Weekly Newsletter 03/20/09
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  

GOLD broke out on Friday following a 27% run up in the last three days as the dollar fell following the announcement that the Fed will add another $1 trillion to its balance sheet. Wall Street greeted the plan to buy mortgages and long term treasuries to force down long term interest rates with enthusiasm on Wednesday but profit taking brought a halt to the rally on Thursday and Friday.


A look at the NASDAQ chart shows how the index has respected the medium term trend line over the last 6 months and again turned down as it approached that line this week. The 2-standard deviation Bollinger Band (we show both 1 and 2-sd bands) has also proven to be a reliable indicator of turning points over that period.


The markets could turn up again on Monday when Treasury Secretary Geithner is expected to announce the details of the public-private partnership plan that he failed to provide details of a month ago. According to the New York Times, the plan has three main elements:

In one, the Federal Deposit Insurance Corporation will set up special-purpose investment partnerships and lend about 85 percent of the money that those partnerships will need to buy up troubled assets that banks want to sell.

In the second, the Treasury will hire four or five investment management firms, matching the private money that each of the firms puts up on a dollar-for-dollar basis with government money.

In the third piece, the Treasury plans to expand lending through the Term Asset-Backed Secure Lending Facility, a joint venture with the Federal Reserve.

The most vexing aspect of this plan and in previous incarnations of the TARP has been how to price the troubled assets. The solution to be proposed is an auction in the expectation that competitive bidding will provide some protection to the taxpayer who is funding 85% of the plan. I expect that Wall Street will like the plan because it will get the assets off the banks books, but main street will hate it because of the extra burden on taxpayers, present and future. If I'm right,then we should see another significant rally in the financials next week.

 New Features this Week Additional Value that we added this week

New Industry Ranking Format

We've updated our industry analysis page to be consistent with the format adopted for our watchlist pages. The display no longer relies on Java which allows us to avoid using a pop-up window, which was always confusing for new subscribers, while still retaining the ability to sort columns to find the most improved industries.

This Week's Top Tip Tips for getting the most out of our site

The industry ranking page provides an easy way to find the best (and worst) performing industries on a daily basis, as well as over longer periods up to a year.

From the industry ranking page you are just one click away from seeing a list of stocks in the industry ranked by RS rank. Our RS Rank metric has proven to be the most important indicator of potential future performance.

 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 7278.38 0.75% -17.07% Down
NASDAQ 1457.27 1.8% -7.59% Down
S&P 500 768.54 1.58% -14.91% Down
Russell 2000 400.11 1.79% -19.89% Down
Wilshire 5000 7801.33 1.63% -14.15% Down
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
NASDAQ Composite
1.8 %
NASDAQ Composite
-6.84 %
NASDAQ Composite
-35.91 %
NASDAQ Composite
-7.59 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Auto Parts Stores Auto Parts Stores Education & Training Services Cigarettes
 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 9.62 4.68% 1.01%
Last Week 8 9.69 11.02% 4.53%
13 Weeks 110 10.08 16.04%
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
Top Technical OKN OCEANAUT, INC 70
Top Fundamental TNDM Neutral Tandem 42
Top Tech. & Fund. TNDM Neutral Tandem 42
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 EHTH Ehealth Inc 64
Top Technical GOLD Randgold Resources Ltd Ads 1:2 50
Top Fundamental RHB Rehabcare Group Inc 61
Top Tech. & Fund. RHB Rehabcare Group Inc 61
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.