From the Trading Desk

Big Wave Trading Portfolio Update And Top Current Holdings

The Big Wave Trading Portfolios remain under a full BUY condition as we head into the upcoming week. There are currently zero items weighing on the model currently and it is not our job to try to guess when and if there will be any in the future. The trend continues to be higher highs and higher lows and until this changes there is no reason to try to top-call this market.

What are our concerns? We are concerned about the non-stop uptrend off the November lows without a 5% pull back. We are concerned about the non-stop uptrend from the 2011 lows without a 20% pull back. We are concerned about the lack of volume in the overall major market indexes as we continue to hit new all-time highs. We are concerned that none of our new longs are exploding out of the gate immediately producing the past gains they used to produce under these exact same previous conditions. However, these are just concerns and are not actionable problems.

When the index finally starts to change character, our new longs fail in succession repeatedly, we start to see churning and distribution in the overall market indexes, our current holdings start triggering profit taking signals across the board, we start to see leading stocks fail late-stage breakouts, and we start to see actionable short signals then we can start taking all of our concerns seriously. Until then, the trend is up, the market is hitting new highs, and our new long positions continue to make money immediately following a signal.

As long as all of that is occurring there is nothing to do but ride the trend higher. I mean, the mere fact every intelligent market analyst and every intelligent macro trader in wall street thinks stocks should have topped by now or should top sooner, makes me believe the contrary approach is the right approach on the short-term. As long as we continue to see top callers, the uptrend has the sentiment it needs to continue to move higher. When these talking heads flip and finally capitulate to the long side then we can start to seriously consider the contrarian position of looking for a top when the smart folks are speaking of bullish matters.

Great luck this upcoming week. We shall see if more highs or in store for us. Aloha from a very windy west side of Maui.

TOP CURRENT HOLDINGS – PERCENT RETURN – DATE OF SIGNAL

EAC long – 191% – 12/17/12
HIMX long – 164% – 12/19/12
POWR long – 118% – 12/11/12
CAMP long – 118% – 4/26/12
CSU long – 112% – 9/4/12
FLT long – 82% – 9/6/12
RVLT long – 82% – 3/26/13
HEES long – 79% – 9/4/12
GNMK long – 70% – 11/16/12
ASTM short – 69% – 7/17/12
WAGE long – 65% – 1/8/13
SBGI long – 55% – 3/22/13
BBSI long – 40% – 2/13/13
V long – 38% – 9/6/12
GMCR long – 37% – 4/23/13
WDC long – 33% – 1/9/12
PFBI long – 32% – 11/19/12
MNTX long – 30% – 1/17/13
HTA long – 29% – 1/2/13
AMWD long – 26% – 2/1/13

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