It has been a pretty boring tape for the overall market, post-Thanksgiving. However, we did get one day of action this past week as the market sold off pretty hard on Wednesday on above average volume. The above average volume was logged on the indexes, ETFs, inverse ETFs, leveraged ETFs, and inverse leveraged ETFs. With above average volume confirmation across the board, along with the Russell 2000 closing below the 50 day moving average, our model switched to a NEUTRAL condition on the Russell 2000.
The Nasdaq, DJIA, and SP-500 continue to trend above the 50 day moving averages so all of these indexes are still under a BUY signal but are all on notice. If another big break on heavier volume occurs, these indexes will switch to NEUTRAL as we are still very extended from their 200 day moving averages.
This being stated, our NEUTRAL condition on the Russell 2000 is a very minor one, with only very small hedges in place against a very heavily long portfolio. An up 1.5% day on above average volume here or a close above 1131.38 with or without volume will put the Russell 2000 back into a BUY mode.
Right now, we are still very heavily long with little cash on hand (around 5%). Our largest long positions continue to trend higher and many new long positions have been semi-successful despite the heavy tape post-Thanksgiving. This, along with the fact that we have triggered very few full sells during this period, suggest that the tape is still healthy and that the long side is the correct side to be operating on to produce large returns–as you can see below.
OK. For us that live on the Hawaiian islands today is a huge day with the Pipe Masters about to start (Kelly Slater going for his 12th world title) and surf along our north shores firing. Honolua Bay is calling me so I am out of here. Honolua Bay and Maui no ka oi! Surf’s up!! Have a great weekend.
TOP CURRENT HOLDINGS – PERCENT RETURN SINCE SIGNAL DATE – DATE OF SIGNAL:
CAMP long – 333% – 4/26/12
WAGE long – 228% – 1/8/13
FLT long – 165% – 9/6/12
POWR long – 148% – 12/11/12
HEES long – 134% – 9/4/12
VIPS long – 125% – 7/17/13
ADUS long – 122% – 4/22/13
DDD long – 111% – 4/30/13
WDC long – 80% – 1/9/13
ADS long – 73% – 12/11/12
WST long – 70% – 1/22/13
FLDM long – 59% – 8/28/13
ARC long – 59% – 10/16/13
BEAV long – 58% – 3/5/13
SHLO long – 47% – 10/30/13
USCR long – 65% – 4/12/13
V long – 61% – 8/31/12
LOCK long – 58% – 5/20/13
ONVO long – 53% – 10/17/13
GLL long – 48% – 2/14/13
NUS long – 46% – 9/5/13
AER long – 44% – 6/27/13
FB long – 31% – 8/23/13
