|Weekly Newsletter 12/17/05|
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There were signs this week that the rally that began in mid-October has faltered. Despite encouraging news on inflation, which might have kept interest rate increase fears in check, and a nuanced statement from the Federal Reserve implying interest rate increases may be nearing an end, the market ended the week mixed with little up or down movement. The DJI added 0.9% and the S&P 500 rose 0.63% as investors favored large-cap stocks over technology and small-caps, while the NASDAQ Composite slipped 0.19%. Friday's trading introduced uncertainty into the picture as volume picked up sharply due to the expiration of options and futures contracts, but an analysis of the trading pattern of the last two days may allow us to see the signal through the background noise. Each day started with investors almost willing the markets to go higher, but as they did so the underlying failure of belief took hold and the early gains gave way to profit taking. This caused two additional distribution days for the NASDAQ bringing the count to five out of the last fifteen sessions and our market model flashed an 'exit' signal. It seems this is a good time to take profits from the recent rally and sit on cash for a few days while the market direction becomes clearer.
The NASDAQ is still riding above the bearish wedge we have discussed previously, but a head-and-shoulders pattern is now evident in recent trading.
This is considered bearish when the pattern breaks the neckline and we see it has done so over the last two days. This technical signal is further confirmation of the exit signal generated by our model.
This is the last newsletter for 2005, so I would like to take this opportunity to wish all our web-site and newsletter subscribers the very best wishes for the holidays and the New Year. We're excited about 2006 with the advent of our new TradeWatch service. It promises to bring better performance to our own investments and those of our subscribers also. Everyone can take advantage of this service over the next two weeks as it is open to all.
We were asked to provide a gift subscription service and now we've done so. See new features below.
|New Features this Week||Additional Value that we added this week|
Send a gift subscription to someone you know. This is accessible from the Subscriptions > Gift menu choice.
|This Week's Top Tip||Tips for getting the most out of our site|
We are pleased to announce that 'Breakout Trader' is now operational in beta test. There are significant enhancements to what was previously released.We hope to complete testing and be fully operational on January 3, 2006.
This service is open to ALL subscribers and Guests until January 1, 2006.
The TradeWatch section of our site is designed to provide subscribers with a fully self-contained service for selecting, buying and selling stocks derived from our main cup-with-handle watchlist and supporting research data. There are four components to this service accessed from a menu-bar.
1. "TradeWatch": watchlists of stocks which our research has shown will give the best returns for three kinds of trading styles:
These lists are carefully compiled based on our four years experience in selecting and monitoring breakout stocks. They are highly selective and on any day there will be only a few, if any, stocks on these lists. They are selected to give the highest probability of breakout and return over the designated time horizon.
2. "TradeWatch History": a 'History' list of stocks on each list with access to performance, charts and technical sell recommendations
3. "Sell Assistant": this applies our Sell Model to any stock which you provide to it and provides an opinion on when and if the position should be liquidated. If the Sell Assistant considers the position should still be open, it will ask if you want to establish a sell alert on the stock.
4. "Sell Alert": a service which will send an email when any stock that you have designated is given a sell signal by our Sell Model as of the market close.
Rather than describe the service in detail here, I urge you to visit the site and click on the 'TradeWatch' menu choice and then explore the service. There is a fuller explanation of the service accessible from the 'Help' button on the Breakout Trader page.
Although this service is open to ALL subscribers and Guests until January 1, 2006. Only existing or new Trial subscribers will be able to setup and receive Sell Alerts, however.
After January 3, 2006, this service will be available as an add-on to all subscription levels, including Platinum, for $39.95 per month with discounts of 10%, 15% and 20% for 3, 6 and 12 month commitments.
As a loyalty reward to Platinum subscribers who have been with us for at least 12 months, the service will be free for three months, or until their subscription expires, whichever comes sooner.
Special pre-release window pricing. There will be a special discount of 10% for sign-up between December 26 and January 2. That is, the price will be discounted to $33.95 with discounts over the standard price ($39.95) of 20%, 25% and 30% for 3, 6 and 12 month commitments.
No charge to 12 month Platinum Subscribers. The service will be included at no charge for 12 months to Platinum subscribers with a 12 month subscription in effect on December 31, 2005. This is an incentive to upgrade to a 12 month Platinum subscription, or renew your Platinum subscription for at least 12 months before year-end. Platinum subscriptions renewed or upgraded after December 31 will incur the standard add-on pricing to access the service.
Thanks go the the subscriber who suggested 'TradeWatch' as the new service name. He receives three months free access to the service
Investment Advisors Using our Service
If you would like to be listed here, please contact us. As a service to those who support us, there is no additional charge to be listed here.
TradeRight Securities, located in a suburb of Chicago, is a full services investment management company and broker/dealer. They have been a subscriber, and user, of BreakoutWatch.com for some time now. They practice CANTATA and use Breakoutwatch.com as a “research analyst”. You can learn more about TradeRight Securities at: www.traderightsecurities.com. If you’re interested in speaking to a representative, simply call them toll-free at 1-800-308-3938 or e-mail email@example.com.
|Market Summary||Overview of market direction and industry rotation|
|Weekly Breakout Report||How confirmed breakouts performed this week|
2This represents the return if each stock were bought at its breakout price and sold at its intraday high.
3This represents the return if each stock were bought at its breakout price and sold at the most recent close.
|Top Breakout Choices||Stocks on our Cup-and-Handle list with best expected gain if they breakout|
|Top Second Chances||Stocks that broke out this week and are still in buyable range|
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