Russell 2000 And NASDAQ Lead The Way As Volume Jumps

Aug. 08, 2012 2:59 AM ET
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Joshua "MauiTrader" Hayes is CEO, president and founder of Big Wave Trading Inc. (http://www.bigwavetrading.com/), a Maui, Hawaii-based stock market advisory service. Hayes is a well-respected stock picker and technician who combines fundamentals, psychology and money management to trade professionally in his own family, and friends accounts for more than 12 years on Maui. Hayes also runs BigWaveTrading.com, an online stock market commentary and stock selection service for short- and intermediate-term investment strategies using CANSLIM and other strategies. Hayes has been a contributor to Telechart as Sir Aloha, Realmoney.com, InvestorsParadise.com and TokyoJoe.com.

A weak close once again dampens the day's rally, but volume rises suggesting institutions have crept back into the market. Economic news will be light throughout the week and today wasn't any different. By Mid-day the market had racked up good gains and volume was heavy suggesting the big players were active buying up shares of stock. While not overwhelming it is a good sign to finally see volume kick up showing institutions are somewhat willing to accumulate shares. We continue to see stocks move off of earnings releases and have been profitable. A good sign today and while we remain defensive we'll need to see volume continue to flood the market.

Summer time is not known for volume, but on solid price gains we'd like to see volume come in at least above the prior day. If we are lucky, we'd even take near the 50 day volume average. So far, we have yet to see such occurrence and more than likely due to HFT and Indexing. Many mutual funds manage to an index or better known as a benchmark. "Just buy the index" means just that and therefore you are seeing money chase after stocks how are in their benchmarks. The key is finding the stocks under accumulation and using proper entries and exits. Remember, you must stick with it to capitalize on the opportunity out there!

Europe continues to be headline materials as Spain and Italy at some point will ask for a bailout. Economic news out of the Eurozone continues to be dismal. There isn't any growth in the continent and now are relying on the ECB to bail them out. Same goes for the United States as many are expecting another round of Quantitative Easing. We may be rallying on hope, but it simply doesn't matter. The mere fact we are rallying is all we care about. Reasons are pointless and by the time you have it all figured out the move will have passed you buy. Whether its bailouts from the ECB or the Federal Reserve printing more money at the end of the day it all boils down to price.

Always have a plan! Know your entries, exits, and position sizing. All are vital to your trading success. Remember, always cut your losses!

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