The Big Wave Trading portfolio remains under a BUY condition across the board, as stock indexes continued to move higher last week. While this market is overbought on many different oscillators I follow on a daily basis, the weekly oscillators remain well off overbought levels. This hints at a very strong market that could continue to remain overbought and leave many underinvested bulls “priced out.”
We are fully invested in one of our portfolios and nearly invested in the other active portfolio and now it becomes a job of rotating out of losing positions into new winning positions. All week long there were breakouts each and every day across many different sectors. With high quality stocks from various sectors acting like they currently are, we would expect for further price appreciation in the overall market to occur. That being said, there will always be poor selections. Cutting your losses and moving on to better options remains the preferred methodology here.
There is not a lot we need to go over here. It is concerning that the bears are gone and that the bulls are becoming more embolden in their rally cries. However, price is firmly in an up direction, with or without volume, and that will remain the only piece of information that we will focus on. This being said, we do recognize that we are short-term overbought and have become overbought on overall below average to average volume on the indexes. This does increase the odds for a harsh quick correction. This is why we continue to have protecting hard Sell Stops on the books on all positions. There will be no nasty surprises for us.
Have a continued great rest of your weekend and we wish you all the best during the upcoming week. As long as we continue to see fresh breakouts daily in various leading industry groups, we will continue to operate on the long side and let everyone else try to top call this market. Thank you. Aloha.
Top Current Holdings – Percent Gain – Date of Signal
VIPS long – +583% – 7/17/13
OVAS long – +138% – 8/8/14
VDSI long – +89% – 8/4/14
AGIO long – +67% – 9/24/14
RENT long – +47% – 9/24/14
PAYC long – +33% – 10/30/14
