Aloha everyone. The Big Wave Trading market models are currently under an across the board operational NEUTRAL condition with the Russell 2000 under an operational SELL condition. We continue to hold our long-term winning stock positions and are currently around 60% invested on the long side in cash accounts. We are also maintaining a near 10% of account capital in a leveraged short position in the Russell 2000.
Despite the recent choppy action in the overall market, there is simply not enough evidence to suggest in which direction this market wants to ultimately go. The fact that we are not following through on big sell offs with further selling is a short-term positive. That being said, we simply can not get any follow through to any upside action when we do breakout past any recent trading range. With the lack of follow through in any direction, we will not be surprised if we simple continue to stay choppy.
We continue to focus on long signals and will continue to take our long signals as they are generated. However, due to the constant chop and the amount of recent immediate failures in new long signals we are requiring that our momentum oscillators (TSV, MACD, Wilders’ RSI, and Stochastics) confirm the price action of the stock. This will eliminate the weakest signals. On top of that, we have raised our stops on all positions and will give them very little leeway on the down side. Any current holding with only small gains have had their stops raised to at least break even. Small gains will not be allowed to turn into losses.
We recommend a neutral stance here until we can break out of the various price ranges that all of the major market indexes are trapped in. Even then, we will want to see some follow through to any breakout or breakdown before we gain any confidence in any new found direction this market decides to trend into. We wish you all the best in the upcoming trading/investing week. Thank you and aloha.
TOP CURRENT HOLDINGS – PERCENT GAIN SINCE SIGNAL DATE – DATE OF SIGNAL
VIPS long – +681% – 7/17/13
AGIO long – +90% – 9/24/14
PAYC long – +83% – 10/30/14
VDSI long – +78% – 8/4/14
SWKS long – +76% – 10/28/14
CBPO long – +75% – 10/24/14
VRX long – +63% – 11/17/14
ANAC long – +58% – 1/20/15
GIMO long – +57% – 2/2/15
RUBI long – +53% – 10/29/14
SKX long – +52% – 1/26/15
CVTI long – +50% – 11/3/14
ESPR long – +49% – 3/9/15
AFAM long – +47% – 1/8/15
AVGO long – +45% – 10/28/14
BLUE long – +44% – 2/25/15
EA long – +43% – 11/10/14
SERV long – +42% – 11/7/14
PANW long – +38% – 11/10/14
SERV long – +35% – 11/7/14
TERP long – +30% – 1/16/15
