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Joshua Hayes
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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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  • Syria Headline Clips Gains; NASDAQ Shines As Volume Rises

    Another day and another missed shot at a bona fide follow-through day. However, given the volume surge in the NASDAQ and its ability to clear/hold yesterday's high things are brighter than they may seem. The Fed's Beige Book release did little to stock movement, but now with the focus on data it appears the Beige Book has been left in the dust. All eyes continue to drift towards Friday's job report and continue to ignore what they should be paying attention to. It is clear the NASDAQ has and continues to be the clear winner amongst the major market averages. While we didn't get a true follow-through day today is much more positive than meets the eye.

    Anything is possible and with a lot of headline headwinds many will be fearful of what may or may not happen. Sure we can get a rush of sellers completely wiping out gains over the past two days, but we are missing one key component: our crystal ball. No one knows the future and we can only trade the now. While we still have a short-term downtrend it is looking more likely this market pulls out of the recent trend and resume moving higher. Volume has been above average the past few days with solid gains, not something we have been accustomed too. Stick with the process regardless of what your opinion is.

    We all know cutting losses and riding your winners is a staple of trend following. Ignoring these rules is hazardous to your trading. Another rule when broken that is even worse is not taking your signals. Ignored Entries/Exits over time will erode your performance greatly. Imagine losing your biggest winners over a course of the year…you'll notice you will significantly lag the market. Not taking an entry signal and missing on potential gains is just as important as taking an exit signal. Failure to do so will end up costing you in the long run.

    Ride your winners and enjoy the ride.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: QQQ, DIA, SPY, IWM
    Sep 05 8:48 AM | Link | Comment!
  • Stocks Fall Hard In Heavy Trade; Homebuilders Rally

    A slew of positive economic data helped bolster the case for the Federal Reserve to taper its money printing scheme. Apologies, taper the quantitative easing program. The S&P 500 blew by a key level we had been watching in heavy trade as well as the NASDAQ. Leading the market to the downside were small cap stocks with the Russell 2000 falling 1.93% on the session. On the positive side, a better than expected homebuilder sentiment drove housing stocks higher in heavy volume. Volatility jumped as the fear trade kicked into gear one day ahead of options expiry. A nasty day of selling ahead of options expiry and pushing our uptrend out of the way.

    It is important to obey your trend following rules. Did you have a stock break through a key moving average, channel, or ATR stop? Whatever your sell rules are you must obey them. Ignore them at your peril. No one knows whether or not today was a buy-the-dip-day or the start of something more sinister. Do not ignore your rules.

    The S&P 500 did drop below 1680 in heavy trade leading us to believe we are likely to see the major index to test its 50 day moving average. For the NASDAQ, to see its 50 day moving average will take a bit more effort by sellers. Over the next couple of trading session how each index reacts to its 50 day moving average will be a key indicator how we proceed forward. Keep your focus on price action and the market will guide you.

    Sentiment continues to favor the bull camp, but has come in week over week. Bulls did drop on the AAII survey with Bears inching up a bit. However, bulls still sit at 35% while bears sit at 28%. NAAIM sentiment saw a dip in bullishness due to more bearish bets being placed on the market. We have yet to see extreme sentiment, but perhaps this is apart of the "new normal." Either way; price rules our actions and everything else is a cocktail conversation.

    Stick to your rules and with Big Wave Trading.

    Aug 16 12:20 PM | Link | Comment!
  • Another Hindenburg Sighting; Europe Emerges From Recession

    Its official European nations are out of recession as GDP rises above expectations. The news did very little for US stock futures and neither did Mortgage Applications which fell 4.7% week over week. Homebuilders once again were weak on the session and continue to look very weak. Buyers kept to the sidelines today with the market drifting in a range all day long. Keeping the market from pulling back further was AAPL as the stock punched through $500 or what was known earlier this year as the generational bottom. We continue to move sideways in this market digesting July's gains and we remain patient studying price.

    Another Hindenburg sighting was made today making it the 6th time in 8 days (Business Insider and Zerohedge confirmed) the magical formula for predicting crashes has shown up. The omen doesn't have a perfect track record by any stretch of the imagination, but it did show up in similar fashion in 2007 and 2000 prior to those bear markets. Can we reasonably guess the same will occur? No. We'll simply follow price action and let it dictate our next move. Key levels on the downside are 1680 and on the upside is 1710. If we do see this market plunge through 1680 in heavy trade we may have something to the downside. Until then we are sticking with our plan.

    Here are the Hindenburg Omens:

    Homebuilding stocks continue to take a beating and today was not an exception. ITB and XHB are in downtrends and continue to act weak. Both ETFs are signaling more lows and if buyers do not step up here homebuilders are at risk of a steep decline. Probabilities say a modest decline is certainly likely. In the same boat, but further down the stream are JNK and HYG. High Yield tends to run alongside equities, but not since May. HYG and JNK continue to show weakness in the High Yield space calling into question if we are about to see some trouble in High Yield land. As the 10 year moves higher the ability for questionable borrowing will simply become more difficult to obtain. Perhaps another "omen" for this market, but we'll need to see further evidence.

    Will the Hindenburg turn into something real this time around? Stay tuned.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Aug 14 11:34 PM | Link | Comment!
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