Joshua Hayes

Joshua Hayes
Contributor since: 2008
Company: Big Wave Trading
Thank you very much.
The Big Wave Trading Portfolio model remains under a SELL signal generated on 5/4/12. The SELL signal was very strong but four false signals (3 SELL, 1 BUY–first time that has happened in the model since 1979) left us gun shy from going 100% all-in on the most recent strong signal. While this is unfortunate in the IRA/Retirement account (since it can not go short), as we are under-investing in inverse ETFs that are doing very well for us, it has worked itself out in the Aggressive/Margin account. Tons of stocks have produced very strong short signals for us since 5/4/12 and almost everything we are touching is working immediately. A far departure from the past two months. We realize that the market is very oversold here and thus it would be very dangerous pushing new short positions. If the market does not get a bounce on continues to selloff, we will continue to reduce the exposure in each new short signal that we receive. If the market can manage a bounce here and the charts stay broken with no real sign of accumulation in the market or leading stocks, we will look to fully press our bets on the inverse ETFs in the Retirement account and on shorts/ETFs in the Margin account. If the market does bounce, we get some good accumulation in leading stocks, and our current shorts start giving us cover signals, we will be more than happy to get exposure to the long side. However, we believe the fact that Facebook came public in such an environment and the fact that insiders sold over 50% of their personal holdings on the first day tells us everything we need to know as it relates to the 3-year bull”shit” market. I will redirect everyone to this post on April 23rd that I wrote for Seeking Alpha. It was denied publication because of its “technical analysis” content. That sure was unfortunate for their readers as the level of bullish articles that day was extremely intense. Aloha and have a great weekend.
Current Top Holdings – Percent Return – Date of Signal
BVSN short – 69% – 3/16/12
AVD – 65% – 1/10/12
UVXY – 63% – 5/9/12
LQDT – 62% – 2/1/12
SINO short – 37% – 4/12/12
MNST – 36% – 1/13/12
VRNM short – 34% – 4/10/12
PRXI short – 28% – 3/30/12
WZE short – 25% – 4/10/12
Market is in complete danger. I am out all longs. This is about to get ugly. Our market model is back to SELL mode. This is the most dangerous market environment we have seen in our model.
I went long CERN on Friday. CTSH and CRM are back on watch for a breakout buy. INFA is off the table for now.
http://bit.ly/IdBKjE
“When you are starting out, it is very important not to get too far behind because it is very difficult to fight back. Most traders have a tendency to take risks that are too large at the beginning” – Gary Bielfeldt
“Professional traders manage their trading to assume that each trade may be a loser.” -Peter Brandt
The Big Wave Trading Portfolio is currently under a BUY signal after having to suffer through three straight SELL signals that were followed by cutting losses and returning to NEUTRAL. The current BUY signal is mainly being produced by the mere fact that the market will not sell off following all of the recent distribution days and is back above its 50 day moving average. Volume on the upside continues to be well below what we would consider a strong BUY signal and it remains a BUY signal basically due to CANSLIM quality stocks. A lot of CANSLIM quality stocks have built or continue to build quality bases. On the day of the BUY signal on Thursday tons of CANSLIM stocks broke out of very constructive base patterns. Despite these very high quality long signals, Big Wave Trading is not investing up to the capacity that it should be due to the recent false signals in our model which in the past has not produced three false signals in a row in such a short amount of time. This is 100% a function of the current market and not our model as 1976-1978 did not even produce this kind of low volume misinformation. Clearly, price is the only thing that matters when stocks are trending up. Volume is irrelevant in a QE environment. At the same time, even if the chart is in perfect order, our portfolios will not tolerate losses and pair back anywhere from 10% to 25% of our positions in stocks if they show losses. Overall, it appears these breakouts are stronger than the breakouts in January as the current consolidation period has given many of these stocks base-on-base patterns or ascending base patterns. The bases these high quality stocks broke out of in January while sound came from the very volatile July-December period in the market thus making some of them suspect. This recent consolidation has tightened many of these charts up. While saying all of this, we are completely aware that the whipsaw market may throw us back into a NEUTRAL signal at any moment. Also, we realize that we are deep into our third year of a QE led uptrend and it remains in our view that we are near the end of this big bull market rather than a start of a brand new bull market. However, we do not trade off of our opinions. We trade off of real price signals based on 130 years of stock market history and 200 years of futures history. We may think we are near a top but if the market wants to move higher and we have signals we are taking them long.
Top Current Holdings – Percent Gain (non-margin) – Date of Signal
SWHC – 84% – 1/3/12
AVD – 71% – 1/10/12
LQDT – 53% – 2/1/12
BVSN short – 48% – 3/19/12
EPAM – 33% – 3/1/12
CPWM – 30% – 3/13/12
MNST – 30% – 1/13/12
SUNH- 27% – 3/9/12
PRXI short – 22% – 3/30/12
Our market direction model has returned to a BUY signal and have initiated long positions in AZO GEOI SWI. The thesis that we remain near a top based on historical charts remained. We continue to believe we are the end of this 3 year uptrend rather than a start of a new bull market. This uptrend is the possible final wave of the Elliot Wave 5-wave cycle. This move higher should put AAPL PCLN CMG completely parabolic and sucker in the final late comers to the three year rally. We have covered our short PCLN position for a profit and cut our short on CMG for a small loss. We will continue to buy CANSLIM quality stocks as they break out and ride them higher. Another rally to new highs here will only make the short side that much better when this thing finally falls flat on its face. Don't forget this whole rally from the October lows has been on below average weekly volume the entire way on the NYSE and Nasdaq. There has not been one week of higher than average volume (using the 50 day volume average). Not one. What goes straight up must come down. For now we will follow the trend and wait for the ultimate top. Our thesis remains.
Really that is no reason to buy a stock? I would review these traders. With a cut loss methodology it is the only methodology that works in a lifetime of trading for a living. You can't do this for a living off of fundamentals alone. Stock market don't go up forever and we are Japan 90-now currently in the USA Nasdaq 00-2020.
Jesse Livermore
Richard Wyckoff
Nic Darvas
Ed Seykota
Richard Dennis
Richard Donchian
WIlliam Eckhardt
William J. O'Neil
James DePorre
Dan Zanger
Bill Dunn
Bill Campbell
John W. Henry
Michael Covel
Just saying.
In regards to IBD CANSLIM, you guys know that AAII ran over 50 different methodologies from 1998-2010 and the #1 methodology was CANSLIM right? The data couldn't be more clear. Not sure what planet some of you guys live on. :)
http://bit.ly/boBf1l
Thank you Hypnos for actually reading the article. If the market turns higher, I will buy the leading stocks leading the rally higher. So difficult for non-trend followers to understand. Kind of sad but it let's me know that I will be able to do this forever as human pyschology and emotions never change. Aloha, Hypnos. #veryflexible
Perma bear, LOL. I was long from January to March. Get real. Also October to November. I am a trend follower. Perma bear? I hold no opinions. I follow the trend.The trend is turning lower. Just look at the charts. That is reality. I have made my small fortune on the long side also. Not the bear side. It just added to it. Aloha!
Moving to Maui at the age of 18 and becoming a millionaire before 25 definitely shows I know nothing about the stock market. Got it. Thank you very much.
You are extremely welcome, patmich. Thank you for your kind comments. I am definitely not used to them on this web site.
Oh my god, rofs. You might have one of the best comments I have read in a while. Notice, everyone else, that it is simple. You are correct rofs and this is one of the reasons I am currently short PCLN. Massive negative divergences across the board in multiple time, price, and volume indicators. Good job buddy for supplying a comment rooted in reality and not the future! This site and its focus on fundamental analysis is just not healthy for those reading these articles.
I clearly stated where I get all of my data from. It is right in the article. I always say if what I post from my data provider is wrong it is on them not me. I write what it says and it is the software used by elite brokerage firms across the country. WONDA/MarketSmith.
How can anyone predict the future. Nobody can do this. When I wrote the article there were no technical damages to it. After I submitted it they started to appear and I corrected the article. It is what it is. The market is not possible to predict. You can only react. If CRM breaks out on volume I buy. If it does not I avoid it. It is that simple. That is what trend following is about.
It does prey on those that do not know fundamentals? Really? I made my millions off of technicals alone and so have:
Jesse Livermore
Salem Abraham
William J O'Neil
Nic Darvas
Bill Dunn
Bill Campbell
Ed Seykota
William Eckhardt
The Turtles
Richard Wyckoff
Richard Donchian
Gerald Loeb
James DePorre
Dan Zanger
Tim Sykes
Yeah, TA alone sure doesn't work. ;)
The great trend followers definitely disagree with you there, trader14.
That is why we have made our millions while you wait to make yours.
I suggest to read some writings by Michael Covel or William J O'Neil next time before opining with your extremely rude comments.
I am just trying to be helpful. Spread your hate elsewhere. Mahalo and aloha.
Divi looks good and it is a hold here based on technicals. Sorry for the two year late reply! :)
Hi guys. Very sorry for late replies. Ha! Gold and these gold stocks have COMPLETELY broken down and I have no interest in this sector until it can get a floor on some strong volume. The current market is extremely toppy and feels really awful to be long anything here.
As for why did RIC go down? The right answer is "who cares?" We do not need to know why a stock goes up or down. The thing to do is buy stocks moving higher. When they stop and start selling off on strong volume, you sell. If you buy a stock and it does not move higher IMMEDIATELY you sell. No questions asked. Always cut your losses when wrong. It doesn't matter why a stock does this or that. There are always 1000 stories. The only thing you can do is have a proper buy and sell plan before you buy anything. Always cut your losses short when you are wrong. Never hold a loser.
I do indeed like CSOD. However, they do not make money and are not expected to turn a profit through 2012 and 2013. Once they start making real money, I will be very interested in checking it out and waiting for it to set up in a proper pattern.
It doesn't. I do analyze the financials of a company but not anything further than that. here are a few that do the same thing. Check out their track records and maybe it will make more sense to you:
Jesse Livermore
Nic Darvas
William J O'Neil
Michael Covel
Bill Campbell
Ed Seykota
William Eckhardt
Richard Donchian
Dan Zanger
James DePorre
Tim Sykes
RIchard Wyckoff
Salem Abraham
Bill Dunn
The Turtles
RLD failed in mid 2011 on huge volume. and only in January finally started to see some accumulation. Right now I am not interested.
I get all of my information from MarketSmith. It is a premium product offered by William J. O'Neil & Co. It cost $1000 a year but is worth the price for the information you receive.
I can not argue for or against the information there. All I can tell you is this is the retail version of the product WONDA that institutions use.
Great luck, HungryandFoolish.
Hello, YngvaiMalmsteve. I get my information from MarketSmith it is a premium subscription product that cost $1000 annually. This is a premium product for individual investors and institutions. Most institutions use WONDA (a big boy version of MarketSmith). I am not standing by their data. I am reporting what their data tells me. If it is wrong that is on them. I only care about the trend of the stock. The stock is on fire. I don't really care what the P/E ratio is or exactly what % of the float mutual funds own. That is "noise" in my personal trading. Price is all that matters.
As for you having trouble believing that. That is fine. :) Our beliefs don't mean anything to the stock market. The numbers are what they are. It is what it is. I believe nothing but price.
Aloha.
Hello, Alpha Dogg. I will give it my best efforts. INVN produced a pocket pivot point on Friday. TNGO had one on Thursday. Both are entry signals for those that are not long already.
Speaking of KORS...following Friday I do not like the short-term price action as that was a very heavy volume selloff and close near the open. I would watch it here and see how it digest this secondary before initiating another position here. Will hold 1/2 of my position but I am letting 1/2 go for now until I can see how it takes in this secondary in the coming week. A breakout above Thursday's highs and I am back in.
Thank you gentleman so much for your kind compliments. I am used to be ripped apart on this web site. So many warm you're welcomes from my little part of the world to yours.
I love KORS. We are long KORS from three areas. 1/17 breakout. 2/27 breakout. 3/20 pocket pivot point buy signal. We are up 69% on our first position and down -2% on our last position. The final position will be exited with a close below 46.51. We will continue to focus on KORS as long as the uptrend remains. We are also ready for the upcoming Facebook (FB) ipo based on its huge EPS sales growth.
I am no longer CJES. It is not moving higher immediately. I am positioned on the short side in the market and gold with heavy cash position now ready to be put to work on the short side.
This article was written Friday but just published today. CJES did not work. I don't hold losses ever.
Neon swan. LOL. I like it. :)
Thank you, CowpieTX.
Buy and Hold is dead.This isn't the "good old" days anymore and never will be again. It's called globalization. Bye Bill Miller.
So, fwiw, you can stop spamming this post. Mahalo.
Right now, I agree with your short position. The chart has rolled over here in october and is now selling off on very heavy distribution. As for everything you just wrote about...I don't know about any of that or have the time to read that.
I honestly don't care about the story. SA makes me write about this junk because sadly most investors (99%) are ignorant to the fact that all that matters is price. Price and volume. The rest is noise and useless when it comes to making money in the stock market over time. I am over MRGE and will not take a second look until it comes under accumulation and forms a good base. If that never happens, I will never see MRGE ever again.
Aloha nui loa!
Josh Hayes
BigWaveTrading.com
I have been doing this full time since 1996 and have over 130 years of stock market history knowledge learned under my belt...I have never studied or been through anything like 2011. 2011 is one of the worst years I have ever witnessed for false signals and trendless moves where some leading stocks just get destroyed. It doesn't make any sense. Minus July to August downtrend, it has been beyond a f'ing mess for trend followers. 2011 = worst year ever. 2001/2007 can't even compare to 2011.