The Big Wave Trading portfolio is currently under an across the board operational BUY mode with no pressures weighing against this signal. Major market averages are hitting new highs with no distribution pressure, our momentum oscillators (TSV, MACD, Stochastics, and Wilder’s RSI) are confirming the price action, the NYSE ADV/DEC line is confirming the current move, and leading stocks continue to set up and breakout across various leading sectors. The only negative data point in the mix is the lack of bearish sentiment.

The good news for bulls is that sentiment does not move the market. Money does. That money can be tracked by following one key data point. Price. When price is hitting new highs with leading stocks in confirmation, everything else is irrelevant. Even volume. Not like that has mattered on the upside since 2009 anyways. As long as we are trending higher and continue to digest the gains occasionally, there is no reason to fight the price action. Especially in an environment where interest rates are not rising and remain historically low.

There is very little we can add this weekend that we have not already gone over the past two weekends. We remain fully invested only moving money around when we have an occasional laggard hit our portfolio. Our portfolio is stacked with leading stocks that are finally starting to get some momentum on the upside at an above average pace compared to the slow early starts that most of our names have displayed. This theme has been a continuous one since 2009. Before 2009 we found that our best stocks blasted higher right out of the gate. Now, it seems, that patience is being rewarded on our end. Before 2009 a lot of these stocks would not have passed our “hold” smell-test.

The new market environment where returns are much lower than what we were accustomed to from 1996-2008 continues to annoy us but it is what it is. If the market continues to trend higher here into spring the returns that you currently see below in our top current holdings are going to be much higher in a couple of months. If the market decides to reverse course and head lower, then we will let our Sell Stops take us out of the positions with the gains that we currently have. It would be nice to be long more stocks moving up 20% in a 3-4 weeks but when the market as a whole is not being accumulated heavily this is to be expected.

The below average volume rallies continue and as long as that is the case gains are not going to be as juicy as they would be if we had a market under massive accumulation. Stocks like VIPS would normally be up 1,000% for us by now. Instead it’s up 600%. There is still hope for more gains in the short-term as my momentum oscillators that I mentioned above are still not at extreme overbought conditions. There is still plenty of room for these indicators to run before they hit extreme overbought levels. And even then, overbought markets can stay overbought longer than shorts can stay solvent.

Despite the strong market we will remain on guard as we know low volume rallies can lead to sharp and quick heavy volume sell offs. As long as the Fed is not raising rates, we will look at these pullbacks as potential buying opportunities. If the market sells off and stocks start breaking down everywhere then we will reevaluate our position on the current market. For now, there is no reason to talk or trade this market down. We might be up 8 straight days on the Nasdaq but we could easily make it 13. Nothing says it has to pullback. When market participant are priced out, they’re priced out.

For now, it’s steady as she goes. If the market reverses, we have our stops. I doubt we will have to worry about them being hit but we are ready for everything. And I mean everything. No matter what happens next week, we will be prepared and take the appropriate reaction. We are never married to our thoughts, opinions, or our positions. We are only married to the Scientific Method.

Have a wonderful and profitable upcoming week. Stay warm everyone. Aloha from a very warm Maui where snow is never a concern. Neither is cold weather. Once again, aloha.

TOP CURRENT HOLDINGS – PERCENT GAIN SINCE SIGNAL – SIGNAL DATE

VIPS long – +616% – 7/17/13
OVAS long – +355% – 8/8/14
AGIO long – +111% – 9/24/14
VDSI long – +93% – 8/4/14
PAYC long – +91% – 10/30/14
RUBI long – +53% – 10/29/14
SWKS long – +51% – 10/28/14
TASR long – +45% – 11/10/14
EA long – +39% – 11/10/14
CBPO long – +38% – 10/24/14
AVGO long – +33% – 10/28/14
PANW long – +29% – 11/10/14
SERV long – +27% – 11/7/14
ANAC long – +26% – 1/20/15
VRX long – +26% – 11/17/14