Weekly Newsletter 07/02/10
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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  
Firstly, we wish all our readers a happy and safe 4th of July weekend and hope that the market blues won't spoil your party.

For market blues there are a plenty as we see that the major indexes all lost heavily this week.  We pointed to the beginning of a major correction on May 1 when we noted the NASDAQ Composite had completed a head and shoulders top and it was joined this week by the S&P 500 (see chart). In addition, our market trend indicator for the S&P 500 turned south on Thursday and the 50 day moving average is crossing the 200 day moving average at Friday's close.

S&P 500

As regular readers know, the head and shoulders top is a bearish pattern, and one of the more reliable ones. The pattern suggests that the S&P 500 could fall a further 160 or so points to around the 900 level. We get this estimate by taking the drop from the head to the neckline and then subtracting it from the point where the neckline crosses the closing price line. This would be a 26% correction from the high of 1219 and place us well into bear market territory.
 New Features this Week Additional Value that we added this week
No new features, but we did correct a couple of bugs.

1. Under certain circumstances, the menu was disappearing and that has been corrected.
2. Related to the same bug, the watchlist displays were sometimes reverting to the old display and filter values were apparently disappearing. That is also fixed.
This Week's Top Tip Tips for getting the most out of our site
This feature will return next week.
 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 9686.48 -4.51% -7.11% Up
NASDAQ 2091.79 -5.92% -7.82% Down
S&P 500 1022.58 -5.03% -8.3% Down
Russell 2000 598.97 -7.15% -5.54% Down
Wilshire 5000 10654.1 -5.32% -7.34% Up
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
Dow Jones
-4.51 %
Dow Jones
-14.14 %
Russell 2000
-6.43 %
Russell 2000
-5.54 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Specialty Eateries Specialty Eateries Toy & Hobby Stores Housewares & Accessories
 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 4 9.31 3.55% 1.22%
Last Week 10 9.08 5.27% -3.66%
13 Weeks 137 9.77 12.48%
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 AEZ American Oil & Gas Inc. 111
Top Technical GRNB Green Bankshares, Inc. 61
Top Fundamental NGLS Targa Resources Partners LP 47
Top Tech. & Fund. SWKS Skyworks Solutions Inc. 61
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 LOOP LoopNet, Inc. 64
Top Technical LOOP LoopNet, Inc. 64
Top Fundamental VGR Vector Group Ltd. 46
Top Tech. & Fund. LOOP LoopNet, Inc. 64
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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