From the Trading Desk

Big Wave Trading Portfolio Update And Top Current Holdings

The Big Wave Trading Model switched back to a BUY mode on 3/5/13 following a switch to a NEUTRAL mode on 2/25/13. The switch to NEUTRAL on 2/25/13 in our analysis of over 130 years of stock market history should have not switched back to BUY mode so quickly. The price breaks on 2/20 and 2/25 have historically led to months of choppy trading or started downtrends outright. The fact that we switched back to BUY mode so soon is historically extremely out of the norm.

However, this entire market choppy and slow uptrend from the 2009 lows coming on such below average weekly and monthly volume is also historically extremely out of the norm. Huge volume selloffs are quickly absorbed and new highs, not on higher volume but, on lower volume are soon followed. As we have stated before, nowhere else in the history of the United States stock markets can you ever find this trend. Low volume rallies have always been quickly destroyed by higher volume selloffs or do not last long and are followed by heavier volume accumulation to the upside. The odds times continue.

On that note, that means the only logical thing to do is to follow price here and be very careful with the size of long commitments. While Big Wave Trading misses the days when we plunged on margin, today’s market environment does not bode well for that type of investing. A more conservative approach is respected here knowing that a 2010 and 2011 shock experience is always just around the corner with a low volume market rally.

Therefore, we will continue to operate on the long side enjoying the paltry gains we see below (paltry in comparison to the gains we produced before the QE and ZIRP world we have been living in since March 2009), until a clear trend change becomes apparent. For now, the trend is up. We will obey our master–Price.

Top Current Holdings – Percent Return – Date of Signal

CSU long – 115% – 9/4/12
CAMP long – 95% – 4/26/12
HIMX long – 84% – 12/19/12
HEES long – 71% – 9/4/12
EAC long – 65% – 12/17/12
POWR long – 64% – 12/11/12
FLT long – 58% – 9/6/12
AXLL long – 36% – 1/4/13
WAGE long – 34% – 1/8/13
PFBI long – 31% – 11/19/12
CHUY long – 29% – 1/10/13
CPSS long – 26% – 1/31/13
V long – 25% – 8/31/12
GNMK long – 25% – 11/16/12

Comments

  1. paulcarrz says:

    Love the new layout of the site!!!
    Can you have a radar / spreadsheet with longs/shorts – don’t have to show qty just
    Date Symbol Entry & Category
    Category
    CSHQ (canslim High Quality)
    CSLQ (canslim low quality)
    SHQ (speculative High Quality)
    SLQ (speculative Low Quality)

    • I would love to but unfortunately the time requirement to do this is not permitting. My apologies. You can always track them on your own in real time. I have zero free time in my life anymore to add anything more than what this site provides. I wish I did. I wish I did. Post-2008 has not been friendly to a systematic trend follower like myself and I did not adapt fast enough.

  2. The best approach is to keep it simple. However, keeping it simple seems to be the most complicated adventure for the human species. It may sound complicated but it is in fact the complete opposite. The summary of the above information can be summed up as “the price is always right and never wrong. Our opinions are ego and must be eliminated from all decisions. Cutting losses when wrong must be done immediately and always.” That is about it. I wish you the best in your adventures. I recommend checking out some of the books in my Books section and reading some Trend Following books by Michael Covel for a little better understanding of what we do here.

    Aloha and have a lovely upcoming week!

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