Weekly Newsletter 11/30/07
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Market Summary Weekly Breakout Report Top Breakout Choices Top 2nd Chances New Features Tip of the Week
Prior editions of this newsletter with our valuable Tips of the Week are available here.
 Weekly Commentary  

Market Summary

Although the markets made strong gains in the last four days, the S&P 500 met resistance at its 200 day average level on Friday. Had the index sustained itself above the 200 dma level, our market model would have given the green light to enter the markets again as the other requirements (an accumulation day at least four days into the rally, and a close at least 1.5% above the bottom) were met.

S&P 500 IntradayFriday's market action is illuminating because the trend throughtout the day, after an early bounce, was downward. The bounce was a response to statements by Fed Chairman Bernanke that implied further interest rate cuts to come, and news that Treasury Secretary Paulson was organizing the major banks to freeze the resetting of ARMs. The trend lower implied profit taking with the implicit recognition that the early morning levels were unsustainable.

A look at the six-month S&P 500 chart shows that rallies to the 200 dma level have failed twice so far this month so we are waiting for a breakthrough of that level before being convinced that this rally is sustainable.

S&P 500

There were just 8 successful breakouts this week as stocks must struggle back to within range of their pivot levels before a breakout can occur. If the current rally is sustained, then we can expect more successful breakouts to come.


 New Features this Week Additional Value that we added this week

No new features this week.

This Week's Top Tip Tips for getting the most out of our site

Unilateral Pairs Update

Some subscribers have expressed interest in our Unilateral Pairs Trading Tool (see the support forum) but time constraints have prevented us from developing this further and the correlations and volatilities had not been updated since the tool was first made available in August.

The correlations and volatilities have now been updated and we will continue to maintain that data each weekend as part of our weekly data revisions.

Investment Advisors Using our Service

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 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Market1
Dow 12958.4 -0.17% 3.97% enter
NASDAQ 2580.8 -0.61% 6.85% enter
S&P 500 1428.23 -0.87% 0.7% exit
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
Dow Jones
-0.4 %
Dow Jones
-2.01 %
Dow Jones
-4.49 %
NASDAQ Composite
6.85 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Personal Computers Personal Computers Air Services, Other Air Services, Other
 Most Improved Industry (by change in technical rank2)
+ 54
+ 99
Long Distance Carriers
+ 213
Long Distance Carriers
+ 210
Charts of each industry rank and performance over 12 months are available on the site

1The Market Signal is derived from our proprietary market model. The market model is described on the site.
2The site also shows industry rankings based on fundamentals, combined technical and fundamentals, and on price alone (similar to IBD). The site also shows daily industry movements.
 Weekly Breakout Report How confirmed breakouts performed this week
# of Breakouts
Period Average1
Max. Gain During Period2
Gain at Period Close3
This Week 5 15.62 1.99% 1.45%
Last Week 6 15.54 3.22% 0.9%
13 Weeks 213 15.92 17.85%
Breakout Count for Week
Electronic Equipment
Cleaning Products
Closed-End Fund - Equity
Closed-End Fund - Debt
Pollution & Treatment Controls
1The average number of breakouts in each week over the previous 13 weeks.
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
Company Name
Expected Gain1
Best Overall OSTE Osteotech Inc 89
Top Technical AMPL Ampal-Amer Israel Cl A 77
Top Fundamental AOB American Oriental Bioengineering Inc 68
Top Tech. & Fund. BCPC BALCHEM CP 45
1This is the gain predicted by our Expected Gain model if the stock breaks out. Expected Gains for all cup-and-handle stocks are published on our site.
 Top Second Chances Stocks that broke out this week and are still in buyable range
Company Name
Expected Gain1
Top Technical DCI Donaldson Co Inc 0
Top Fundamental CHD Church & Dwight Co Inc 22
Top Tech. & Fund. CHD Church & Dwight Co Inc 22
1This is the gain predicted by our Expected Gain model after the stock has broken out which uses the volume on breakout as a predictive term. Because the model variance is +/- 38% the expectation can be negative.

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