The Big Wave Trading Portfolio Model remains under a BUY signal from 1/2/13. There is added pressure arising on the overall model, thanks to the Wednesday and Thursday distribution days and the overall wedging pattern of the overall uptrend. This, along with the lack of gains above 1.5% on higher volume, following the 1/2/13 signal, keeps us in the cautious bull camp which is where we have basically been following the third week of January.
Despite the problems in the overall uptrend, we remain in an uptrend and until we have a series of 5 to 6 clear distribution days over a 2 to 3 week period we find it foolish to fight the Fed and unlimited QE. Some of our current long positions gave heavier volume partial profit taking signals and a few recent new long positions triggered cut loss levels. But overall it was a fairly orderly pullback. So far, at least.
On top of that, we had multiple buyable gap up signals that worked very well intraday. It was a 4 for 4 session with 3 big IPO winners. Even though volume was lower overall on Friday, we have learned that price is all that matters. If stocks still have more of an explosive volatile bias to the upside on an individual basis then we will have our models focus on that area of the market.
What will change our minds? The same things that always do. Our new longs start failing immediately, our current holdings trigger profit taking signals, and/or the market begins a rapid decline in heavier volume. Right now, we are on watch for further heavy selling. However, calling tops here, as it always has been throughout human history, is a foolish and unwise proposition. I recommend ditching the opinions and using a sound back-tested time proven systematic methodology that completely eliminates emotions.
Top Current Holdings – Percent Return – Date of Signal
CAMP long – 92% – 4/26/12
CSU long – 79% – 9/4/12
HEES long – 62% – 9/4/12
FLT long – 52% – 9/6/12
EAC long – 44% – 12/17/12
ASTM short – 39% – 7/17/12
POWR long – 37% – 12/11/12
WAGE long – 31% – 1/8/13
AXLL long – 31% – 1/4/13
HIMX long – 26% – 12/19/12