Stocks end October on a sour note
October 31, 2011 | Comments Off
Economic news was mixed this morning, but selling in Europe was the focal point once again. The two o’clock hour brought on sellers as the market looked to wrap up one tremendous October. The month was one for the record books. Volume on the NYSE came in higher on the day with the NASDAQ coming in a bit light. However, it was the S&P500 getting stopped in its tracks and reversed from the 200dma is most notable. This type of action is not ideal and is a warning for longs in this market. Volume didn’t pick up until the end of day, but overall price action was pretty negative. We have a big warning signal and we’ll look to cut losses quickly if this market does turn sour on us.
This was one heck of an October for the markets. October 3rd market session was certainly something to remember as it appeared the market was going to go bust. Tuesday, October 4ths market rally off the lows in the final hour of trading was nothing short of amazing. The month was one for the record books as short sellers were handed hefty losses. It pays to keep losses small. This is why we always preach a sound cut loss strategy and never fight the tape.
New Seeking Alpha Article
October 30, 2011 | Comments Off
3 Retail Stocks To Try On For Size
Latest Seeking Alpha Article
October 28, 2011 | Comments Off
It’s two days old. My apologies. I forgot to post it on the webiste.
2 More Restaurant Stocks Serving Up Profits
NASDAQ sees above average volume and intraday support as small caps shine
October 27, 2011 | Comments Off
The standard blueprint of this market over the last few weeks has been where the market gains traction only to see it slip away into the mid-day session. To the rescue, buyers step up pushing the market back to the highs of the session. Once again, the blueprint was applied and we were able to see the markets back to the session highs. Small caps were the big winners of the day with the Russell 2000 closing at $727.15 +13.50 or 1.89%. Volume on the NASDAQ composite and the Russell 2000 were above average a sign of institutional strength. We have missed the institutions as of late and they were active in the NASDAQ and Russell. A solid close today puts another positive spin on the market.
It was nice to see a REAL accumulation day in the market. Despite the lackluster quarter from AMZN and a few other old leaders, institutions were out buying up shares of stock. Even with record low amounts of cash (~3.5%) for mutual funds, the market was able to find institutional buyers. While we haven’t seen an all-out go signal by the market it continues to defy the bears!
Europeans find a bandaid, US grows as expected and stocks respond
October 27, 2011 | Comments Off
In the wee hours of the morning in Europe, European leaders were able to strike a deal to a Greek haircut as well as levering up the EFSF. The news sent futures higher across the board and with the US GDP coming inline with expectations the market had all the fuel it need to push higher. Despite an early morning bout of selling, the market was able to rocket off the lows finishing the session just off the highs. Volume exploded today as institutions were quick to get back into the market hoping they would not miss any gains they may have already missed with the moves off the lows. A solid day worth of gains and today was certainly an exclamation point on the recent rally off the October lows.
The recent rally also spurred the number of bulls in the most recent AAII survey. The number of bulls jumped to 43% while bears were decimated showing only 25%. Given the recent gains the market is quite frothy at these levels. A pause here would be healthy for the market to catch its breath.
AMZN trips up in after-hours trading; Stocks fall on mixed volume
October 26, 2011 | Comments Off
Negative news from economic releases did not help out stocks today. Case-Shiller home price index dropped more than expected dampening hopes on a housing recovery. Worse yet, consumer confidence dropped to levels unseen since March 2009. In addition, the Richmond Fed Manufacturing index dropped unexpectedly totaling up to a disappointing start to the day. News out of Europe continued with a headline reading the EU Finance ministers weren’t to vote on the EFSF tomorrow. However, they are going to continue with the summit! Stocks were able to find their footing after the European headlines and economic news, but the support quickly faded. There wasn’t any buying spree into the close, perhaps a shift in market behavior? All told, a negative price action day with the NYSE indexes notched a day of mild distribution and the NASDAQ escaping for now.
Europe simply cannot get its act together. They have a terrible issue at hand and a huge void of leadership making matters worse. The yo-yo type media reports are quite interesting and disturbing at the same time. Regardless of the decisions being made we’ll ultimately follow the market where price and volume give us signals. The hoopla is quite entertaining.
NASDAQ Clears a Hurdle, but Volume Lags Again
October 25, 2011 | Comments Off
Stocks climbed higher today as the attitude of “no news is good news” from Europe continues to take hold. There has yet to be a vote on the EFSF yet and that has been a positive for the stock market. Small caps lead the way higher with the Russell 2000 closing with a 3.3% gain while the NASDAQ notched a gain of 2.35% (closing above its 200 day moving average). Volume ran lower on the day and below average volume a sign institutions still are not jumping into the market with two feet. Perhaps with the release of GDP out later this week we’ll see institutions jump back in the market. Another solid price action in the markets and we’ll continue to pick our spots.
Tomorrow the market will get housing data from Case-Shiller. Homebuilders got a boost last week from home builder confidence, but will it continue? The market will answer the question tomorrow. In addition, we’ll get another reading of consumer confidence. It will be more of the same, it won’t be as bad as everyone thinks and it will be viewed as a positive. We’ll also see the Richmond Fed Manufacturing Index released at 10 am EST. It all boils down to how the market reacts to the figures. Trying to game the figure will only leave your head spinning. Go with the market and stay prudent.
Current Top Holdings And Returns In The Big Wave Trading Portfolio
October 24, 2011 | Comments Off
Currently Big Wave Trading remains in an overall market neutral position. The current short-term stock market rally while providing hints that it could last longer is still under pressure via the below average volume on the rally. Due to the low volume on the rally the possibility of failing here is still high. Until volume returns above average on the Nasdaq, we will continue to hold a neutral overall stance to the stock market. A breakdown on heavy volume here would trigger a full sell signal. At the same time, a move higher on very large volume would trigger a full buy signal. Since the market is volatile and the trend is clearly mixed (from August 2nd to October 21st the Nasdaq is only down 1.2% despite major up and down volatile swings), cash remains the largest position in both Big Wave Trading accounts. The Big Wave Trading Retirement account is currently long 3 bull ETFs for a 15% weighing with the rest of the funds in cash. The Big Wave Trading Margin account is currently long two stocks making up 3% of the account (non-margin %) and short 12 stocks making up 23% of the account (non-margin %). 4 of the 12 shorts make up 20% of the account. The majority of the remaining shorts were introduced into the portfolio from July-August period and thus we have taken profits a couple of times on these. When volume returns to the overall market indexes, we will move the 75% and 85% remaining cash into whichever ETFs/stocks trigger buy/short signals. Cash remains the proper play while volume eludes the market.
current top holdings (all shorts) – % returns (non-margin) – date of long/short
Stocks Reverse Off Lows and Finish Near the Highs
October 21, 2011 | Comments Off
Buyers stepped up mid-day to save the day as early morning selling sent the NASDAQ below Tuesday’s low. Volume surged on the selling, partially helped out by stocks reacting to earnings news. However, the heavy volume selling during the early morning session was signaling trouble ahead. This was before buyers stepped up and sent stocks back to the highs of the session. By the close, the NASDAQ notched another (technically speaking) day of distribution bringing the total to two since Tuesday’s follow-through day (three since IBD’s confirmation). It does appear this market is getting support and buyers are finding themselves stepping up, a positive sign.
We are beginning to see some bases form in recent IPOs. Whether or not they pan out remains to be seen, but it is a positive signal. Unfortunately, stocks like WYNN and BIDU former leaders are getting hit hard. Other leaders like OPEN, LULU, NFLX, and others have broken down leading us to believe we still remain in neutral mode. We’ll get a signal to go either way here.
New Seeking Alpha Article
October 21, 2011 | Comments Off
