechart’s data). That is one month without a distribution day. Clearly, for now, there is nothing to worry about. We will cross that bridge when we get there.
As for stocks, we continue to find a ton of attractive long positions and continue to see many others setting up. If this continues, it bodes well for the continuation of the rally. Despite some trading sessions the past week being quite boring, there were plenty of stocks that made exciting dynamic price moves higher. Seeing these stocks move like they are on quiet days is a clear sign of real accumulation.
The only bad news, so far, in this rally is that we have not had a single stock set up in a “perfect” setup. However, that isn’t surprising as beautiful green filled chart patterns have been in decline since the 2008 crash. Trend following is definitely where it is at. Playing hot charts is not. I am sure one day that will change but as of right now it has not. We’ll keep hunting. Have a lovely rest of your weekend and aloha.
Top Current Holdings – Percent Return – Date of Signal
AVD long – 141% – 1/10/12
SVNT long – 70% – 9/10/12
NTE long – 65% – 8/17/12
CLGX long – 58% – 6/19/12
SHF long – 36% – 8/1/12
CAMP long – 33% – 4/26/12
PRXI short – 32% – 3/30/12
MAGS short – 30% – 4/18/12
VRNM short – 30% – 4/10/12
STX long – 25% – 6/29/12