Also helping to lift stocks was a couple of merger and acquisition related announcements. Kirk Kerkorian has made a $4.5 billion bid for DCX and WEBM agreed to be acquired by Software AG. WEBM rose 27% on the announcement. This now puts the 1Q M&A deals up 27% over this time last year. $1.1 trillion worth of M&A deals this year has us on pace to beat last years record. More amazing is private equity deals. Those have risen 47%, year-over-year in 2007 so far.

Combine the positive jobless claims with the M&A deals, and with most traders taking Thursday off to have a very long weekend, and you had a recipe perfect for higher stock prices, despite oil climbing back over $64 on the news that the EIA saying that oil inventories declined for the eight-week in a row.

At the closing bell, the Nasdaq led the way with a .5% gain, the NYSE and the SP 500 followed with .3% gains, and the SP 600 and the DJIA lagged with .2% gains. A tad more troublesome is the IBD 100. That index only managed a .2% gain, well lagging the Nasdaq on the session.

Volume was lower on both the NYSE and the Nasdaq by about 10%. The lower volume was well below the 50 day volume average and was the lowest total of the year. Advancers beat decliners by a 5-to-3 margin on the NYSE and by an 8-to-7 margin on the Nasdaq. There were 413 new highs to 53 new lows–and on the NYSE there were 234 new highs to only 13 new lows.

Today was another day of a low volume rally that saw the indexes barely move higher but once again shake off early weakness to do so. This is not a great trend we have developing, since the follow-through day on March 21st. Since that follow through day the market was been higher in seven sessions. All seven sessions have failed to have volume over the 50 day volume average and only two of the up sessions have come with volume heavier than the day before. This is a low volume rally that will not last much longer unless we get some clear accumulation days in here by big institutional traders. Until we have volume come in over the 50 day volume average on the upside, we are open to a severe sell-off still. Bottom line is that I would not take much away from this week’s holiday shortened trading.

For the week it was very positive with all indexes closing higher. The Nasdaq led the way with a 2.1% gain, the NYSE followed with a 1.8% gain, the DJIA was right behind with a 1.7% gain, the SP 500 rose 1.6%, and the SP 600 gained 1.5%. I could go into more detail about this weeks action but it would be silly to do so. All you need to know is that it was a holiday short week. The bulls almost always have control of these weeks. This week was no exception.

There is no doubt that we are still in rally mode but everything in my gut tells me we are not going far from here. Now I will change my stance in seconds, if I start to see Featured stocks with consistent great EPS and sales growth breakout from fresh bases and the markets start moving higher on HUGE volume. However, all I keep seeing is the old leaders breakout from choppy bases, defensive and utility issues climbing, and little small sub-$10 momo stocks moving. This does not make a safe big bull market. If we start seeing some more buying here on a lot of volume I will be much happier. However, unless we see it soon, we are increasing our chances of failure each day that passes that volume on the up days remain under the 50 day volume average.

Can we make money here? Of course! If you are a subscriber at least on the silver level you can see for yourself that almost EVERYTHING that I have touched since the February 27th sell-off is either higher or has not violated a complete cut loss area. However, there is nothing over $10 breaking out from bases seven weeks long that have perfect accumulation/distribution and max green BOP. In March 2003, October 2004, and November 2005 there were plenty of beautiful charts. Even after the move in August 2006 there were a few SWEET gems. However, since March 21st there has been very few. The stocks that do have perfect charts are just not Featured quality. If this market takes a turn for the worse, these stocks will not fall 8%–they will fall 20% or more before violating a key cut loss level. So I can not recommend them for newbies.

Give me a sell-off of 20% or more and a VIX near 20-30 and the next follow-through we get you will see the power of this strategy. Right now, very few people are making a killing. Remember back in March 2003 when the VIX was at 33? I had many stocks make 300-500% gains. So what can we compare it to now. How about KNOL. KNOL is up 301% for me since I purchased it. If the VIX was three times higher than now and around 36, KNOL would be up 900%. So basically you can take a look at my returns below this commentary and then double or triple them and then you will see the potential gains in a “REAL” bull market. Not a low volume snooze-fest higher.

Speaking of the VIX: The VIX fell 10.2% this week. LOL. With the VIX that low, you can forget about many MFW or TRCR type of stocks showing up. Normally I can find 10-20 MFW and TRCR type of stocks. Not in this market. However, the drop in VIX puts complacency in the market and that is bearish for stock prices. Another bearish item is the put/call ratio. That ratio after falling below .7 yesterday is still low at .74. Also, early on in the realmoney.com polls, bulls are beating bears 60% to 19%. The crowd appears to bullish again….for now. And we all know how quick this can change. More choppiness? Probably.

So remember, until we get more quality Featured type stocks, keep your buys small in this speculative crap that is getting action. Also if you are brand new and are still inexperienced (you know who you are) and you buy a stock and it goes against you the next day, think about selling 25% to 33%. Also in these speculative stocks, don’t be afraid to take some gains at 25% or so. These things like to reverse in the kind of market environment we are in so you need to stay on your toes. Breakouts should work right away! Especially in rough markets. If they don’t move up right away, newbies, think of selling some down.

Before I move on to wishing everyone a Happy Easter, I want to talk about the March employment numbers. Expectations for 135,000 was well taken care of when headlines produced a gain of 180,000. Along with that nice gain, the previous two months employment figures were revised up. But more amazing, despite this “horrible-evil-economy-that-GWB-has-created,” unemployment came in at five-year lows at 4.4%, beating expectations of a tick up to 4.6% from 4.5% . That is simply incredible. This also comes with average hourly earnings rising .3%. That is a 4% gain year-over-year. Even though the economy is showing signs of slowing, these numbers show just how great this economy still is despite the slowdown.

Wall-street took the news quite well with the SP futures rising 5.75 and the NQ futures rising 10.75. Stocks were closed today, obviously, but futures still traded for a little while.

Earnings season officially starts next week when AA reports on Tuesday. Analyst are expecting gains of 3.7% in YOY earnings this quarter. That is down from 8.7% estimates, earlier this year (not a good sign). Don’t you find that a bit scary how far they have come down?? Also, the expected 3.7% YOY gain will be the first gain in 14 quarters of non-double digit growth. As earnings go, so goes the market. Historically you can watch the trend of the GDP growth and earnings growth of an economy and see that they are the best predictor of what direction the stock market will take. GDP and earnings lead the market.

With that I wish everyone a Happy Easter and Passover. Enjoy the time with loved ones. Aloha and I will see you in the chat room.

Market Commentary At Big Wave Trading Bronze Level One.

Top Holdings Up This Week – Signal Date

KNOL 301% – 1/12/06
AKAM 220% – 9/30/05
TRCR 188% – 1/12
TTEC 172% – 8/25
JSDA 139% – 12/20
TNH 132% – 10/26
OMTR 125% – 9/15
CCOI 107% – 9/27
MEH 105% – 8/30
HRZ 104% – 9/27
CLRT 98% – 11/30
PRGX 97% – 1/12
AOI 94% – 11/19
EVEP 93% – 11/16
MFW 91% – 1/29
BONT 87% – 10/3
NEXC 81% – 10/25
CPA 79% – 9/15
CHINA 78% – 8/16
IMKTA 74% – 8/28
SLP 73% – 2/5
BAM 73% – 11/17/05
DA 67% – 1/25/06
MOS 65% – 10/12
EPHC 64% – 12/20
ULTR 64% – 10/27
HURN 63% – 9/13
IIVI 63% – 8/30
PERY 61% – 10/4
ANO 58% – 2/14
CXW 58% – 5/19
XIDE 56% – 1/29
KHDH 55% – 5/30
APLX 53% – 9/28
BMTI 52% – 10/25
IMMU 52% – 12/19
ONT 52% – 12/21
BMA 52% – 10/24
DECK 51% – 9/13
OEH 48% – 11/20
VDSI 48% – 1/4

New Swing Longs: Silver Level Two

New Swing Shorts: Silver Level Two

Stocks On My Watchlist: Gold Level Three

Complete Profits/Losses: Gold Level Three

Partial Profits/Losses: Gold Level Three

MauiTrader Forums: Gold Level Three

MauiTrader Chat Room: Gold Level Three

Longs Up On The Day: Gold Level Three

Shorts Up On The Day: Gold Level Three

Also helping to lift stocks was a couple of merger and acquisition related announcements. Kirk Kerkorian has made a $4.5 billion bid for DCX and WEBM agreed to be acquired by Software AG. WEBM rose 27% on the announcement. This now puts the 1Q M&A deals up 27% over this time last year. $1.1 trillion worth of M&A deals this year has us on pace to beat last years record. More amazing is private equity deals. Those have risen 47%, year-over-year in 2007 so far.

Combine the positive jobless claims with the M&A deals, and with most traders taking Thursday off to have a very long weekend, and you had a recipe perfect for higher stock prices, despite oil climbing back over $64 on the news that the EIA saying that oil inventories declined for the eight-week in a row.

At the closing bell, the Nasdaq led the way with a .5% gain, the NYSE and the SP 500 followed with .3% gains, and the SP 600 and the DJIA lagged with .2% gains. A tad more troublesome is the IBD 100. That index only managed a .2% gain, well lagging the Nasdaq on the session.

Volume was lower on both the NYSE and the Nasdaq by about 10%. The lower volume was well below the 50 day volume average and was the lowest total of the year. Advancers beat decliners by a 5-to-3 margin on the NYSE and by an 8-to-7 margin on the Nasdaq. There were 413 new highs to 53 new lows–and on the NYSE there were 234 new highs to only 13 new lows.

Today was another day of a low volume rally that saw the indexes barely move higher but once again shake off early weakness to do so. This is not a great trend we have developing, since the follow-through day on March 21st. Since that follow through day the market was been higher in seven sessions. All seven sessions have failed to have volume over the 50 day volume average and only two of the up sessions have come with volume heavier than the day before. This is a low volume rally that will not last much longer unless we get some clear accumulation days in here by big institutional traders. Until we have volume come in over the 50 day volume average on the upside, we are open to a severe sell-off still. Bottom line is that I would not take much away from this week’s holiday shortened trading.

For the week it was very positive with all indexes closing higher. The Nasdaq led the way with a 2.1% gain, the NYSE followed with a 1.8% gain, the DJIA was right behind with a 1.7% gain, the SP 500 rose 1.6%, and the SP 600 gained 1.5%. I could go into more detail about this weeks action but it would be silly to do so. All you need to know is that it was a holiday short week. The bulls almost always have control of these weeks. This week was no exception.

There is no doubt that we are still in rally mode but everything in my gut tells me we are not going far from here. Now I will change my stance in seconds, if I start to see Featured stocks with consistent great EPS and sales growth breakout from fresh bases and the markets start moving higher on HUGE volume. However, all I keep seeing is the old leaders breakout from choppy bases, defensive and utility issues climbing, and little small sub-$10 momo stocks moving. This does not make a safe big bull market. If we start seeing some more buying here on a lot of volume I will be much happier. However, unless we see it soon, we are increasing our chances of failure each day that passes that volume on the up days remain under the 50 day volume average.

Can we make money here? Of course! If you are a subscriber at least on the silver level you can see for yourself that almost EVERYTHING that I have touched since the February 27th sell-off is either higher or has not violated a complete cut loss area. However, there is nothing over $10 breaking out from bases seven weeks long that have perfect accumulation/distribution and max green BOP. In March 2003, October 2004, and November 2005 there were plenty of beautiful charts. Even after the move in August 2006 there were a few SWEET gems. However, since March 21st there has been very few. The stocks that do have perfect charts are just not Featured quality. If this market takes a turn for the worse, these stocks will not fall 8%–they will fall 20% or more before violating a key cut loss level. So I can not recommend them for newbies.

Give me a sell-off of 20% or more and a VIX near 20-30 and the next follow-through we get you will see the power of this strategy. Right now, very few people are making a killing. Remember back in March 2003 when the VIX was at 33? I had many stocks make 300-500% gains. So what can we compare it to now. How about KNOL. KNOL is up 301% for me since I purchased it. If the VIX was three times higher than now and around 36, KNOL would be up 900%. So basically you can take a look at my returns below this commentary and then double or triple them and then you will see the potential gains in a “REAL” bull market. Not a low volume snooze-fest higher.

Speaking of the VIX: The VIX fell 10.2% this week. LOL. With the VIX that low, you can forget about many MFW or TRCR type of stocks showing up. Normally I can find 10-20 MFW and TRCR type of stocks. Not in this market. However, the drop in VIX puts complacency in the market and that is bearish for stock prices. Another bearish item is the put/call ratio. That ratio after falling below .7 yesterday is still low at .74. Also, early on in the realmoney.com polls, bulls are beating bears 60% to 19%. The crowd appears to bullish again….for now. And we all know how quick this can change. More choppiness? Probably.

So remember, until we get more quality Featured type stocks, keep your buys small in this speculative crap that is getting action. Also if you are brand new and are still inexperienced (you know who you are) and you buy a stock and it goes against you the next day, think about selling 25% to 33%. Also in these speculative stocks, don’t be afraid to take some gains at 25% or so. These things like to reverse in the kind of market environment we are in so you need to stay on your toes. Breakouts should work right away! Especially in rough markets. If they don’t move up right away, newbies, think of selling some down.

Before I move on to wishing everyone a Happy Easter, I want to talk about the March employment numbers. Expectations for 135,000 was well taken care of when headlines produced a gain of 180,000. Along with that nice gain, the previous two months employment figures were revised up. But more amazing, despite this “horrible-evil-economy-that-GWB-has-created,” unemployment came in at five-year lows at 4.4%, beating expectations of a tick up to 4.6% from 4.5% . That is simply incredible. This also comes with average hourly earnings rising .3%. That is a 4% gain year-over-year. Even though the economy is showing signs of slowing, these numbers show just how great this economy still is despite the slowdown.

Wall-street took the news quite well with the SP futures rising 5.75 and the NQ futures rising 10.75. Stocks were closed today, obviously, but futures still traded for a little while.

Earnings season officially starts next week when AA reports on Tuesday. Analyst are expecting gains of 3.7% in YOY earnings this quarter. That is down from 8.7% estimates, earlier this year (not a good sign). Don’t you find that a bit scary how far they have come down?? Also, the expected 3.7% YOY gain will be the first gain in 14 quarters of non-double digit growth. As earnings go, so goes the market. Historically you can watch the trend of the GDP growth and earnings growth of an economy and see that they are the best predictor of what direction the stock market will take. GDP and earnings lead the market.

With that I wish everyone a Happy Easter and Passover. Enjoy the time with loved ones. Aloha and I will see you in the chat room.

After all the crazy intraday action was over, the NYSE led the way higher, thanks to being loaded with metal, steel, and oil stocks, with a .7% gain. The SP 500 and SP 600 rallied .4%, and the Nasdaq rallied .03%. The good news came in the form of leading stocks as both the IBD 100 and the IBD 85-85 closed higher by .7%. The only troubling part was that many stocks suffered some big hits. But besides the stocks that got whooped, there were plenty of stocks producing enough gains to make up for it.

Volume came in slightly lower on the Nasdaq and the NYSE. While the light volume rally reversal might not be that bullish, it was still a lot better than stocks not rebounding at all and giving up another distribution day. So it is hard to really complain about the action today. The fact that stocks closed higher, even on the light volume, is impressive on a short-term basis.

Advancers beat decliners on both exchanges, with leaders beating losers by a 5-to-3 margin on the NYSE and by a very narrow margin on the Nasdaq. There were 223 new highs to 83 new lows, showing that the majority of stocks are still hitting new highs not new lows. Yes, the breadth of these moves compared to where we were last time is negative but it seems nothing matters to this messed-up market.

The Nasdaq and SP 500 do seem to be finding it tough to fight through their 50 day moving averages. These indexes also have weak RS lines. This signals that maybe with the overbought condition we could expect stocks to go lower. But, once again, there is a slight problem. The put/call ratio is still over 1 at 1.14, signaling that more than likely there is still too much fear in this market and the resistance at the 50 day moving average should turn into a bullish development as prices cross over this line. Another factor supporting that is the IBD 100 and IBD 85-85 having strong RS lines during this most recent month’s action. That, along with 7 of the top 10 industry groups today coming today from the top 17 IBD sectors, shows that the market should be able to continue with its upside bias.

However, I am not sure how this is going to work. And even if it is going to work, how it is going to make us big safe money (there is such a thing, non-Featured-grasping friends). You simply do not see this kind of overall action in positive bullish markets that have nothing wrong with them. The fact that even after the recent gains we have very few stocks breaking out of long nice bases and instead have to buy the leaders as they pullback to 50 day moving averages, that most have ridden since 2003, is just pathetic. Oil, Steel, and Metal stocks are starting to get green again but this time they are doing so after very troublesome downtrends. These type of rallies this late tend to fail more than succeed. Also you don’t see top stocks breakout of bases and then fail like you saw in RECN, MOV, and SIMO. This simply does not happen after a real correction that leads to a new follow-through to a new bull phase. This rally still has that feeling that we are going to see a failure eventually. When? How the hell do I know! My track record is pretty shitty when it comes to calling that China top.

Everyone that I know that trades like me sees pretty much the same thing, so I am for sure that my analysis on this market is DEAD ON. Everyone is also tired and worn out and I can definitely echo that feeling. The other feeling we all share is the fact that CASH IS KING still!! It is much wiser to keep cash heavy here for a higher odds play. The best and greatest traders of all time ALL knew the big money was made in the sitting; not in the acting. Sitting and holding onto your stock as it keeps going higher, instead of selling for quick profits; and sitting on the sidelines waiting for everything to line up so you can go all-in and start making a killing on your new purchases, instead of just trying to trade every day in every single market environment was one of the most important part to all the success of these traders. The most important part is always and will always be to CUT YOUR LOSSES SHORT WHEN YOU ARE WRONG, RIGHT AFTER YOU GO LONG.

I am going in for an MRI tomorrow to check on some nerve damage that I seem to be suffering in my L1 to L5 region. Therefore, I am not sure how much I will be around tomorrow. In case I am not around that much, remember, CASH IS STILL KING! Aloha and I will see you in the chat room.

However, the market decided to ignore all of that news and instead seemed to focus more on relieving the oversold bounce and rewarding investors for the continued string of mergers & acquisitions. CSCO anounced, today, that they would buy WEBX. Which should help CSCO’s numbers a lot as CSCO is the old big dog while WEBX is the growing sensation. The big news, though, via the M & A scene was the announcement of ICE outbidding CME for BOT. This bidding war helped BOT shares jump 17%. Too bad I sold out all of my BOT with a .6% gain. There was no reason to sell all of my BOT and now I have learned another valuable lesson. Two in two days! Eleven years of experience and the market is STILL teaching me new tricks.

Back to the market action, the SP 600 led the way today with a 1% gain, the SP 400 followed with a .7% gain, the NYSE gained .5%, the SP 500 rallied .4%, the Nasdaq gained .3%, and the DJIA lagged to the upside with a .2% gain. Not too often you see every index this close but not the same with all their gains. The IBD 100 rallied .6% today, not leading the market to the upside but still keeping pace with the top two indexes.

Volume was much lower today on both the NYSE and the Nasdaq. Volume came in 27% and 23% lower, respectively. The lower volume sure did show that big institutional funds have no interest in this market at all, after that 2/27 sell-off. Advancers beat decliners today, on both the Nassy and NYSE. winners were over losers by a 2-to-1 margin on the NYSE and by a 3-to-2 margin on the Nasdaq. There were 117 new highs to 69 new lows. The strong breadth and good ratio of new highs to new lows is bullish on the short-term but the lower volume shows that it is just traders that are bullish here. The big funds are not. Even if they are, they sure are not putting their money where their mouth is.

The big winners of the day were the Internet-ISP group, with a 5.7% gain. This can be thanked to WEBX, one of the top stocks in the group, getting gobbled up by CSCO. The next best group was the Finance-Mortgage & Related index. That group rallied 3.1% on the back of LEND bouncing back 56% today. The funny thing about this stock is that in the chat rooms I monitor TONS of traders were going long LEND for what “had to be” the bottom for a potential home run. The next day the stock dropped 65%, destroying many peoples account. The worse part comes next. I then watched many traders short LEND yesterday (I guess because it went back over $5). Whoops! Never bottom fish and never short a stock that is sooooooooo faaarrrrrrrrrr away from the 50 and 200 dma. These traders got what they deserved. You should study history; not gamble.

Even though today was a horribly boring day, it still was day two of the attempted rally that was started yesterday. Remember, we are looking for a 1.7% gain on higher volume on day 4 to 7 with 10 days being OK. It doesn’t matter what we do tomorrow. What matters is what happens on Monday. However, if quadruple withching Friday has the amount of volume that we normally see on those days, it is doubtful we will be getting a 1.7% gain WITH HIGHER VOLUME on Monday. Those quad witching Fridays normally have a TON of turnover that skews the volume figures to the upside by a ton.

The other thing I would like to see, if we do get a follow-through, is the markets retake their 50 dma when they do follow-through. Right now, all of these indexes reside below this key line. The best follow-through days also come with the markets retaking this key line. Go study all of the follow-through days since October 2002, after a down trend, and you will see that when the indexes follow-through and continue upward, they do it on a big price and volume move and retake the key 50 dma.

Right now, I just wouldn’t expect one to work, even if we do get one–which I doubt. The battle between the bulls and the bears is very emotional now. How do I know that? Just look at the realmoney.com bullish/bearish poll. Every week we go from extreme bullishness to extreme bearishness. And now that is infecting the put/call ratio. It has gone from 1.52 to .66 to 1.47 to .89, from the closing bell on Monday to the closing bell on Thursday. That is about as wild as you can get on this ratio in this short of a time frame. Quad witching should be fun, tomorrow.

Besides an exciting day of options activity, we also have the ever important CPI. This will be the talk of wall street, tomorrow. So be prepared for that. Besides that we also have the FOMC meeting to look forward to next Tuesday. This will all surely be market moving events. They always are.

Cash is still the proper play here. A little bit of shorts, a little bit of longs, and a lot of cash. That is the best way to be looking at this market right now; with a lot of cash. I am sure there is more choppiness to come. Aloha and I will see you in the chat room.