Since making its most recent high on July 20, the NASDAQ has fallen below its 50 day moving level twice. Should it rally above that level but fail to reach Thursday's high of 5175, then it will qualify as being a short sale possibility.

Although earnings reports have been mixed, the economic news is generally positive and Friday's jobs report was in-line with  expectations. Analysts believe this increases the likelihood that the Fed will raise interest rates at their September meeting so we are likely seeing stock prices adjust lower in anticipation of tightening of liquidity.

Unsurprisingly, our market trend signal for the DJI remains negative after 7 successive losing days, while the S&P 500 and NASDAQ Composite trends remain positive, although as noted  above, this may change soon enough and so caution is advised.

No new features this week.
 

Use Above Average Volume Filter to Identify Possible Strong Breakouts

Our top performing breakout this week came from our Volatility Squeeze watchlist. The breakout came on Wednesday as the stock gapped up. The gap up of 10% put it well outside our recommended 5% limit so there was little opportunity to capture the 17% gain on breakout day, but an astute reading of the chart would have allowed an entry on Monday. The chart below shows that on Friday, July 31, the stock qualified for our Volatility Squeeze watchlist and the stock was setting up for a possible breakout to come.

Use of our Above Average Volume filter (described here) on the watchlist on July 31 would have selected AMSG and the  trade could have been entered at Monday's  open.