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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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  • Leading Stocks Advance as Volume Swells 0 comments
    Oct 5, 2010 9:10 PM | about stocks: QQQ, SPY, DIA, IWM, JKS, LCUT, MIPS, SLGLF, RDWR, RES, CHTP, SPRD, ISLN, ASYS, TRQ, CGNX, SOL

    Positive Economic Data helps stocks push higher

    What a difference a day makes as stocks reverse Monday’s losses and zoom higher in increased trade.   Volume swelled as traders piled into stocks and with a positive ISM non-manufacturing report the market had all it needed to close higher.  The S&P 500 was able to clear last week’s high in tremendous volume leaving very little doubt about last week playing resistance.  Volume was above average as institutions played a role with today’s move.  A positive signal for the markets going forward, even with the Jobs report Friday and Earnings season just around the corner.  The market remains in a healthy uptrend and we’ll continue to be on the long side of the market.


    Bank stocks were a big part of the move today with the XLF up .33 to 14.73 a rise of 2.3%.  A big part of today’s move came from C stock.  Citigroup has been one of the companies under hefty public scrutiny surrounding its role in the financial melt-down.  C stock is one showing quite a bit of strength and if the bank stocks can show further strength it will give this market a higher probability of taking out April’s high.  Meredith Whitney has been negative on the banks, rightfully so, but we are seeing these stocks have a difference of opinion.

    A post done by Barry Ritholtz showing the “Smart Money” getting massively short gives another feather done in the up trend’s cap.  How can you blame the “Smart Money” as this economy continues to falter and unemployment (ex-birth/death rates) remains in double digits.  Not to mention if the market was priced in gold we have gone nowhere.  But, this is what opinions can do to you in the market.  What you might think can happen most often will not happen.  When you short the NDX you are effectively shorting all 100 components of the NASDAQ 100.  And when these shorts get squeezed they’ll be forced to go long the NDX.  Effectively, there will be massive covering and the uptrend continuing.

    Last week’s market was, up to this point a giant week of consolidation.  Even with last week’s spike into new highs the market was able to digest the September 1st follow-through day.  Plenty of leading stocks pulled back, but the market was able to hold up relatively well.  Flash forward to today we saw these same leaders gain support.  Volume in leaders was higher on the day showing once again panic never pays off.

    Yesterday I touched upon sentiment and what it meant to the market and given the bullishness last week we probably will see it continue higher.  Even with the “Smart Money” being historically bearish this market has other ideas.  The bottom line is the market is always right and it is a question whether or not you are on the “right side.”

    Cut your losses!

    Top Current Holdings With Total Returns Higher Today: JKS 140%, LCUT 136%, MIPS 56%, LGL 55%, RDWR 50%, RES 45%, CHTP 35%, SPRD 28%, ISLN 27%, ASYS 26%, IVN 26%, CGNX 19%, SOL 19%

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