From the Trading Desk

Big Wave Trading Portfolio Update And Top Current Holdings

The Big Wave Trading Portfolio model switched to a NEUTRAL signal on 2/25/13. The switch from the BUY signal to NEUTRAL signal occurred due to the overall market having two volatile selloffs in less than a five day period. The model did not switch to a SELL signal due to the major market indexes holding their 50 day moving averages. The model also did not switch to a SELL signal because current holdings in the portfolio continue to act relatively well and are still trending higher.

Any further selling below the 50 day moving averages or our current holdings reversing on extremely heavy volume might push the model into a SELL signal. However, unless their is broad selling in leading stocks and the overall market we believe any SELL signal must be acted upon with caution. As long as the Federal Reserve maintains their ZIRP and QE policy, we believe going short this market to be very risky. We would also wait until the macroeconomic numbers start to turn lower before deciding to increase ones risk on any selloff.

For now, it remains a mixed market. Our recent long on Thursday, after a long time with no new long signals, did very well and if this continues then we know better to fight the trend. However, we are very cautious up here and believe keeping new long positions relatively small is a wise decision in an overall market where the current price and volume dynamics are not quite in line compared to what a proper market uptrend looks like.

Have a wonderful and profitable upcoming week. Aloha from a very warm and sunny Maui.

Top Current Holdings – Percent Return – Date of Signal

CAMP long – 93% – 4/26/12
CSU long – 88% – 9/4/12
HEES long – 61% – 9/4/12
EAC long – 58% – 12/17/12
FLT long – 58% – 9/6/12
HIMX long – 45% – 12/19/12
POWR long – 41% – 12/11/12
ASTM short – 38% – 7/17/12
AXLL long – 34% – 1/4/13
PFBI long – 29% – 11/19/12
WAGE long – 28% – 1/8/13

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