From the Trading Desk

Big Wave Trading Portfolio Update And Top Current Holdings

The Big Wave Trading Portfolio remains under a NEUTRAL condition, following a week of choppy price action. The overall market continued its choppy trading the previous week with neither the bulls or bears asserting any real directional power. The bottom line is that we remain trapped between the recent highs and lows of all the major market indexes during the past month. Our model will not move to either a BUY or SELL mode until this trading range is broken.

The other possible model change could occur if the indexes make a powerful one day price move on higher volume. If that occurs and the indexes still remain range bound it is possible, if there are leading stocks in confirmation of the move, that we could switch before the trading range is resolved.

If we were forced to make a bet on which way the market is going to break next, we would laugh in the face of someone suggesting such a preposterous notion. However, if we were asked to analyze the current situation of leading and other individual stocks in relationship to the pullback in the overall indexes, that would be a welcome logical request.

When it comes to leading stocks in the market, based on EPS and RS ratings, everything is crawling along well. Our current holdings and leading stocks have done remotely well during the pullback in the market, with many of these stocks forming constructive consolidation patterns that historically should lead to further price breakouts. Some of our favorite examples include SCTY, TSLA, TNGO, DPZ, INVN, BLMN, SWHC, LNKD, and many others. These stocks are either consolidating nicely or are trending higher, despite the weak market. This, in our analysis, is a positive sign for a possible resolution higher.

This being said, nothing is concrete and for all we know the market might break out to new highs to just reverse lower on huge volume. The point is that anything can happen in the stock market and if you are not ready for anything and everything, then at some point you will be caught off guard and pay the price.

We shall see what the upcoming week has in store for all of us traders. As it stands, we continue to be very neutral here ready for anything to happen. Once again, based on our current holdings and leading stocks, we should expect a resolution higher. In reality, however, remember, anything can happen and everything must be prepared for.

Have a wonderful rest of your weekend. Aloha from a very beautiful, warm, and sunny west side of Maui. Aloha!!

Top Current Holdings – Percent Return Since Signal Date – Date of Signal

RVLT long – 162% – 3/26/13
EAC long – 156% – 12/17/12
CAMP long – 136% – 4/26/12
POWR long – 135% – 12/11/12
CSU long – 106% – 9/4/12
FLT long – 97% – 9/6/12
HEES long – 86% – 9/4/12
ASTM short – 73% – 7/17/12
INSM long – 68% – 4/19/13
WAGE long – 63% – 1/8/13
ADUS long – 59% – 4/22/13
CHUY long – 55% – 1/10/13
SBGI long – 50% – 3/22/13
WDC long – 45% – 1/9/13
V long – 41% – 8/31/12
GMCR long – 39% – 4/23/13
BBSI long – 38% – 2/13/13
TECUA long – 36% – 2/5/13
GLL long – 27% – 2/14/13
PFBI long – 26% – 11/19/12
DDD long – 25% – 4/30/13

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