Weekly Newsletter 09/12/08
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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  
Any analysis of this weeks action will be superceded by events over the weekend. The WSJ reports that the Fed convened a meeting Friday evening of New York Fed President Timothy Geithner, Treasury Secretary Henry Paulson, Securities and Exchange Commission Chairman Christopher Cox, Morgan Stanley Chief Executive John Mack and Merrill Lynch Chief Executive John Thain, among others. By Monday morning we are likely to know the future of Lehman Brothers. I suspect they will be wholly or partially sold and the Fed will provide guarantees to some extent of the risky assets - a further example of socializing the losses after the riches were privatized.

It is also likely that there will be refinery closures in Texas that could impact gas prices in the short term.

 A resolution of the Lehman situation will likely be positive as the market hates uncertainty, while the refinery situation will have  a negative impact. The joint impact is unknowable but the longer term trend will continue downwards until the housing market has bottomed.

Resolution of the Lehman situation will put the focus on the next dominoes that are likely to fall - Washington Mutual and AIG.

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Our tip this week shows how to select breakouts that have gained over 40% even in this difficult market - don't miss it.

 New Features this Week Additional Value that we added this week
New Parameters for the BoW Filter

We have changed the BoW filter parameters to the simpler formula we have discussed recently. That is RS >= 95 and CEF >= 7.
This Week's Top Tip Tips for getting the most out of our site


This tip is no longer available.

 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Market1
Signal
Dow 11422 1.79% -13.89% enter
NASDAQ 2261.27 0.24% -14.74% exit
S&P 500 1251.69 0.76% -14.76% enter
Russell 2000 720.26 0.2% -5.97% N/A
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
Dow Jones
1.79 %
Russell 2000
-1.82 %
Russell 2000
8.65 %
Russell 2000
-5.97 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Long Distance Carriers Long Distance Carriers REIT - Healthcare Facilities REIT - Healthcare Facilities
 Most Improved Industry (by change in technical rank2)
Aluminum
+ 54
Aluminum
+ 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. 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 25 20.46 3.55% 0.37%
Last Week 12 19.08 4.62% -3.29%
13 Weeks 290 21 9.8%
-2.3%
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
Category
Symbol
Company Name
Expected Gain1
Best Overall JBLU Jetblue Airways Corp 106
Top Technical MCCC Mediacom Communication A 80
Top Fundamental EZPW Ezcorp Inc Cl A 53
Top Tech. & Fund. EZPW Ezcorp Inc Cl A 53
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
Category
Symbol
Company Name
Expected Gain1
Best Overall MGF Mfs Govt Mkt Income Tr 84
Top Technical MTH Meritage Homes Corp 59
Top Fundamental MASI MASIMO CORPORATION 37
Top Tech. & Fund. MASI MASIMO CORPORATION 37
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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