Weekly Newsletter 08/07/09
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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  

Our market trend signals for the S&P 500 and Wilshire 5000 turned positive this week. These signals are conservative and while these indexes can still move down in the short term, we expect that the long term trend is now firmly in place.

The change in trend for these indexes is now consistent with the underlying mood of investors which is that the worst is behind us and that the seeds of a recovery are in place. This is evidenced by increasing volume as a result of money coming in from the sidelines and pushing prices higher. The five major indexes we track all set new highs for the year this week. The positive mood was reinforced on Friday when a surprise downturn in the unemployment rate stoked a strong rally.

While our large cap trend indicators are conservative, our NASDAQ trend signal picked the rally quite early. The NASDAQ signal turned positive on March 25 and has risen 34% since then.

Breakouts showed particular strength this week as the table below shows. Almost half of the breakouts for the week gained more than 5% with several showing truly outstanding gains.

Brkout Date Symbol Pattern BoP RS Rank Gain to Friday Close Intraday High
8/4/2009 HMIN CwH 17.81 88 41.72% 45.09%
8/5/2009 GNW CwH 7.25 95 20.14% 21.38%
8/6/2009 AGO CwH 15.39 85 14.10% 21.83%
8/5/2009 DTG HTF 17.96 99 13.92% 16.93%
8/4/2009 WMS CwH 37.69 82 12.50% 13.05%
8/7/2009 BKD CwH 13.63 89 8.51% 10.56%
8/4/2009 SVVS CwH 14.91 88 7.91% 10.80%
 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

How to Use our Site if You Cannot Monitor the Market in Real Time

Living in Hawaii, we would have to get up at 3:30 to monitor the markets in real time and take advantage of our alerts. We hate to do that so we developed our Tradewatch service to tell us which stocks to buy at next day's open (the 'Buy at Open' list, or set a buy order that would be executed during the day (the 'Buy on Breakout' list.

To see how these two watchlists have performed, you can use our Tradewatch simulation tool

Using the default parameters for the simulation since March 25, 2009 you can see that using the Buy on Breakout list together with our Sell Assistant would have returned 33.7%.

Tradewatch Simulation

 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 9370.07 2.16% 6.76% Down
NASDAQ 2000.25 1.1% 26.84% Up
S&P 500 1010.48 2.33% 11.87% Up
Russell 2000 572.4 2.82% 14.61% Up
Wilshire 5000 10416.2 2.65% 14.63% Up
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
Russell 2000
2.82 %
NASDAQ Composite
15.02 %
NASDAQ Composite
25.67 %
NASDAQ Composite
26.84 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Auto Dealerships Auto Dealerships Auto Parts Stores Auto Parts Stores
 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 19 14.77 12.48% 7.06%
Last Week 16 15.77 13.16% 6.51%
13 Weeks 188 16.92 23.99%
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 CKEC Carmike Cinemas 93
Top Fundamental NFLX Netflix Inc 49
Top Tech. & Fund. NFLX Netflix Inc 49
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
Top Technical DXCM DexCom Inc 110
Top Tech. & Fund. DXCM DexCom Inc 110
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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