Weekly Newsletter 02/20/09
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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  

Over the past few weeks we have drawn attention to the bearish descending triangle pattern for the NASDAQ Composite. We have done so for two reasons: traditionally, the NASDAQ has been the best place to look for CAN SLIM style stocks and the NASDAQ has also been the best performing index of the year so far. Last week's newsletter was entitled 'Bearish outcome for the NASDAQ more likely' and this week we saw the index lose another 6% and breakdown below the lower triangle bound.

NASDAQ Composite

The DJI has already fallen below its low of last November and we expect the other indexes, including the NASDAQ to test their November lows also. However, technical analysis is of marginal value when there could be another Government intervention at any time.

Overall, this was a devastating week for the markets, culminating in much higher volume on Friday which provoked some speculation that Friday was the 'capitulation' day. We think not, and that the markets still have some way to go before we bottom.

 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
No tip this week.
 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 7365.67 -6.17% -16.07% Down
NASDAQ 1441.23 -6.07% -8.61% Down
S&P 500 770.05 -6.87% -14.75% Down
Russell 2000 410.96 -8.34% -17.72% Down
Wilshire 5000 7802.27 -6.96% -14.14% Down
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
NASDAQ Composite
-6.07 %
NASDAQ Composite
-8.46 %
Dow Jones
-36.66 %
NASDAQ Composite
-8.61 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Home Health Care Diversified Utilities Diversified Utilities 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 12 9.54 3.48% 1.35%
Last Week 6 9.08 7.35% 4.35%
13 Weeks 109 9.69 14.61%
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 SWIM thinkorswim Group Inc. 105
Top Technical IWOV Interwoven Inc 50
Top Fundamental GMCR Green Mountain Coffee Roasters 62
Top Tech. & Fund. GMCR Green Mountain Coffee Roasters 62
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 BJRI BJ's Restaurants Inc 81
Top Technical HMSY Hms Holdings Corp 48
Top Fundamental ICUI Icu Medical Inc 52
Top Tech. & Fund. HMSY Hms Holdings Corp 48
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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