Weekly Newsletter 11/21/08
Login   Trial   Guest
You are receiving this email because you are or were a BreakoutWatch.com subscriber, or have subscribed to our weekly newsletter. This newsletter summarizes the breakout events of the week and provides additional guidance that does not fit into our daily format. It is published each weekend.
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  
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.
 New Features this Week Additional Value that we added this 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:

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. 

Account Update Menu

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.

This Week's Top Tip Tips for getting the most out of our site
No tip this week.
 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 8046.42 -5.31% -39.34% down
NASDAQ 1384.35 -8.74% -47.81% down
S&P 500 800.03 -8.39% -45.52% down
Russell 2000 406.54 -10.95% -46.93% down
Wilshire 5000 7926.05 -9.12% -46.52% down
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
Dow Jones
-5.31 %
Dow Jones
-30.8 %
Dow Jones
-35.52 %
Dow Jones
-39.34 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Home Health Care Home Health Care 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 3 13 0.64% -0.51%
Last Week 9 13.54 4.7% -5.54%
13 Weeks 187 13.69 13.35%
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 OCN Ocwen Financial Corp 103
Top Tech. & Fund. SHEN Shenandoah Telecomm 66
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
Best Overall CIA Citizens Inc 89
Top Technical PHLY Philadelphia Consolidated Holding Corp 46
Top Fundamental PHLY Philadelphia Consolidated Holding Corp 46
Top Tech. & Fund. PHLY Philadelphia Consolidated Holding Corp 46
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.

If you received this newsletter from a friend and you would like to receive it regularly please go to the BreakoutWatch.com site and enter as a Guest. You will then be able to register to receive the newsletter.

Copyright © 2008 NBIcharts, LLC dba BreakoutWatch.com. All rights reserved.
" BreakoutWatch," the BreakoutWatch.com "eye" logo, and the slogan "tomorrow's breakouts today" are service marks of NBIcharts LLC. All other marks are the property of their respective owners, and are used for descriptive purposes only.

BreakoutWatch is not affiliated with Investor's Business Daily or with Mr. William O'Neil. Our site, research and analysis is supported entirely by subscription and is free from advertising.

To unsubscribe from further breakoutwatch.com newsletters, please click here.