The Big Wave Trading models remain mixed with the Nasdaq and Nasdaq 100 operating under a BUY signal and the NYSE, SP-500, DJIA, and Russell 2000 operating under a NEUTRAL signal. Despite the mixed signals, we are fully invested on the long side (with a small UVXY hedge) as we head into the holiday shortened Thanksgiving trading week.
The rebound this week following the losses the prior week was definitely a sign of strength for the overall market. We still have significant resistance levels to deal with overhead but we are heading into a historically/seasonally bullish period for stocks with a lot of leading individual stocks showcasing very strong technical patterns that should lead to further upside appreciation in the market.
At the start of the week there was a little bit of concern on our end that we got fully invested too fast. However, we obeyed our signals and our stop levels. We continued to take new long signals and we did not sell stocks simply to sell stocks to reduce our long exposure. We stuck with our gameplan and by the end of the week it paid off significantly.
If the market continues to rise here we are positioned in a lot of leading stocks with extremely strong technical patterns that should allow us to well outperform the overall market if it does indeed rally. If the market does throw us a curveball and this strong setup is part of a major fakeout we now have enough gains in individual names that we will be able to at least leave with small gains, breakeven, and/or with insignificant small losses.
We are going to continue to keep it simple and simply follow price here. We will continue to take all high quality long signals that trigger and cut our losses fast when we are wrong. If the market was as weak as many think it is, I can unequivocally state that there is no way we would be receiving so many quality actionable signals. Are they perfect? No. Are they strong enough that they must be taken? Yes. Rules are rules.
As we head into the historically bullish time of the year, we do not suggest fighting seasonality unless price is not confirming the seasonal move. If price is moving in confirmation with seasonality it is not wise to fight the trend. With all the actionable signals that continue to produce gains immediately out of the gate, we have all the confirmation that we need that for now we are on the right side of the trade.
Obviously, anything can and will happen in the market. We have contingency plans for every and all outcomes. For now, we will continue to operate with the trend that has dominated since the October lows. When long signals dry up and/or if they start failing and distribution days start to pile up in the overall market, we will go into a defensive stance in regards to the overall market. Right now, we are on offense.
If you have been underperforming the market lately and/or do not see the strong technical patterns that are out there, come take a free trial with us. Every signal long, short, sell, and cover on an EOD basis are posted in real time before the orders are entered on our end. As you can see below, when conditions are favorable, significant gains can be realized in a short period of time. We wish you all the best during the upcoming holiday-shortened trading week. Have fun and be safe. Aloha from the west side of Maui where winter is coming.
TOP CURRENT HOLDING – PERCENT GAIN SINCE SIGNAL DATE – SIGNAL DATE
PAYC long – +142% – 10/30/14
HCKT long – +53% – 6/18/15
TGS long – +31% – 10/27/15
MEET long – +30% – 10/9/15
FSB long – +26% – 10/23/15
MXL long – +26% – 10/9/15
EPAM long – +25% – 4/2/15
