NASDAQ Continues Higher as Dow Jones and S&P 500 end Flat

Just another day in this uptrend where price action remains strong.  The last hour of trading would leaves a bit to be desired, but overall the action remains very positive.  This market continues to defy the odds as “overbought” indicators are signalling this market should pull back.  Regardless of a pullback we had plenty of stocks breakout today with volume.  Not too mention we continue to have stocks breaking out of fresh bases.  Our uptrend continues, do not fight it.

Where is the distribution?  It is quite interesting for those who continue to believe we are going lower to have virtually no distribution.  Institutions have been buying stock in this market and not selling it.  Heavy volume selling we saw at the end of January and beginning of February has simply been overlooked.  In the end, price superseded opinion and price will always supersede opinion.

I want to make a point about March 2009 where the market was severely OVERBOUGHT.  Oscillators often can run longer than you would expect.  Price and volume action is what we need to focus on and the other “indicators” are noise for the new and even professional investors.

We have plenty of stocks that are setting up, but many would look much better with handles.  The most powerful pattern is the cup-with-handle chart pattern.  There are a few stocks, leading fundamental stocks which have cup shaped bases, but would be best served with a handle.  Handles also provide us with an opportunity to get long before the breakout.  Our chat room always is on top of these stocks and we are able to identify these moves.

February 11th, 2010 was the day Big Wave Trading saw the market confirm the current uptrend and the important note here was we had a strong price action with volume.  In addition, we had plenty of strong fundamental stocks setting up and breaking out.  If you have missed this current rally, don’t chase stocks and secondly make sure you sign up with us.  There isn’t a reason why you are long any stocks in this market with the abundance of charts setting up.  But, the biggest mistake you can make is chasing stocks.  Chasing stocks is a bad game as it will wear out your portfolio, stay disciplined.

We do have stocks setting up and believe this market has what it takes to continue the uptrend.  Remember, always to cut your losses short, avoid chasing, and ride your winners.  One thing many traders tend to forget is to take profits.  Riding your winners is a smart approach, but at least lock in profits along the way.  If the stock warrants buying back shares you sold, you do so, but always lock in some profits as the stock moves higher.

Enjoy Tuesday!