From the Trading Desk

Big Wave Trading Portfolio Update And Top Current Holdings

After a quick trip back into the NEUTRAL zone, our models all switched to BUY on Monday the 17th. Unlike the previous BUY signal in which no action was taken, this BUY signal was actionable. The move on Monday came with strong above average volume on all four major market indexes. All four indexes also produced pocket pivot point buy signals on the same day. On top of that, banks, homebuilders, and small caps led on the day.

While the signal on Monday was solid, further confirmation came the following day as all indexes followed through on the gains on even higher volume producing a second pocket pivot point buy signal in a row. However, more importantly, all ETFs, leveraged ETFs, inverse ETFs, and inverse leveraged ETFs confirmed the move by moving higher on strong volume. The volume confirmation in all indexes, with bank and homebuilding stocks leading, and an improving macro environment was a good step in the right direction for market bulls.

However, as we saw on Friday, it is definitely not going to be smooth sailing ahead with items like the Fiscal Cliff around to spook traders or algorithm HFT programs. Still, the intraday reversal does show that the market has some solid support in it as traders try to play catch up to the almost daily move higher by the market from the November lows. Many traders who wanted to get long but never had a chance because the market never pulled back will statistically more-than-likely due to the solid foundation of the overall market buy the dips.

So is it up up up and away from here? Nobody knows because absolutely 0.00% of all human beings alive today can accurately predict the future. The fundamentals and technicals do support that thesis. Sadly, this isn’t a free country or a free market anymore. It is a manipulated economy that is orchestrated to serve the bankers and no one else. The ZIRP and QE policy that they pursue to save the most elite of the elite will absolutely cripple the poor and middle class. While this effects traders on the consumer price level we at least can mitigate the damage by being involved in the only place this toilet paper money is going to go. World equity markets. If you have the ability to trade, you have the ability to win in this game where surely many are going to lose.

On that chipper note, I wish everyone a lovely holiday season. I hope everyone has a wonderful time with friends and family. Have yourself a very Merry Christmas and a very relaxing New Years. Aloha from Maui where Christmas never quite feels like Christmas. Hey, it is a little cold. Not long sleeve T-shirt cold. But it’s a little chilly. Once again, aloha.

Top Current Holdings – Percent Return – Date of Signal

NTE long – 103% – 8/17/12
VRNM short – 56% – 4/10/12
CSU long – 45% – 9/4/12
CAMP long – 45% – 4/26/12
ASTM short – 30% – 7/17/12

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