The markets rallied strongly on Friday after the news that Tim Geithner would become Treasury Secretary. We can hope that the rally continues into next week as the rest of the Obama economics team is announced. At least Geithner already has an influential job as President of the New York Fed and can therefore have a strong influence on policy makers during the interregnum. Whether or not that influence will be positive remains to be seen. As a member of the Troika (Paulson, Bernanke and Geithner) that have been in charge of managing the fiasco so far I doubt this is change we can believe in. That aside, perception is all important in restoring confidence, so we must hope that the perception in the markets will continue to be that he is someone who can make a positive difference.

Before Friday's rally the markets set a new low and the trend of lower lows and lower highs continues as the markets continue to search for a bottom. A money manager I respect told me "My take is that after the hedge funds are finished their forced selling, hopefully by mid December, the selling pressure will be off and some sideline money will come back into the market." He thinks money will rotate into deep value stocks (but he's a value investor) and the ensuing short squeeze will force hedge funds to cover their shorts providing a massive rally. There is certainly money on the sidelines nervous that it will miss the rapid upswing, and many shorts afraid of being squeezed, as demonstrated by the intraday moves of 10-14% recently. AAII data shows that individual investors have reduced their allocations to stocks to well below the 60% long term mean and when that money comes flooding back we are likely to see many breakouts move rapidly to the upside.

When the turnaround comes, breakouts are most likely to come from our head and shoulders bottom list on which there are 43 candidates currently. If Friday's rally continues on Monday we can expect to see many of these stocks attempt a breakout giving good opportunities for day and swing traders early next week.

Over Friday night we introduced a new feature that allows subscribers to set an 'Entry Page'. Once set, subscribers will be taken automatically to the entry page without the need to login when they go to http://www.breakoutwatch.com

Coincident with the release of this feature we are introducing a new home page which is primarily aimed at site 'visitors'. The new 'Entry Page' feature allows subscribers to bypass the new home page and get straight to the information they find most useful. There is also a slightly modified menu structure with fewer first level choices.

Subscribers, including Trial users, should ensure that they visit http://www.breakoutwatch.com when they wish to access the site. So please make sure this is the only bookmark you use. The first time you visit that page you will see the new homepage. You should click the 'Login' button and you will then see a new login form:

• provide your username and password.
• select an entry page (if you do not, the Market Analysis page will be your entry page by default)
• check the 'remember' box.

You only need to do this once and thereafter when you go to http://www.breakoutwatch.com you will be logged in automatically.

If you wish to change your entry page, you can do so from the Update Account menu. This is now located under Support > Account Management > Update Account. 

When you navigate there you will see a drop down menu allowing you to reset the Entry Page.

Navigation Menu Changes

We have reorganized the navigation menu so the choices focus on the principle services we provide. If you have difficulty finding what you are looking for in the new structure please look at the site map, which is under the Support menu.

Please post any questions/problems or suggestions about the new structure to the support forum.

No tip this week.