Weekly Newsletter 11/07/08
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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  

Although Friday's gains gave a little relief after the 10% losses of the previous two sessions, they came on light volume and as such did not convince us that the overall downward trend is broken. In fact, as the economic news worsens, not just in the US but around the world, it is becoming more and more certain that we are in for a prolonged and deep recession. If so, there are further gains to be made on the short side and very little to be gained by going long. As we show in this weeks Top Tip, our short side selections have been very successful and as a group have given much better returns than would have been obtained by shorting the major indexes alone.

Friday's unemployment figures were bad but because they count only those actively looking for work they do not count those who have given up or are on shorter work weeks. So the unemployment figures are actually much worse than the headline number suggests. Commentators on the News Hour Friday night estimated that the real unemployment rate is 11% and could grow to 15% in coming months. This will clearly be devastating to the economy and it is essential an effective stimulus package be enacted quickly. The market action on Friday indicates some investors are anticipating such a package and that regained confidence, when it is enacted, will lift the markets higher. We think there is more downside potential than upside.

 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

This tip is no longer available.

 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 8943.81 -4.09% -32.57% Down
NASDAQ 1647.4 -4.27% -37.89% Down
S&P 500 930.99 -3.9% -36.6% Down
Russell 2000 505.79 -4.17% -33.97% Down
Wilshire 5000 9358.26 -4.2% -33.97% Down
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
S&P 500
-3.9 %
Dow Jones
-31.12 %
Russell 2000
-29.76 %
Dow Jones
-32.57 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Long Distance Carriers Long Distance Carriers Long Distance Carriers REIT - Healthcare Facilities
 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. 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 4 15.15 4.95% -7.39%
Last Week 2 18.15 17.66% 7.09%
13 Weeks 205 18.46 12.88%
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 NPSP Nps Pharmaceuticals Inc 101
Top Fundamental BKE Buckle Inc 65
Top Tech. & Fund. GXDX GENOPTIX, INC. 37
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
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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