It’s is vacation time on Wall Street as volume came in below average all week long. As is normally the case when volume is below average, stocks melted up with leading stocks (based on RS ratings) shining the brightest.
The Nasdaq and Nasdaq 100 remain under a BUY condition with the NYSE, DJIA, SP-500, and Russell 2000 remaining under a NEUTRAL condition. The SP-500 remains under a NEUTRAL condition despite the new highs for a few reasons.
The rally overall has been very V-shaped with stock indexes becoming short-term overbought. The overbought V-shape rally also came on below average volume following the heavy volume sell off. If the index was leading overall (like the Nasdaq was a couple of weeks ago), volume would not matter.
The SP-500 will re-enter a BUY condition if it can consolidate its gains here and then breakout to a new high. That new high will return the SP-500 into a BUY condition. This being said, a huge overall move across the board on heavy volume will flip all remaining NEUTRAL models into a BUY condition. There are too many leading stocks breaking out, setting up, or forming a bottoming-type of pattern to worry about the overall market volume.
We remain fully invested here going into the upcoming trading week. Our strategy currently is to ride our winners with trailing stops, sell our new positions that do not work immediately, and move that capital to any new signal or working position giving another signal. We are no where short for leadership. Our list of top stocks with top fundamentals forming constructive technical patterns is quite large.
Does that mean we are bullish? Absolutely not. We do not carry labels at Big Wave Trading. We follow the trend and adjust according to what the price of any giving instrument is currently displaying. When we lose we cut our losses and reduce our size. When we win we ride the wave higher and increase our size. It isn’t rocket science. But it does take extreme discipline. It isn’t for the lazy. It pays off as you can see below.
Thank you. Aloha.
TOP CURRENT HOLDINGS – PERCENT GAIN SINCE OUR SIGNAL DATE – DATE OF SIGNAL
VIPS long – 495% – 7/17/13
HEES long – 236% – 9/4/12
AER long – 180% – 6/27/13
WDC long – 130% – 1/9/13
TPL long – 126% – 10/22/13
USCR long – 80% – 4/12/13
