Weekly Newsletter 01/09/09
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  
After a promising start to the New Year our market model for small cap stocks, as represented in the Russell 2000, turned positive on Monday and remained so despite a loss of of almost 5% for the index for the week. The trend for the other indexes remains downward and perhaps the small cap stocks will reverse trend also in the near future as unemployment rises,  the outlook for earnings is getting weaker and there is increasing uncertainty about the size, content and date of a new stimulus package.

Unemployment rose to an official 7.2% but the real level of unemployment is likely much higher at 13% as the  unemployment data only counts those actively seeking work and excludes part-time workers who would like to work full time and those who have given up in discouragement. For 2008, the economy lost the most jobs since the end of the second world war. The Federal Reserve is forecasting that unemployment will continue to rise until 2010 meaning that consumer spending will continue to deteriorate as anxiety rises and saving increases.

Company earnings will continue to decline and weigh on stock prices. Bloomberg reports "Profits at S&P 500 companies probably dropped 20 percent last quarter and will slide 15 percent in the first quarter. So far, earnings at S&P 500 companies have fallen for five straight quarters, matching the longest streaks of declines on record. The slump is forecast to last until the middle of 2009. "

Finally, although the factors cited above imply that rationally the markets should continue to decline, we can expect a sudden change in sentiment when the stimulus package is finally announced which will give the market a boost. Sustaining that sentiment change will be a huge challenge for the new administration.
 New Features this Week Additional Value that we added this week
New Watchlist Format Enhanced
We added new functionality to our new watchlist format this week. The new format is under beta test for our Head and Shoulders Bottom watchlist and is accessible to all subscription levels including guests from our Mine for Candidates menu.

The new functionality includes filters which can be saved and reused when you return to the watchlist in the future and a download facility. We are working on linking these filters to email alerts and a backtest feature.

We would appreciate any and all comments you have on this new watchlist format.

New Stock and Mutual Fund Screening Tool

We have acquired the rights to use a powerful new tool from Zack's which allows you to screen for stocks and mutual funds against many technical and fundamental criteria.  

This tool is accessed from the Mine for Candidates menu and is free to all subscribers and guests. Please let us know if you find this tool useful
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 8599.18 -4.82% -2.02% Down
NASDAQ 1571.59 -3.71% -0.34% Down
S&P 500 890.35 -4.45% -1.43% Down
Russell 2000 481.3 -4.85% -3.63% Up
Wilshire 5000 8985.78 -4.04% -1.12% Down
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
NASDAQ Composite
-3.71 %
Dow Jones
1.75 %
Dow Jones
-22.56 %
NASDAQ Composite
-0.34 %
 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 Long Distance Carriers
 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 5 3.69 6.94% 1.25%
Last Week 10 3.38 7.23% -3.8%
13 Weeks 48 3.77 10.59%
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 MIG Meadowbrook Insurance Gr 120
Top Technical TOWN TOWNE BANK (VA) 55
Top Fundamental MYGN Myriad Genetics Inc 48
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 JBLU Jetblue Airways Corp 103
Top Technical JBLU Jetblue Airways Corp 103
Top Fundamental APSG Applied Signal Tech Inc 70
Top Tech. & Fund. APSG Applied Signal Tech Inc 70
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 © 2009 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.