The Big Wave Trading Portfolio remains under BUY signals across the board. There is nothing still to do or think too much about as the trend higher is smooth and has come under very little pressure minus two minor distribution days in the Nasdaq Composite.
Overall, many traders believe that it is time for us to take a rest or pullback. However, traders have been thinking this for a while and until it actually happens trading on that notion is not wise.
On the sentiment front, it is getting very bullish out there for sure. However, nobody said it can’t get more bullish. Who is to say that bulls can not hit 90% on the Investors Intelligence survey? Who is to say it can not hit 90% on the AAII survey? Who is to say that the VIX can’t trade below 5 or hell even below 1? I know that is quite irrational but nothing about what has happened since 2008 has been rational. There is no need to believe it is time to start now.
We would love to see a pullback here as it would most likely lead to a very nice consolidation period in many leading stocks that would make their upcoming next round of breakouts that much more powerful. Our biggest concern with a non-stop uptrend is the possibility of a hard reversal that might lead to a sustained downturn instead of a buying opportunity. However, that being said, it is all talking points at this juncture.
All that matters is price, and sometimes volume (though it hasn’t mattered since 2009), and that is what we will continue to focus on. Set buy stops on your favorite stocks nearing breakouts to make sure you get long at the exact pivot points and you will do fine. If you wait till the EOD to buy breakouts in this market environment, you greatly increase your chances of getting caught in a normal shakeout/pullback in the stock.
Great luck next week everyone. I wish you all a very prosperous week. Aloha.
Top Current Holdings – Percent Return – Date of Signal
CSU long – 71% – 9/4/12
HEES long – 64% – 9/4/12
CAMP long – 48% – 4/26/12
VRNM short – 48% – 4/10/12
FLT long – 35% – 9/6/12
ASTM short – 35% – 7/17/12
GNMK long – 30% – 11/16/12
POWR long – 29% – 12/11/12
EAC long – 27% – 12/17/12
HIMX long – 26% – 12/19/12