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Joshua "MauiTrader" Hayes is CEO, President and founder of Big Wave Trading Inc., a Maui, Hawaii-based stock market advisory service. Hayes is a well-respected stock trader who combines fundamentals, technicals, psychology and money management to trade professionally for his personal,... More
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  • Trade Slows As Stocks Soar

    Europeans got the market started with a jolt from their latest PMI report showing a better expected jump.  The index showed a reading of 56 when the market expected 55 as the reading.  It was all the market needed to push higher.  US futures jumped and held through an unexpected rise in jobless claims as the market jumped at the open.  Existing Homes sales were expected to drop over 9%, but were only down 5% month over month.  This was all the fuel the market needed to push up and over the 50dma.  Last Thursday’s high acted as a barrier for the market, but we did close in the upper end of the range with volume slightly lower on the NASDAQ and lower on the NYSE.  Overall, a great day of price gains with little conviction behind the move.


    Last night I talked about the needing to see POWER from this market.  There were a few stocks breaking out today on big volume, but they weren’t a plentiful bunch.  Volume was running higher than Wednesday for much of the day, but when 2 o’clock came around the volume compare was going to be a difficult challenge.  A slight sell-off from the day’s high helped volume get back what is lost, but we were unable to sustain the levels seen earlier in the day.  Often times these types of big gains are often shorts who are covering and panic out of their positions.  Any number of reasons could be given for example many were anticipating the ECB releasing the stress tests and expect good results.  Whatever the reason, volume wasn’t able to climb above the Bernanke crash created on Wednesday.  This could end up meaning absolutely nothing and we continue higher, but it is something to pay attention to.

    In after-hours trading Amazon, Sandisk, Microsoft, and Bucyrus all traded lower after the bell.  Most notably, Amazon finished lower by 10.8% after missing their earnings and revenue.  Retail continues to be a weak spot in this economy and we do not have to look further than the weak job environment.  Consumers will only flock to the best and the very best and why Apple Computer continues to shine with revenue growth.  Bucyrus even climbed above its 200 day moving average today, but will find it difficult to stay above it tomorrow.  Tomorrow will be an interesting day for these stocks and will move the markets.

    Chipotle Mexican Grill posted stellar earnings and saw its stock trade higher in after-hours trading.  Sadly, the stock dove through its 50dma and is indicated to open below the key moving average.  However, perhaps it can retake the 50dma with big volume and possibly set up in the future.  For now, this former leader is still suspect.

    Since last Thursday we have had two big distribution days and one day of accumulation and we are right back where we started.  We’ll need to see accumulation from the indexes quite soon even though the big indexes:  NASDAQ and S&P 500 are above their 50dma.  The market always aims to fool, so be ready.  Cash is still king until we get a better picture of institutions getting back into this market.

    Disclosure: Short ISRG
    Jul 22 10:03 PM | Link | Comment!
  • “Unusually Uncertain” Rips Through the Market Sending Stocks Lower in Fast Trade

    The market got a jolt of good news from Apple Computer and set up stocks to open higher from the get go.  Traders were falling over themselves to get a piece of the action as volume soared at the open.  Unfortunately, the highs of the day were set at the open and the market would fail to see those highs again.  Sellers took to the market, but not at a high rate allowing dip buyers to push the market back to the mid point of the trading range.  The action got going with Ben Bernanke’s comments the economy was “unusually uncertain” it was all sellers needed.  Volume picked up pace and traders sent the market lower.  Crude oil went lower and the dollar raced higher with bond yields diving.  Fear certainly appeared as the market closed just off its low with volume moving higher.


    Another high volume failure at the 50dma for the major market averages, the second time in 4 days.  Even the mighty Apple Computer could not escape the wrath of the market where the stock finished at its lows and below its 50dma.  On a positive note, the silver lining was we were able to avoid taking out Tuesday’s low, but that is a small consolation prize.

    Volume is now coming in on the downside and with big consequences.  The failure to get back above the 50dma is a large red flag for this market and one should be taking precaution.  I have pointed out the lack of POWER this market has had over the recent weeks like in a new uptrend.  Successful new uptrends are accompanied with big volume moves with broad leaders.  Stocks should be moving in groups,  not just single stocks from one industry.  Power is what we need to see to get long and so far we have yet to see POWER.

    Cash still remains king, but if you have been long you might want to trim or cut your positions.  If you are on margin GET OFF.  This market is more suited for shorting than going long at this point.  Unless, of course we get our power.  We have plenty of short targets to take advantage of and with this market continuing to fail at important levels our probability of success grows.  This market isn’t about to cough up a solid uptrend just yet and for now the large trend remains down.

    Remember, cash is king and now it appears shorting is a close second.  Always trade with a cut loss plan, it is the best insurance policy for your trading capital.

    Remember, we are running a discount for our Platinum, Gold, and Silver memberships… are you ready to take advantage of this market? Time is running out.  Here is the coupon code:  A5AE5.

    Disclosure: Short ISRG
    Jul 21 9:51 PM | Link | Comment!
  • The Market Stages a Big Reversal as Volume Jumps

    Earnings headlines certainly spooked the market as well as housing data from the start.  Traders crushed the open sending shares down to their lows of the day before rebounding.  Volume rose on the day showing some support for stocks, but still lacked the thunder normally seen when big institutions step up to the plate.  Price gains were hefty as Google and Apple Computer led the NASDAQ higher as well as Goldman Sachs.  Stocks just finished off their highs of the day capping off quite a rally leading into some big earnings reports.


    Apple Computer was the most notable release and as usual it crushed estimates.  If you don’t know by now, this is how they play with earnings:  beat then guide lower than the street.  Quite a simple recipe for success!  However, looking at where the stock ended the day on its earnings in April the stock closed at 259.22 and in after-hours trading today it closed at 259.20.  In a span of a month in back to back “Best Quarter” ever the stock hasn’t moved more than two pennies.  I would think having back to back “Best Quarter” ever the stock would be much higher than where we see it today.  Value folks will say its a steal and those looking for price confirmation will say it is weak.  Thus, we have a market for the stock.  And with it coming under distribution as of late we’ll need to see the stock move higher with conviction.

    The market shrugged off housing start data showing the lowest level since October of 2009.  It is no secret the housing market will remain in trouble until the supply and demand picture becomes more clear.  As long as prices stay high demand will simply not meet supply.  We saw this scenario play out as the tax credit expired.  But, the stock market has been able to shrug off negative data and today showed once again it simply isn’t looking at the housing market.

    We certainly need to see some power from this market.  Perhaps we get the signal tomorrow or Thursday, but we need to see the institutions begin to operate in this market.  So far we have yet to see strong leadership with massive volume.  Are we close, sure, but we’ll need to see some power soon for this market to really show us some strong gains.  We are still below the major moving averages and a strong showing from the market to get above these levels will go a long way!

    Remember, we are running a discount for our Platinum, Gold, and Silver memberships…if we roll over or blast higher are you ready to take advantage of it?  Here is the coupon code:  A5AE5.

    Disclosure: No Positions
    Jul 20 11:04 PM | Link | Comment!
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