The Big Wave Trading market models remain under a complete mix of signals, with the SPX, DJIA, COMPQ, and NDX under BUY signals, the RUT under a NEUTRAL signal, and the DJT under a SELL signal. These are all operational guideline signals and does not represent our actual holdings. When it comes to our actual holdings, we are back to fully invested with every single long position (and even our 2 hedges) currently trending/working in the right direction.
This past week was the least active week we have personally experienced at Big Wave Trading in over 2 years. We received only 4 new long signals this week (3 on Monday, 1 on Friday) and received only one full sell signal on Monday which was in a stock that already gave a 50% sell signal the week before. This stock was also a very speculative name and represented a tiny fraction of our portfolio. Every major long position we currently have either has large gains, small gains, or extremely tiny losses that have not hit our sell stop levels yet.
This kind of price action in our leading stocks is why it is so important to pay attention to leading stocks and not the overall market indexes. While mutual fund outflows continue, bears rise in the AAII and II surveys, and overall skepticism in the current rally increases, we continue to receive high quality long signals that continue to work. Only once these long signals start immediately failing along with some of our long term holdings failing will we stop taking these signals.
We know a lot of traders that sold off their holdings the past couple of months and now that the market is hitting new highs or near hitting new highs they remain well underinvested. If the market continues to trend higher, performance chasing will more-than-likely ensue with underinvested bulls scrambling to get long so that they don’t “miss out” on further potential gains.
No matter what the future holds we have a plan. This market can continue to rally, it can continue to chop, or it can reverse and go lower. We simply do not care. We have our rules and will follow them accordingly. For now, the trend is still our friend (unless you are only long Transportation related equities) and until it bends or ends there is nothing more to do than take our signals and obey our rules. When the signals start failing, we will reign in the buying. If the signals keep working, we will continue buying. Keep it simple. Don’t try to overthink this market.
We wish you the absolutely best this long Memorial Day holiday weekend. I’ll see you in the chat room on Tuesday. Thank you and aloha.
TOP CURRENT HOLDINGS – PERCENT GAIN SINCE SIGNAL DATE – DATE OF SIGNAL
VIPS long – +610% – 7/17/13
AGIO long – +135% – 9/24/14
PAYC long – +102% – 10/30/14
CBPO long – +95% – 10/24/14
VDSI long – +90% – 8/4/14
ANAC long – +89% – 1/20/15
SWKS long – +87% – 10/28/14
BLUE long – +85% – 2/25/15
SKX long – +73% – 1/26/15
VRX long – +73% – 11/17/14
GIMO long – +66% – 2/2/15
ESPR long – +60% – 3/9/15
AVGO long – +57% – 10/28/14
RUBI long – +52% – 10/29/14
EA long – +51% – 11/10/14
PANW long – +49% – 11/10/14
CVTI long – +45% – 11/3/14
SERV long – +44% – 11/7/14
EGRX long – 31% – 4/9/15
TERP long – +30% – 1/16/15
RCPT long – +28% – 2/20/15
DRRX long – 27% – 4/8/15
