The Big Wave Trading models remain under a system wide operational NEUTRAL condition following the strong move on Friday. While our models have done some minor switching the past 2 1/2 months our overall bias continues to be extremely neutral. The neutral bias is due to the lack of follow-through to any significant move up or down in the overall market the past 2 1/2 months.
The overall uptrend remains intact, however, and this is why we continue to take new long signals as high-quality signals are generated. Despite our models switching to an operational SELL condition this week, we kept our hedges very small with very tight stops. During Friday’s session, half of those hedges were stopped out. Those small losses have been more than offset by the 8 new long signals (a very high number considering we were under an operational SELL signal) we received this week. Following Friday’s session, all 8 are in the black.
We remain very heavily invested in our long positions with our accounts exposure around 80% long, 15% cash, and 5% short. While the market could easily continue to sell off, we find it short-term positive that this market is throwing up all of these long signals and that they are all working. As long as the major market averages are trending above their 200 day moving average, we will continue to take new long signals no matter if we are under a BUY, NEUTRAL, or SELL condition.
We will only abandon new long positions once we see them start failing left and right and/or the market follows through on any selling. For now, we continue to see zero follow-through to any major selling. Any significant selling pressure continues to find support at key support levels. Only once those support levels fail and our long positions start failing immediately will we back off.
On top of that, we continue to find a ton of momentum intraday in speculative low-priced stocks like VLTC, ICLD, PTBI, and SYMX. As long as momentum favors the bulls this is the side of the market we will continue to focus on. Especially with interest rates not rising any time soon. When new long positions start failing immediately, when no new long positions show up, when major support is cracked on huge volume, and/or when interest rates start rising, then we will start looking at the short side. Until then, stay neutral on the overall market and take those long signals.
Happy Mother’s Day and we wish you the best during this upcoming trading week. Aloha from the beautiful west side of Maui where summer is officially here.
TOP CURRENT HOLDINGS – PERCENT GAIN SINCE SIGNAL DATE – DATE OF SIGNAL
VIPS long – +679% – 7/17/13
AGIO long – +116% – 9/24/14
PAYC long – +102% – 10/30/14
CBPO long – +82% – 10/24/14
ANAC long – +78% – 1/20/15
VDSI long – +76% – 8/4/14
SWKS long – +75% – 10/28/14
BLUE long – +70% – 2/25/15
SKX long – +65% – 1/26/15
VRX long – +62% – 11/17/14
GIMO long – +59% – 2/2/15
ESPR long – +53% – 3/9/15
RUBI long – +50% – 10/29/14
EA long – +49% – 11/10/14
CVTI long – +49% – 11/3/14
AVGO long – +46% – 10/28/14
SERV long – +41% – 11/7/14
PANW long – +38% – 11/10/14
TERP long – +32% – 1/16/15
