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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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Big Wave Trading
  • Big Wave Trading Portfolio Update And Top Current Holdings 0 comments
    Jun 9, 2013 8:17 PM | about stocks: VCEL, WDC, V, TECU, GMCR, INSM, AMWD, SBGI, BBSI, WAGE, ADUS, CHUY, FLT, GLL, PFBI, GNMK, RVLT, POWR, HIMX, HEES, EAC, CSU

    The Big Wave Trading Portfolio remains under a NEUTRAL condition but did see the model switch to a cosmetic-SELL mode on Wednesday only to be flipped right back to NEUTRAL on Friday. This quick flip-flip was not shocking on a discretionary basis as the signal triggered with only the NYSE under the 50 day moving average. On top of that, as we have constantly warned, since 2011, SELL signals are going to have to be confirmed in all indexes, ETFs, inverse-ETFs, inverse-leveraged-ETFs, and with leading stocks breaking down, before any SELL signal is actionable on a position taking basis. QE, ZIRP, and POMO makes taking SELL signals nearly impossible and it is not anything we will be interested in seeing until we see a real parabolic/climax conclusion to all of this economy propping.

    Despite the fake signal, it was an overall decent week. The bad news is that our early hedges that were doing nicely hedging our longs by Wednesday left us with mostly losses by Friday. However, what turned out to be great news for us, on the flip side, we did not produce one single full sell signal on Wednesday, when our model did a false switch. The fact that the market cracked and we had zero sell signals in our long holdings was a hint that the market was stronger than the tape was letting on. On top of that, what turned out to be the worst missed trade on our end since 2011, we saw an extremely high quality long signal producing in what is currently a non-CANSLIM stock (it will be shortly in the upcoming quarters). That stock was TTS. The signal it produced that day would be considered an 8.5 out of 10 using our internal criteria and that is an extremely high rating on a new long signal (obviously 9s and especially 10s are very very rare).

    Unfortunately for me and my portfolios, we have never received such a beautiful signal on a day where we switched to a SELL mode. This has never happened. I began trading my trading career in 1996, went full-time in 1998, and from these moments have never seen such a signal on a day of a SELL signal. So what to do? Well, since I didn't consider it "perfect" (a 9.5 or 10 out of 10) I decided to pass and let the model take control. That was a big big mistake as TTS has rocketed higher 13% in the two days following this lovely signal. On top of that, the SELL is now NEUTRAL. Lesson learned.

    What was the lessen? Well from now on I know that when the market is trending above the 50 day moving average on all of the most important major market indexes, we have many long positions holding up well in our current portfolios, we have many stocks still setting up in strong bases, we have very few stocks breaking down hard in my short scans, and we get a near-perfect high-quality long signal on a day when we do switch to a SELL we take the trade.

    Now, I have to watch TTS do what it is going to do and "hope" that it produces some sort of follow-up signal to try to get me long this wonderful pattern. We shall see if I get a second chance. I will not be holding my breath, however. Still, it was a very important lesson learned and goes to show that even with almost 20 years of full-time stock market experience you can still teach an old dog new tricks. Well played Mr. Stock Market. Well played.

    Big Wave Trading never needs to learn a lesson the hard way twice.

    Have a great upcoming rest of the week everyone. It's been a nice weekend, despite the TTS missed trade on our end. Truth be told, I am more upset that the season finale of Game of Thrones is tonight than I am I missed that trade. As far as I am concerned, Game of Thrones, should never end and never go on break. Just keep the camera rolling and George R.R. Martin writing. Aloha!!

    Top Current Holdings - Percent Return Since Signal Date - Signal Date

    EAC long - 228% - 12/17/12
    HIMX long - 185% - 12/19/12
    CAMP long - 132% - 4/26/12
    POWR long - 125% - 12/11/12
    RVLT long - 114% - 3/26/13
    CSU long - 107% - 9/4/12
    FLT long - 95% - 9/6/12
    HEES long - 82% - 9/4/12
    ASTM short - 72% - 7/17/12
    INSM long - 72% - 4/19/13
    GNMK long - 71% - 11/16/12
    WAGE long - 64% - 1/8/13
    WDC long - 46% - 1/9/13
    BBSI long - 45% - 2/13/13
    ADUS long - 41% - 4/22/13
    V long - 40% - 8/31/12
    CHUY long - 40% - 1/10/13
    SBGI long - 39% - 3/22/13
    GMCR long - 35% - 4/23/13
    TECUA long - 31% - 2/5/13
    GLL long - 31% - 2/14/13

    AMWD long - 30% - 2/1/13

    Disclosure: I am long WDC, V, TECUA, GMCR, INSM, AMWD, SBGI, BBSI, WAGE, ADUS, CHUY, FLT, GLL, PFBI, GNMK, RVLT, POWR, HIMX, HEES, EAC, CSU.

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