From the Trading Desk

Big Wave Trading Portfolio Update And Top Current Holdings

The Big Wave Trading Portfolio remains under a BUY signal, as the market consolidated recent gains the past week. Volume was lower overall for the week and that is always bullish for a continuation of a trend. Unfortunately, when the market rallies it rallies on below average volume. The good news the past week was the selling volume was also below average.

This action the past week has helped form a lot of solid consolidation patterns out there and two stocks that are on watch from the 3D printing arena include DDD and SSYS. If the market decides to move higher those two stocks will definitely be closely followed. On top of that, there are plenty of other stocks forming constructive weekly consolidation patterns. If the market breaks out to new highs here, expect these stocks to follow.

Another positive for the market was the inability to really sell off following the Cyprus and Eurozone news all week long. The fact the market held up so well, despite this development, is a testament to the power of worldwide QE. When the market does not sell off on bad news, that is always a short-term bullish development. The other side, of course, is that a market that sells off on good news is a market flashing that it is in trouble. So, so far, so good.

As long as leading stocks continue to do well and trend higher there is nothing to do but to follow the trend until it ends. While we are long a lot of stocks doing very well, we have our trailing moving averages to tell us when to get out partially or completely. To think that any emotion is involved in our current long positions is a grave mistake. We do not have emotions in regards to the stock market at BWT. We only have quantitative signals. Nothing more and nothing less. When we are wrong we cut our losses immediately like in a recent long signal generated in WNC on 3/15 that we had to reverse on 3/19.

The good news about that loss is that the stock is now setting up in an even more constructive consolidation pattern thus making the next long signal a higher reward to risk ratio setup. On that same note, however, a further follow-through on the recent breakdown below the 50 day moving average will have WNC completely wiped off our watchlist for now.

OK everyone. Try not to get caught up in all the Euro news dramafest this upcoming week, let your winners run and cut your losses short, and most importantly have a great rest of your weekend and upcoming week. Aloha.

Current Top Holdings – Percent Return – Date of Signal

CSU long – 104% – 9/4/12
EAC long – 92% – 12/17/12
CAMP long – 90% – 4/26/12
POWR long – 80% – 12/11/12
HIMX long – 76% – 12/19/12
FLT long – 70% – 9/6/12
HEES long – 69% – 9/4/12
CPSS long – 56% – 1/31/13
AXLL long – 46% – 1/4/13
WAGE long – 42% – 1/8/13
ASTM short – 41% – 7/17/12
GNMK long – 38% – 11/16/12
MNTX long – 36% – 1/17/13

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