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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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  • Light Trading Volume Persists; Stocks Pull Back Notching A Day Of Distribution

    A better than expected Homebuilder sentiment reading failed to lift stocks and sent homebuilding stocks lower. Trading volume rose above Monday's level, but again was below average. The major stock indexes did notch a day of distribution in technical terms. However, the damage was minor and we are considering this to be a light distribution day. The S&P 500 and NASDAQ Composite ended its win streak at 8 straight days of gains. Traders now await Ben Bernanke's testimony tomorrow. There were pockets of weakness, but until we see more of this action this uptrend still is in play.

    TSLA was the talk of the town after the stock fell more than 18 points. The stock has had an amazing run since its initial breakout in April. The stock has more than tripled from that point to now. It is not unlikely to see the stock break after hitting new highs. If you bought the recent low volume breakout you are likely underwater and highlight a point of being nimble when buying extended stocks. However, if you are in from April you have plenty of leeway. Just remember to take profits along the way. If you have a sound trading plan you aren't panicking over the move. If you are, come join us.

    Yesterday we pointed out the homebuilding sector as being weak. After initially climbing after the sentiment release the entire sector sold off. Today's action highlights what you think may not necessarily happen. The price action as of late has been bearish, not bullish. Could the sector turn around after tomorrow's release of Housing Starts and Building permits? The answer is yes, but given the evidence we have now it doesn't seem likely. Stick with price and ignore the noise.

    There were plenty other leading stocks like XONE and SSYS who were hit today. It is not unusual to see leaders get hit, but when they begin to get hit all at once over a period of time it usually spells trouble for the overall market. Today was one day and we remain in an uptrend. Until there is sufficient evidence given to us from price we are going to stick to the long side. Maybe the top callers will be right here…or they won't.

    Enjoy watching the fireworks go off courteous of the Fed Chief.

    Disclosure: I am long DDD.

    Tags: XONE, DDD, SSYS, XHB, ITB, QQQ, SPY, DIA, IWM, TSLA
    Jul 16 11:48 PM | Link | Comment!
  • Big Wave Trading Portfolio Update And Top Current Holdings

    The Big Wave Trading portfolio is currently under a BUY mode across the board, with the Nasdaq fully switching to a BUY signal on the 9th with the SP-500 and DJIA following on the 11th. These indexes now join the Russell 2000 which was placed under a BUY signal last Friday. The Russell 2000 is leading the current model switch and was able to build on the gains nicely the past week. Every index performed well this past week. It was nothing short of extremely impressive.

    What makes it even more impressive is that the rally in the overall market is on fumes. That goes for many recent breakouts in high priced highly liquid CANSLIM quality securities. Don't get me wrong, there are plenty of leading stocks breaking out on volume. However, there have been too many TSLA, SPWR, PCLN, GOOG, AMZN, MCD type moves for my personal liking. At the same time, while I may not like it, it doesn't matter. Those that are focusing on price action alone in leading stocks are enjoying their gains as long as they are buying at the exact pivot points in their technical consolidations. For those that can not watch the action all day, I will remind you that you can use buy stops to buy a stock as soon as it breaks out to new price highs.

    Even with the overall low volume, the rally is still impressive. Many stocks are moving higher on volume and many others are setting up in price consolidation patterns with solid accumulation/distribution patterns. I am sure that even if the market pulls back here, knowing that the Fed is in full-on QE/ZIRP/POMO mode, support should be found in the overall market. This hypothesis is based on the current technical patterns remaining as they are and in turn developing into even more bullish technical patterns in the upcoming weeks. If individual stock price patterns falter, this assumption on price action will be nullified. Still, the trend with POMO/QE/ZIRP is very clear. Pullbacks are to be bought and stocks can not sell off more than 10%. That will definitely change one day and this will definitely lead a lot of people that are greedy into the poorhouse but until then you simply can not fight the overwhelming trend.

    Calling tops has been killer to traders the past five years and yet I still see constantly on stock twits and facebook. It was not too long ago on 5/22 that so many new traders/investors were confident this market had top. Now these same traders find themselves underinvested and/or not invested at all. This is the purpose of the market. It is there to fool most of the people most of the time. Looks like they were fooled again. This is why in times like this, if you do not have a system, and invest on emotions, you are going to have a bad time. Emotions are a killer in the stock market. They can only hurt returns over the long run. You must learn to eliminate them, if you are going to learn how to hold stocks like the stocks you see listed below for the big long-term gains. The big money will always be in the sitting and in this market sitting has never been harder. Trust me. I don't even come close to seeing the gains I saw in my personal accounts from 1998-2008. On top of that, stocks simply do not move like they used to. Compare the performances below to some of my past big winners and you will see times have changed.

    One day they will go back to normal. However, until that day happens, it is what it is and price action is all that matters. The trend is your friend until it bends at the end. Make sure that you don't show up late to the trend and ride it lower when it bends and all the smart money is exiting. The Nasdaq has been up 12 of the past 13 stock market sessions yet I see many traders looking to get heavily long here. Seems a tad late to me. However, what do I know compared to what the market knows? The exact same thing you know. Nothing. The market discounts all. Price action is all that is real. Continue to follow price and ignore volume. In this QE world it is leaving many traders underinvested. You must learn to discount it.

    Have a great rest of your weekend and a wonderful upcoming week. Make sure you obey your systems, especially your stops. Always cut your losses short. Never ever ride a losing position and never ever add to a losing position. Especially in a melt-up tape like we have now.

    PS: Can you tell I just got done reading my third Jesse Livermore book of the summer? It is an annual ritual. I recommend it both for new and experienced traders. Once again, have a great weekend. Aloha from Maui!!

    Top Current Holdings - Percent Gain Since Signal - Date Of Signal

    CAMP long - 181% - 4/26/12
    RVLT long - 165% - 3/26/13
    POWR long - 150% - 12/11/12
    CSU long - 107% - 9/4/12
    HEES long - 95% - 9/4/12
    FLT long - 93% - 9/6/12
    WAGE long - 90% - 1/8/13
    ADUS long - 86% - 4/22/13
    SBGI long - 71% - 3/22/13
    CHUY long - 69% - 1/10/13
    WDC long - 54% - 1/9/13
    TECUA long - 49% - 2/5/13
    V long - 48% - 8/31/12
    GLL long - 47% - 2/14/13
    INSM long - 44% - 4/19/13
    MEI long - 40% - 4/10/13
    LGF long - 39% - 4/19/13
    ADS long - 31% - 12/11/12
    WST long - 30% - 1/22/13
    DDD long - 27% - 4/30/13

    BEAV long - 26% - 3/5/13

    Disclosure: I am long CAMP, RVLT, POWR, CSU, HEES, FLT, ADUS, WAGE, SBGI, CHUY, WDC, TECUA, V, GLL, INSM, MEI, LGF, ADS, WST, DDD, BEAV.

    Tags: CAMP, RVLT, POWR, CSU, HEES, FLT, ADUS, WAGE, SBGI, CHUY, WDC, TECU, V, GLL, INSM, MEI, LGF, ADS, WST, DDD, BEAV
    Jul 14 4:51 PM | Link | Comment!
  • Stocks Rise As Volume Ends Mixed

    Sloppy action began the day as sellers immediately hit the open. However, just after 10:30 and during the Fed's open market operations did the market find its footing and reverse course. For the fourth straight day the market saw gains, but volume ended mixed on the day. NASDAQ volume was higher on the day, but slid on the NYSE. Traders weren't too active on the NYSE today. Perhaps tomorrow's release of the FOMC meeting minutes is weighing on trader's minds. Whatever it is, trading was not active today on the NYSE giving pause to this most recent rally attempt. Price action remains okay for the markets, but without a confirmation day it is looking like if this rally is to continue gains will be limited.

    Homebuilding stocks turned things around today. The group has been beat up for quite some time. Higher interest rates will certainly negatively impact buyers' purchasing power. Price action in the names still needs some work to show any turnaround is possible. For now, we'll keep an eye on the group for improvement. Any weakness will certainly be a sign of things to come for the group.

    HYG and JNK continue to act like junk despite HYG's attempt today. It is anyone's guess where rates will go next, but for now it appears higher rates are here to stay. HYG and JNK certainly have been hindered by higher rates. Even XLU has come well off its high set back in April. Anything related to yield has been taken to the woodshed. Until we get a signal otherwise, it appears these sectors will continue to be under pressure and see lower prices.

    It was interesting to see the XLF breakout today approaching May highs. Financials are an important indicator on where the market is heading. First we had Small Cap stocks breakout into new high territory and now with financials nearing a new high this is certainly a positive for the overall market.

    There are positive signs for this market and there are negative. Confused? Biased? Join Big Wave Trading and focus on winning.

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

    Tags: IWM, QQQ, DIA, SPY, JNK, HYG, XHB
    Jul 10 3:23 AM | Link | Comment!
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