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	<title>How To Invest - How To Buy Stocks - Big Wave Trading &#187; accumulation</title>
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	<description>How to invest in the stock market today. Join Joshua Hayes at Big Wave Trading to learn how to buy stocks in good markets and avoid heavy losses in bad markets.</description>
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		<title>Stocks Advance in Heavier Trade; AAPL Gains</title>
		<link>http://bigwavetrading.com/7498/stocks-advance-in-heavier-trade-aapl-gains/</link>
		<comments>http://bigwavetrading.com/7498/stocks-advance-in-heavier-trade-aapl-gains/#comments</comments>
		<pubDate>Wed, 08 Sep 2010 21:42:34 +0000</pubDate>
		<dc:creator>BigWave_Trader</dc:creator>
				<category><![CDATA[Commentary]]></category>
		<category><![CDATA[aapl]]></category>
		<category><![CDATA[accumulation]]></category>
		<category><![CDATA[Federal Reserve]]></category>

		<guid isPermaLink="false">http://www.bigwavetrading.com/?p=7498</guid>
		<description><![CDATA[Federal Reserve&#8217;s beige book showed deceleration in 5 of 12 regions tripping up stocks mid-day The market notches an accumulation day with volume jumping higher than Tuesday’s depressed levels.  It was important to see a day of accumulation for this market since last week’s follow-through day.  Stocks ran into a bit of resistance prior to [...]]]></description>
			<content:encoded><![CDATA[<h3>Federal Reserve&#8217;s beige book showed deceleration in 5 of 12 regions tripping up stocks mid-day</h3>
<p>The market notches an accumulation day with volume jumping higher than Tuesday’s depressed levels.  It was important to see a day of accumulation for this market since last week’s follow-through day.  Stocks ran into a bit of resistance prior to the release of the Federal Reserve’s Beige book.  However, the market was able to rebound from the initial selling and close above the mid-point of the session.  A true sign of strength is for the market to be able to rebound after a bout of selling.  The market had plenty of opportunity to roll-over and succumb to selling, even late in the day it appeared the market would give up and buyers would have no of it.  Accumulation is a great sign and today was an all-around positive day for stocks.</p>
<p>It would be nice for this market to continue to work sideways with accumulation sprinkled in between light volume pull backs.  At the moment the percentage of stocks over their 20dma is at 76%, but the number the stocks over their 200dma is only 57%.  Far from being “overbought” by any stretch of the imagination, but we could see a bit of selling pressure as we continue to digest last week’s gains and today’s accumulation.  By no means is this a bearish signal for this newly confirmed uptrend.  It does highlight a point of not chasing stocks as you will get burned.</p>
<p>Apple Computer (AAPL) lead the NASDAQ today gaining more than five points on higher volume helping the NASDAQ today.  The move came on the back of news the antenna issue would cost the company 20% of sales here in the US.  It appears the market has other ideas regarding the direction of AAPL.  Listening to opinions and not the market will cause trading mishaps and missed opportunities.  AAPL today highlights opinions mean very little in the market and only price and volume action rule.</p>
<p>An area I have yet to discuss in some time is the put to call ratio.  Today the CBOE put/call ratio ended the day at .93 showing a bias towards the downside.  But, again Index puts dominate over calls as traders look to hedge portfolios with index puts.  On the equity side, call options dominate the trading action showing an almost 2 to 1 advantage over puts.  This has been the case since early July as we have seen equity call options continue to reign supreme over puts.  It certainly gives a mixed picture, but the fact is a clouded picture is not one we want to rely on.  Given we have a confirmed uptrend and superb Leadership, it is hard to extract much meaning from the put to call ratio at this juncture.</p>
<p>Overall, we had a good day in the market with market leaders continuing to dominate the market’s stage.  Accumulation is always a nice sign, but would be nice for the market to consolidate gains.  Tomorrow traders will certainly be focused on jobless claims figures while we’ll be paying attention to the action of the market.  Focus on what matters and everything else is just noise!</p>
<p>Keep those losses small!</p>
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		<title>Stocks Rally For Second Straight Day, On Lower To Flat Volume; Funds Still Have No Interest In This Market</title>
		<link>http://bigwavetrading.com/172/stocks-rally-for-second-straight-day-on-lower-to-flat-volume-funds-still-have-no-interest-in-this-market/</link>
		<comments>http://bigwavetrading.com/172/stocks-rally-for-second-straight-day-on-lower-to-flat-volume-funds-still-have-no-interest-in-this-market/#comments</comments>
		<pubDate>Wed, 21 Mar 2007 04:12:08 +0000</pubDate>
		<dc:creator>Josh Hayes</dc:creator>
				<category><![CDATA[default category]]></category>
		<category><![CDATA[accumulation]]></category>
		<category><![CDATA[adza]]></category>
		<category><![CDATA[bad news]]></category>
		<category><![CDATA[breadth]]></category>
		<category><![CDATA[dead cat]]></category>
		<category><![CDATA[djia]]></category>
		<category><![CDATA[hod]]></category>
		<category><![CDATA[lows]]></category>
		<category><![CDATA[moving average]]></category>
		<category><![CDATA[Nasdaq]]></category>
		<category><![CDATA[rallies]]></category>
		<category><![CDATA[sp 500]]></category>
		<category><![CDATA[stock market]]></category>

		<guid isPermaLink="false">http://www.bigwavetrading.com/2007/03/20/stocks-rally-for-second-straight-day-on-lower-to-flat-volume-funds-still-have-no-interest-in-this-market/</guid>
		<description><![CDATA[It was another day of light gains, for the stock market. However, today, had a bit more of a steady bullish bias to it, unlike yesterday, as big-cap indexes closed near their HOD. The good news for stocks came on the back of a better-than-expected housing starts number for February. That number was up 9% [...]]]></description>
			<content:encoded><![CDATA[<p>It was another day of light gains, for the stock market. However, today, had a bit more of a steady bullish bias to it, unlike yesterday, as big-cap indexes closed near their HOD. The good news for stocks came on the back of a better-than-expected housing starts number for February. That number was up 9% for the month, which is much better than the 14% drop in January. The bad news, in that mix, came from building permits as they fell again by 2.5%. The other positives effecting stocks was M &#038; A activity. The news that CYTC is making a full bid for ADZA and that PALM might receive a bid for its business might have had a positive impact on stocks.<span id="more-172"></span></p>
<p>At the close, the SP 600 led the way with a .8% gain, retaking its 50 day moving average. The NYSE rallied .7%, the SP 500 and Nasdaq each gained .6%, and the DJIA gained .5%. The IBD 100 led again, for the second straight day in a row, with a .8% gain. That is two days now that the index has been on pace or kept ahead of the market. NYSE volume was slightly lower and the volume on the Nasdaq was lower by 4%, indicating that big institutional firms still have no interest in snapping up large amounts of shares here. Advancers beat decliners by a 5-to-2 margin on the NYSE and by a 2-to-1 margin on the Nasdaq. New highs beat new lows by 211 to 68. The breadth and new highs show that there still appears to be more upside left in this dead cat, high put/call (1.1) ratio bounce.</p>
<p>I am still only calling this a bounce, because I am not seeing ANY new stocks appear on my scans with green beautiful charts. And I am not seeing any accumulation what-so-ever on the indexes. We are going into day six of the rally attempt. If we do not get a 1.7% gain on heavier volume tomorrow or on day seven, the chances of us getting a rally that will produce anything special is greatly reduced. Remember how long it took the rally off the July/August lows to get started last year? It was well over 10 days. That launched one of the weakest rallies I have EVER been a part of. Only 180 stocks made 100% gains or more during that advance. That is stunningly pathetic. The longer we wait on the follow-through, the less of a chance we have of having a great rally. I am not looking for a follow-through to happen and even if we get one I expect it to fail shortly after. We really have a LOT/TON of work to do to fix the mess that the February 27th sell-off created.</p>
<p>However, there are a TON of impatient traders out there that have learned NOTHING from history&#8217;s greatest traders. Livermore, Loeb, O&#8217;Neil, Baruch all knew how important it was to sit on cash and not invest when the odds were not in your favor. How do you know when the odds are not in your favor? When the indexes are not in a serious uptrend or downtrend. When they are going back and forth like this it has always been the cash play that has been the smart play. The impatient and history ignorant traders that are swinging for the fences in this market are going to eventually be served a very painful reminder on why it is not smart to make overly bullish or bearish bets in a market that is confusing like this one is. These traders will NEVER learn and it is probably for the better as they ensure an even more liquid market for trend traders to enter.</p>
<p>If you feel like you are missing out on the action, then trade with a little bit of your money. Just don&#8217;t make any stupid bearish or bullish bets with all your cash in this market. There is for sure to be more wild price action in the coming weeks, depending on what the FOMC has to say. That meeting wraps up tomorrow at its usual 2:15EST. Nothing new is expected to come out and the Fed is expected to hold rates steady at 5.25% for the sixth straight time. The wording in the statement is what all commentators will be focusing on. It seems that a slowing economy and inflation is what is occurring now in our markets. If that is the case I sure wouldn&#8217;t be looking for the Fed to be cutting rates anytime soon.</p>
<p>Tomorrow the fireworks will all be over the Fed. However, we are setting up for a positive open tomorrow, on the back of good earnings reports from ORCL and ADBE. This positive open is sure to cause the early shorts more pain. Everyone was asking me three weeks ago why I wasn&#8217;t shorting everywhere. Well the past two days of gains is one of the reason. The other reason is simply history. The best time to short stocks is FIVE TO SEVEN MONTHS AFTER THEY HAVE TOPPED. Being too early has cost many great traders many profits. I am not one of these traders who will lose my profits by trying to be a hero. I don&#8217;t want the top and the bottom. I want the big meaty middle; the filet-mignon, if you will.</p>
<p>Before I wrap it up for the night and go out to see the movie &#8220;300,&#8221; I want to bring to your attention one key stat I saw today: The Singular Research group offered a report today stating that margin debt is at a new all-time record of $296 million in February. This is considered a contrarian indicator and signals that the crowd overall is very bullish buying stocks on margin. Do you know when the last all-time high was? It was in March of 2000. The month that the meltdown in tech and internet stocks started. Take it for what it is but this report has not seen those numbers since the last IMPORTANT top in the stock market. The current short interest on the NYSE is very low and the amount of share buybacks are still very bullish overall for the market but the crowd is going out on a limb buying stocks and in the long-term that could be very negative. On the short-term though it is hard to argue with all the share buybacks.</p>
<p>Which side is right? We don&#8217;t know yet. CASH IS KING!!! right now. Until we get a clear trend and truly know which side is the right side, I will continue to play the beautiful longs that setup and the ugly shorts that setup. There isn&#8217;t a lot on either side, which tells me we still have more time to tire and frustrate the weak traders and investors, in this market. I hope you had a great day. I had a TON of errands to run and had to help out a vehicle-less friend all day so I apologize for the lack of showing up in the chat room today.</p>
<p>Aloha and I will see you in the chat room tomorrow. Remember, CASH IS KING!!!</p>
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		<title>Stocks Find Intraday Support, Again, With All Indexes Closing Higher On The Day; Leading Stocks Continue Outperformance</title>
		<link>http://bigwavetrading.com/142/stocks-find-intraday-support-again-with-all-indexes-closing-higher-on-the-day-leading-stocks-continue-outperformance/</link>
		<comments>http://bigwavetrading.com/142/stocks-find-intraday-support-again-with-all-indexes-closing-higher-on-the-day-leading-stocks-continue-outperformance/#comments</comments>
		<pubDate>Wed, 07 Feb 2007 07:16:28 +0000</pubDate>
		<dc:creator>Josh Hayes</dc:creator>
				<category><![CDATA[default category]]></category>
		<category><![CDATA[accumulation]]></category>
		<category><![CDATA[breadth]]></category>
		<category><![CDATA[djia]]></category>
		<category><![CDATA[moskow]]></category>
		<category><![CDATA[NYSE]]></category>
		<category><![CDATA[products group]]></category>
		<category><![CDATA[sp 500]]></category>
		<category><![CDATA[steel products]]></category>
		<category><![CDATA[stock market]]></category>
		<category><![CDATA[treasury secretary]]></category>

		<guid isPermaLink="false">http://www.bigwavetrading.com/2007/02/07/stocks-find-intraday-support-again-with-all-indexes-closing-higher-on-the-day-leading-stocks-continue-outperformance/</guid>
		<description><![CDATA[It was yet another driftless day for stocks, overall, as comments from Fed heads Bernanke, Yellen, Moskow, and the Treasury Secretary had no major effect on the stock market. There was no catalyst for stocks to move in one way or the other. It was basically about earnings action in individual stocks and nothing else, [...]]]></description>
			<content:encoded><![CDATA[<p>It was yet another driftless day for stocks, overall, as comments from Fed heads Bernanke, Yellen, Moskow, and the Treasury Secretary had no major effect on the stock market. There was no catalyst for stocks to move in one way or the other. It was basically about earnings action in individual stocks and nothing else, today.</p>
<p>At the close, the SP 400 and 600 led the way, hitting all-time highs, with .5% gains, the NYSE followed, hitting all-time highs, with a .34% gain, the SP 500 was next with a .07% gain, and the DJIA and the Nasdaq finished with a .04% gain. Leading stocks kept up with the SP 400 and 600, with the IBD 100 gaining .4% on the day. It is very positive to see the leaders continue to keep pace with the leading indexes of the day.</p>
<p>Volume was slightly higher on the NYSE and well higher on the Nasdaq. The higher volume, combined with the very nice intraday price reversal, gives today&#8217;s action a sense of accumulation off this dip to the 50 dma. It can only be bullish to see buyers stepping in here to support stocks at this key moving average.</p>
<p>Breadth was positive on both the NYSE and the Nasdaq&#8211;which is good because with such little change breadth easily could have been flat. Advancers beat decliners by a 5-to-3 margin on the NYSE and by an 8-to-7 margin on the Nasdaq.</p>
<p>It was another day of clear outperformance by leading and small cap stocks. Not to be left out, the NYSE, has been showing some incredible strength too. That is mainly due to the strength in the Building and Steel stocks. The IBD Steel-Specialty Alloy group has risen from 157 to 2 in the past three months, the Steel-Products group has risen from 94 to 13 the past three months, and the Building-Residential/Commercial has risen from 189 to 12. This is some extreme strength the past three months in three economically sensitive groups. These groups are old leaders but with the overall broad strength in this rally, I personally think it is a good thing to see the old leaders rise with new leaders. However, I am finding few if any stocks in these groups that I want to go long. That might be a sign something isn&#8217;t right. However, with all these groups rising, things are obviously going well.</p>
<p>The losers of the day were the Semiconductors, with the SOX index giving up .5% today. However, this is of no surprise to seasoned chart readers as the stock has failed to hold above the 50 and 200 dmas, broke down below the December lows in January, and continues with its steady downtrend from January 2006. There are few leading stocks doing well in this sector, and with most markets hitting new highs while this SOX index lags, there is no reason to be long stocks en masse in this sector.</p>
<p>The put/call is still pretty high, sitting at .85. This shows me people are still placing there bets on the short side, even though the market keeps hitting new highs. This is very bullish for further stock gains. This is probably why EVERY dip is getting bought, with no end in sight, for now.</p>
<p>We shall see how the market does tomorrow, off of CSCO&#8217;s earnings. I doubt it will have much of an impact but I am sure it will be the topic of the morning on CNBC and in the chat rooms and message boards. Don&#8217;t fight the tape and keep playing this trend till it ends. This is an amazing bull market and until we get clear distribution it pays to stay long and strong.</p>
<p>Great luck and I will see you tomorrow in the Chat Room. Aloha!</p>
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		<title>Afternoon Rally Gives Stocks Support, Off Of Yesterday&#8217;s Selloff; Nasdaq Holds Its 50 DMA, SP 600 Regains Key Line.</title>
		<link>http://bigwavetrading.com/130/afternoon-rally-gives-stocks-support-off-of-yesterdays-selloff-nasdaq-holds-its-50-dma-sp-600-regains-key-line/</link>
		<comments>http://bigwavetrading.com/130/afternoon-rally-gives-stocks-support-off-of-yesterdays-selloff-nasdaq-holds-its-50-dma-sp-600-regains-key-line/#comments</comments>
		<pubDate>Sat, 20 Jan 2007 18:46:41 +0000</pubDate>
		<dc:creator>Josh Hayes</dc:creator>
				<category><![CDATA[default category]]></category>
		<category><![CDATA[accumulation]]></category>
		<category><![CDATA[breadth]]></category>
		<category><![CDATA[decline]]></category>
		<category><![CDATA[djia]]></category>
		<category><![CDATA[fraction]]></category>
		<category><![CDATA[indexes]]></category>
		<category><![CDATA[leading indicator]]></category>
		<category><![CDATA[loser]]></category>
		<category><![CDATA[Nasdaq]]></category>
		<category><![CDATA[s market]]></category>
		<category><![CDATA[sp 500]]></category>

		<guid isPermaLink="false">http://www.bigwavetrading.com/2007/01/20/afternoon-rally-gives-stocks-support-off-of-yesterdays-selloff-nasdaq-holds-its-50-dma-sp-600-regains-key-line/</guid>
		<description><![CDATA[Stocks were able to find some support, yesterday, after a nasty selloff on Thursday did some damage to stocks. IBM started the day off wrong when its stock gapped down over 3.5% and put pressure on the indexes. However, a late afternoon rally, for no apparent reason, helped lift the SP 500 and Nasdaq to [...]]]></description>
			<content:encoded><![CDATA[<p>Stocks were able to find some support, yesterday, after a nasty selloff on Thursday did some damage to stocks. IBM started the day off wrong when its stock gapped down over 3.5% and put pressure on the indexes. However, a late afternoon rally, for no apparent reason, helped lift the SP 500 and Nasdaq to a positive close.<span id="more-130"></span></p>
<p>At the close, the SP 600 led the way with a .8% gain, the Nasdaq and SP 500 followed with a .3% rise, and the DJIA was the lone loser but it only ticked down a fraction. Leading stocks did their thing today, keeping up with the SP 600, rising .8%. The big winner was the NYSE. That index rallied to a new all-time high.</p>
<p>Volume was much lower on the Nasdaq, not giving a particularly positive situation to this bounce, after such a sharp decline on heavier volume yesterday. NYSE trade was slightly higher, giving that index an accumulation day.</p>
<p>Breadth was positive on both indexes, with advancers over decliners by a 3-to-2 margin on the Nasdaq and by a 2-to-1 margin on the NYSE. Good strong breadth on a day of support, after a selloff, is nice to see.</p>
<p>It was a rough week, for the Nasdaq and SP 600, with each falling 2% and .75% respectively. The SP 500 also lost .02%. The DJIA and the NYSE, however, escaped with gains, rallying .1% and .4% respectively. Big-cap non-tech are still holding this market up, even with big-cap tech trying to drag it down.</p>
<p>The worst performer was the SOX index. That index got trashed by 5.3% and TONS of stocks broke down from solid bases. I listed them in the last post, on Thursday&#8217;s market. That index is normally like by traders to be a leading indicator of momentum stocks and the ability to make a lot of money in the market. Well, if that is any indicator, the market is not going to offer a lot of speculative money. The long-term trend is down, the intermediate is up, the sub-intermediate is down, and the short-term is down.</p>
<p>Anyone long this extremely weak sector needs to reevaluate their trading strategy and reason to be long this sector. They are being sold hard and they are being sold all-around.</p>
<p>Overall, it was a rough week, but what do you expect from a market that has gone basically straight up since August without a reall selloff.</p>
<p>Avoiding a fourth straight down day for the Nasdaq is an accomplishment in and of itself after such a nasty selloff we saw on Wed and Thurs. As I said yesterday, signs have been pointing for an upcoming selloff for a little while now.</p>
<p>With big-caps leading, breadth poor, growth stocks taking forever to take off, and new highs contracting this rally has a feel of a rally near the end of its great bull.</p>
<p>Still trying to predict a top, after four years of gains is pretty stupid, imo. How many top pickers have I met the last four years that no longer trade for a living? Sadly, I don&#8217;t even think I can count that high (I am exaggerating).</p>
<p>The trend is still up and the fact that the Nasdaq, again, found support at the 50 dma is very positive for the chances of further price gains. Heck, the NYSE hit all-time highs. How can it be smart to be short here? It isn&#8217;t.</p>
<p>The fact of the matter is any selloff has plenty of room underneath and stocks in uptrends to find support from institutional traders. It is when the markets start A CLEAR DOWNTREND and we have multiple distribution days that we need to take caution. Three in the past four weeks is a lot, for the Nasdaq. But until we get one more and a clear downtrend can be seen on this index betting against the trend is simply retarded.</p>
<p>The greatest traders of all-time NEVER bet against the trend; EVER! They waited until the market was giving no new buy candidates, there longs were violating key support areas, the markets were in downtrends, and for leaders to start selling off, across the board, on heavy volume. We are not there yet.</p>
<p>The other important thing to remember, which IBD hit on this weekend, is the fact that this is normal for a market to have pullbacks in uptrends. I hate markets that rally like this without a selloff. Why do I hate it? Because, normally your biggest one day declines happen after stocks race higher and higher and higher without ever having a normal pullback.</p>
<p>Some of the biggest price declines in history of the stock market come during a bull market. Visa versa with selling. Some of the biggest up days in the market come in the middle of bear markets. It is obvious why this happens. These one day sharp declines ALWAYS scare the weak bulls into selling there good longs. I know many traders who let go of stocks on Friday only to see them rebound and hold their moving averages.</p>
<p>In bear markets, short squeezes always nail bears who bet too far on the short side. When this happens normally rational decisions are then left far behind and the next thing you know you are covering a stock just as it is about to top out on the short term and resume the downtrend. The market is a cruel beast. And I love it!</p>
<p>This is why you must stay disciplined, disciplined, disciplined. I can not believe some traders sold perfectly great stocks with HUGE EPS and sales growth when the chart did not flash a sell signal. This is panic trading, and though you will never go broke this way, one thing is for sure: You will never become extremely wealthy that way either.</p>
<p>What is the stock going to do in the future? I don&#8217;t know and NO ONE does. When they tell you they know, they ARE LYING TO YOU. The market has been up for four years and we now have big cap stocks leading when they have not the entire way. I have studied enough market cycles to know that at the end these stocks lead. This rally could last another six month, for all I know. However, I am starting to plan for a correction, in my head. I just wont bet against the market.</p>
<p>Until that correction happens, I am going to continue to stocks with beautiful green charts and some sort of strong fundamental growth. When they stop showing up, then I will know my feelings are in step with the market.</p>
<p>The first signs of a slowing in the economy, besides an inverted yield curve and slowing economic data, is recent earnings.</p>
<p>Positive surprises have outnumbered negative surprises by a ratio of about 1.5-to-1, Zacks Investment Research says. At this point during Q3 earnings season, positive surprises outnumbered negative ones by a ratio of better than 2-to-1. Earnings growth keeps rising. But the median company in Zacks&#8217; universe has banked Q4 profit growth of 9.4% Ã¢â‚¬â€ below some recent double-digit tallies.</p>
<p>This is clearly showing a slowing economy that is now starting to hit the financial statements of stocks.</p>
<p>It was a good day Friday, not seeing the market follow-through with even more selling but still with the lack of volume I am not sure how much the bulls can muster here to overcome the recent selling pressure.</p>
<p>We will see what next week has in store for us. Aloha and I will see you in the Chat Room!</p>
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		<title>Oil&#8217;s Collapse Helps Lift All Indexes On Higher Volume; Nassy Near Six-Year Highs.</title>
		<link>http://bigwavetrading.com/125/oils-collapse-helps-lift-all-indexes-on-higher-volume-nassy-near-six-year-highs/</link>
		<comments>http://bigwavetrading.com/125/oils-collapse-helps-lift-all-indexes-on-higher-volume-nassy-near-six-year-highs/#comments</comments>
		<pubDate>Fri, 12 Jan 2007 07:08:17 +0000</pubDate>
		<dc:creator>Josh Hayes</dc:creator>
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		<guid isPermaLink="false">http://www.bigwavetrading.com/2007/01/12/oils-collapse-helps-lift-all-indexes-on-higher-volume-nassy-near-six-year-highs/</guid>
		<description><![CDATA[Stocks gapped up in the morning, held those levels, and rallied for the rest of the day on the back of another back-breaking decline in oil. This huge 4% drop in oil helped the entire market rally, on Thursday. Oil has now fell 15% in 2007. At the close, with techs and small caps leading, [...]]]></description>
			<content:encoded><![CDATA[<p>Stocks gapped up in the morning, held those levels, and rallied for the rest of the day on the back of another back-breaking decline in oil. This huge 4% drop in oil helped the entire market rally, on Thursday. Oil has now fell 15% in 2007.</p>
<p>At the close, with techs and small caps leading, the SP 600 gained 1.2%, the Nasdaq rallied 1% breaking out above the December highs, and the SP 500 and DJIA gained .6%. The DJIA also hit another all-time high.</p>
<p><span id="more-125"></span></p>
<p>The great news today, however, comes in the form of leading stocks. The IBD 100 gained 1.3%, leading the market. The Nasdaq 100 also gained 1%.</p>
<p>Volume was higher on both the NYSE and the Nasdaq. This was also the third day in a row the Nasdaq made gains with volume picking up over the day before. This is clear accumulation by the big boys right off the 50 dma.</p>
<p>By looking at a daily candlestick chart of the Nasdaq, you can clearly see that all seven trading days for 2007 have seen buyers come in and support stocks off the lows of the session. All the tails you see on your Nasdaq chart right on the 50 dma is about as perfect support as you will EVER see at a key moving average.</p>
<p>Breadth was positive on both the NYSE and the Nasdaq by more than a 2-to-1 ratio. Leading stocks saw even better breadth, as did my own portfolio.</p>
<p>The strength of today&#8217;s rally just reinforces what I keep saying: You should never short a rising market. The major market indexes are hitting all-time and six year highs right now. There is NO reason to be shorting.</p>
<p>Though I was worried about the recent action in the market I still recognized that we have not turned bearish yet. Until 3 out of the 4 trends (short to long) are in downtrends, you should never short.</p>
<p>This market has continued to make early top callers look foolish. It doesn&#8217;t look like that is about to change any time soon, as some market analyst are calling for earnings season to be the top of the market.</p>
<p>I wouldn&#8217;t want to be short this market. Especially with such broad strength.</p>
<p>With oil down 15% to $51 a barrel, money has rotated into many sectors. Some of the best performing sectors the past three months have directly benefited from low oil. Transportation-Airlines and Auto/Truck-Tires are just two examples.</p>
<p>Other industry groups that have moved up the charts include Internet-Network Solutions, Media-Periodicals, Leisure-Gaming/Equip, Steel-Specialty Alloys, Finance-Brokers, Internet-ISP, Computer-Manufac, and Computer Software-Desktop. These are just some of many sectors making HUGE jumps up the industry list.</p>
<p>This is the kind of broad strength you see in strong bull markets. It appears we are in a sweet spot here and can expect more gains in the coming days.</p>
<p>Big-Cap stocks do move at the end of a bull market. However, the most powerful moves in a bull market are the last stages. I am not sure if this is one last six month push or what. All I need to know is that we are moving up and I have tons of charts breaking out. That is all I need to know to be long this market. Nothing else matters.</p>
<p>Earnings are next week and many players, like I said before, expect that to be the time when the market cracks. I would not bet on that. I am sure it is going to be volatile but you can thank SarbOx for that.</p>
<p>It is going to be a quiet today tomorrow as there is not much news set to move the market. However, if the first seven days of 2007 are indication of tomorrow action, I am sure it will be eventful even if there is no news.</p>
<p>We shall see what tomorrow brings. Aloha and I will see you in the chatroom.</p>
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		<title>Stocks Rally As Techs Lead The Way; Traders Who Sold Or Went Short Yesterday Feel The Pain.</title>
		<link>http://bigwavetrading.com/120/stocks-rally-as-techs-lead-the-way-traders-who-sold-or-went-short-yesterday-feel-the-pain/</link>
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		<pubDate>Fri, 05 Jan 2007 04:52:39 +0000</pubDate>
		<dc:creator>Josh Hayes</dc:creator>
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		<guid isPermaLink="false">http://www.bigwavetrading.com/2007/01/04/stocks-rally-as-techs-lead-the-way-traders-who-sold-or-went-short-yesterday-feel-the-pain/</guid>
		<description><![CDATA[What started out as a crazy morning, once again, for stocks, quickly turned into a day of steady advances. The treat of the day and the possible cause to this was another fall in crude oil prices. The fall today, after yesterday, brings the two day total to 8.9%. Besides that, however, there was no [...]]]></description>
			<content:encoded><![CDATA[<p>What started out as a crazy morning, once again, for stocks, quickly turned into a day of steady advances. The treat of the day and the possible cause to this was another fall in crude oil prices. The fall today, after yesterday, brings the two day total to 8.9%. Besides that, however, there was no other catalyst.</p>
<p>At the close, the Nasdaq led by a healthy margin rallying 1.25%, the SP 600 gained .15%, the SP 500 gained .12%, and lagging was the DJIA with a .05% gain. Leading stocks were up .4%, doing better than all but the Nassy.</p>
<p><span id="more-120"></span></p>
<p>Volume was lower than yesterday&#8217;s ridiculous levels. However, volume was still WELL ABOVE the 50 day volume average and it is obvious the move today with yesterday&#8217;s late day support signals more accumulation by the big boys.</p>
<p>Breadth was even on the NYSE with advancers and decliners and on the Nasdaq leaders beat losers by a 17-to-13 margin. That is pretty tame considering the point gains in the Nasdaq.</p>
<p>The Philadelphia semiconductor index jumped 2% and recaptured its 50-day line. RIMM AAPL GOOG were part of the big tech winners. When these stocks perform with the rest of tech stocks, you know you have a very solid broad rally in tech. When these stocks move like they did today and there is not a lot of breadth, it indicates you have a rally in select large cap issues and that is what appears to be case here in this tech rally. The big caps are moving while the smaller stocks stay pretty tame.</p>
<p>Even with really only the big cap stocks and big cap tech stocks getting the majority of the bidding, the fact is the market is still rallying in the face of all that the bears can throw at it. It was the second straight day of stocks fighting back from a rash of selling.</p>
<p>Every body seems to have mixed opinions on rather falling oil is good or bad for stocks. With the rally off of 2003, we saw oil leading all the way to the May top in 2005. Then oil fell and the markets fell. Well, with oil not leading this time, the markets are still moving higher.</p>
<p>This suggest that instead of the whole market getting weak on the back of oil, the market has instead found a place to rotate into. Periodicals, Airlines, Big Caps, and Big Tech have all been leading and has been the new home of the hot money coming from oil.</p>
<p>Until we start to see hot money move out of these sectors and no new hot sectors rotate back up, I don&#8217;t think there is anything to substantially worry about. Especially with the way the market acts on ANY amount of selling.</p>
<p>Granted there are some distribution days on the Nasdaq but did you see the index today? It doesn&#8217;t matter yet.</p>
<p>I have also read somewhere that volatility has picked up. Yeah, maybe on the short term if you watch the indexes with a second by second time frame. But if you look at the VIX, it is clearly obvious volatility is still non-existant.</p>
<p>Are we more volatile than we were before? Heck yeah. But it is hard not to when the indexes don&#8217;t even move 1% intraday during a holiday short time-frame.</p>
<p>The fact that I have so few 10 baggers shows me that this market is in fact much less volatile than it was even three years ago. Basically since 2004 we stay between the 10 and 20 area. From 1997-2003, the norm was 20-50. Now that is volatility.</p>
<p>The only thing more volatile&#8230;one day blowups. For that, you can thank Sarbanes-Oxley. The leaking of info before earnings was almost always apparent with only an occasional one escaping here and there. Now it happens all the time during earnings season.</p>
<p>Bottom line: It still isn&#8217;t volatile out there.</p>
<p>We will see what tomorrow has in store for us. It has been a wild short week. Very wild. Stay calm and stay very disciplined and I will see you tomorrow.</p>
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		<title>Stocks Stage WILD Reversal, Keeping Traders As Confused As Ever.</title>
		<link>http://bigwavetrading.com/119/stocks-stage-wild-reversal-keeping-traders-as-confused-as-ever/</link>
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		<pubDate>Thu, 04 Jan 2007 03:53:07 +0000</pubDate>
		<dc:creator>Josh Hayes</dc:creator>
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		<guid isPermaLink="false">http://www.bigwavetrading.com/2007/01/03/stocks-stage-wild-reversal-keeping-traders-as-confused-as-ever/</guid>
		<description><![CDATA[What a way to start off the New Year! Today, stocks showed us all why it is silly to have convictions. After gapping up very strong this morning on the back of some strong manufacturing data, stocks continued to rally. However, after the FOMC minutes were released, stocks did the exact opposite and reversed into [...]]]></description>
			<content:encoded><![CDATA[<p>What a way to start off the New Year! Today, stocks showed us all why it is silly to have convictions. After gapping up very strong this morning on the back of some strong manufacturing data, stocks continued to rally. However, after the FOMC minutes were released, stocks did the exact opposite and reversed into negative territory. Thankfully, for the bulls, stocks found solid support at 3pm and rallied into the close, giving the DJIA and Nasdaq a positive close.</p>
<p><span id="more-119"></span></p>
<p>At the close, the SP 600 lost .2%, the SP 500 lost .1%, the DJIA finished up .1%, and the Nasdaq managed a .3% gain. Quite an incredible turn of events, considering the nasty reversal intraday.</p>
<p>Volume was MUCH higher, across the board. Today was neither accumulation or distribution but instead was churning. The big advance followed by the big decline and small changes in the index is a tell tail sign of extreme churning.</p>
<p>Breadth was positive on the Nasdaq barely and breadth was even on the NYSE.</p>
<p>The obvious news of the day was the FOMC minutes. I take the comments, &#8220;The downside risks to economic growth in the near term had increased a little and become a bit more broadly based than previously thought,&#8221; is the reason for the pain.</p>
<p>This has the sounding of a Fed starting to realize it might be too tight and that the slowdown is much faster than previously noted. If they start cutting rates that normally means bad things for stock prices. Hence, all the stocks that had to be sold today that I was long.</p>
<p>However, there were other stocks there to take the reign. So we will see how these perform. If these new buys start sucking it up right away then I know something really nasty might be right around the corner.</p>
<p>However, if this is it to the selling, then I have gotten rid of my laggards and have moved the money into equities that are rising. That is what you want to do. Move bad money into good money.</p>
<p>The other bit of news that caught my eye today was oil falling 4.5%. That is fantastic news, unless you are long oil stocks. I wouldn&#8217;t mind seeing $50 oil after our great state of Hawaii decided we needed to pay an extra .11 cents at the pump to pay for their nice SUV&#8217;s in the legislature.</p>
<p>Today&#8217;s market was one of the wildest days I have seen in months. I have not seen such a wild ride in a long time. Most traders think this is very negative and shows a top is in. If that is the case, why didn&#8217;t we selloff into the final hours. Why did buyers come in and support stocks at the EOD? They can&#8217;t be that bad if they did that.</p>
<p>The Nasdaq has three distro days and the SP has one. Another distro day on the Nasdaq, added with this day of churning, will have me very concerned. As of now the trend is still up and that is where I want to be; with the trend, going long.</p>
<p>I really hope 2007 does not act like this all year. If that is the case, I will be dead by the age of 28 (Feb 18th). I can not take this much BS work scanning charts and will have a heart attack the next time I have to do this much work.</p>
<p>We will see what tomorrow brings us but I have discussed my feelings enough for one night.</p>
<p>Aloha and I will see you at the IP forums.</p>
<p>New Swing Longs: Level 2</p>
<p>New Swing Shorts: Level 2</p>
<p>Stocks Up On The Day: Level 3</p>
<p>Stocks On Radar: Level 3</p>
<p>Complete Sells: Level 3</p>
<p>Partial Sells: Level 3</p>
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		<title>The SP-500 Makes Another Six-Year High; Bears Still Don&#8217;t Get It.</title>
		<link>http://bigwavetrading.com/110/the-sp-500-makes-another-six-year-high-bears-still-dont-get-it/</link>
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		<pubDate>Thu, 14 Dec 2006 23:47:00 +0000</pubDate>
		<dc:creator>Josh Hayes</dc:creator>
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		<guid isPermaLink="false">http://www.bigwavetrading.com/2006/12/14/the-sp-500-makes-another-six-year-high-bears-still-dont-get-it/</guid>
		<description><![CDATA[Stocks gained ground off of crude oil rising 2%, drifting with an upward bias on the DJ and downward bias to a green close. The gains in the face of bad news was a clear sign of just how strong this market STILL is. At the close, the Nasdaq and the SP 500 led the [...]]]></description>
			<content:encoded><![CDATA[<p>Stocks gained ground off of crude oil rising 2%, drifting with an upward bias on the DJ and downward bias to a green close. The gains in the face of bad news was a clear sign of just how strong this market STILL is.</p>
<p><span id="more-110"></span></p>
<p>At the close, the Nasdaq and the SP 500 led the way with a .9% gain, the DJIA followed with a .8% gain, and the SP 600 lagged again with a .6% gain. The IBD 100 managed to stay with the top indexes, pulling off a .9% gain. The big bopper came in the form of the Semiconductor Index. This laggard delivered a 1.9% gain.</p>
<p>Volume was higher on both the NYSE and the Nasdaq. It wasn&#8217;t a clear very strong sign of accumulation but coming off the recent consolidation it was an accumulation day none-the-less.</p>
<p>Breadth was higher on both exchanges, with winners over losers by a 3-to-2 margin on the Nasdaq and by and by a 5-to-3 margin on the NYSE.</p>
<p>Today was a bit of a mixed day for me, despite the markets gains. I had many stocks give me partial sell signals again and still did not have too many new longs come up on my scans. A lot of stocks, on the other hand, did very well today and some of my best stocks did surprisingly very well.</p>
<p>This basically shows a market that is rotating around with money moving from sector to sector. I guess that is why almost everday this week in the IBD Industry Group tables the top 10 winners and losers were all over the tables.</p>
<p>The indexes are all still doing very well and that supports further upside for the markets despite everyone thinking we need a rest. After such a strong move this morning a lot of traders expected selling to hit the market. It didn&#8217;t happen and if it did, buyers didn&#8217;t let prices slip a bit.</p>
<p>There is nothing new about this market that I have not spoken about in the past seven post. The trend is still up and nothing is changing it yet.</p>
<p>Even if this is just a Santa Claus rally, I don&#8217;t care. A rally is a rally, and if stocks are moving up, I want to be long. If it is the &#8220;right&#8221; rally or the &#8220;wrong&#8221; rally, I don&#8217;t care. I just want to make money. And the market is still offering longs so I will keep taking them and will continue this until the market rolls over.</p>
<p>The only real troubling thing is that I had a lot of charts to go over tonight and could find only four or five new longs. Normally, with over 600 charts in my scan I should have 8-10 new longs. So the rally could be ready to fizzle. I don&#8217;t know. Nobody does. If they say they do, they are full of shit.</p>
<p>Until this trend changes, I am not changing my bullish positioning. Aloha and I will see you at <a href="http://www.investorsparadise.com/b-JoshuaControl/">Investors Paradise</a>.</p>
<p>New Swing Longs: DWSN AEZ HLTH WOLF JCG</p>
<p>Adding To Existing Long: AMSF</p>
<p>**stocks up 25% or more since I went long have number**</p>
<p>Longs Up On The Day: LNET-30 JST-112 STEC-69 MEH-71 HMSY-35 SVNT-87 CHINA-71 IMKTA-25 IIVI-27 PSPT-32 HRT-56 BMA-32 IAAC-47 PCCC-35 SEIC-25 IGLD-57 AOI-37 TTEC-60 FFH-25 DIVX-39 LWAY-41 HRZ-77 DA-55 CXW-33 MIKR-25 OMTR-72 AUXL-42 PLB-32 BUF-25 AKAM-250 PERY-33 ABI-33 PTT-85 GENT-35 ININ FTK AMSF UCTT LRCX CAM FMCN COH CNH INAP CELG RKT PRFT OTEX NYX RBN NITE MAIL BTJ LINTA RCRC NSTC TSRA NU OMNI NHWK SQM DECK ROG CCO EVEP HOS ISE BMC OPTM NLST SNCR MBLX CBF OSIR BMTI QI ICFI KALU KOG HA THK AGR TMO BBI SFL PFWD SPRT ADBE RRC ACGL PNW IGT NHP ISBC TZIX CCBL ETR ZILG APLX WGA NRGP</p>
<p>Stocks On Radar: XTO MKL TRCR BRG AB LVS VEH SVVS ONT MVIS ITWO MSO SPLS AHO TLEO EMC GMRK SVM DFC</p>
<p>Take Some Profits/Cut Some Losses: MSTR RAH OPLK AZS SUAI FTEK CKSW INPC ACP SRSL</p>
<p>Sell All: ADL NUE TRT</p>
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