Weekly Newsletter 11/26/10
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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  

I hope you are all enjoying a safe and restful Thanksgiving weekend. I certainly am so the newsletter is fairly short today.

The NASDAQ Composite is in a symmetrical triangle pattern. This means that the resistance line is descending while the support line is rising, at approximately equal rates. The probable outcomes from this pattern are equally weighted to the upside and downside, so we must wait for a breakout above the resistance trend or below the support trend on heavy volume before we can know the outcome. That said, I think the probabilities are that we will continue to move higher consistent with our trend model, and the rising 50 and 200 day moving averages. Also, the NASDAQ Composite and Russell 2000, from where the majority of successful breakouts come, are not weighed down by banking stocks and other large cap companies that will suffer from a downturn in the global outlook. This is evident in the NASDAQ and Russell 2000 being positive for the week while the larger cap indexes went south. All bets are off, however, if  there's a flare up on the Korean Peninsular or Portugal and then Spain require a bailout.

NASDAQ Composite

On the domestic front, though, things are looking brighter. Third quarter GDP was revised upwards to 2.5% annual from 2.0% (its still anemic but the trend is in the right direction), new jobless claims fell sharply, consumers earned more, spent more, and saved more in October and consumer confidence is improving. Unfortunately, the housing market is still deteriorating and durable goods orders also declined.

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 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
This feature will return next week.
 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 11092 -1% 6.37% Up
NASDAQ 2534.56 0.65% 11.7% Up
S&P 500 1189.4 -0.86% 6.66% Up
Russell 2000 732.73 1.16% 15.56% Up
Wilshire 5000 12560.4 -0.48% 9.24% Up
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
Russell 2000
1.16 %
Russell 2000
17.69 %
NASDAQ Composite
12.3 %
Russell 2000
15.56 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Silver Silver Beverages - Brewers Beverages - Brewers
 Most Improved Industry (by change in technical rank2)
Internet Service Providers
+ 85
Sporting Goods Stores
+ 87
Wholesale - Other
+ 154
Long Distance Carriers
+ 198
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 6 28.08 6.69% 5.38%
Last Week 20 28.15 4.47% 1.88%
13 Weeks 397 28.92 17.02%
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 MALL PC Mall, Inc. 120
Top Technical WWWW Web.com Group, Inc. 95
Top Fundamental TPX Tempur-Pedic International Inc. 51
Top Tech. & Fund. TPX Tempur-Pedic International Inc. 51
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 LBAI Lakeland Bancorp, Inc. 74
Top Technical LBAI Lakeland Bancorp, Inc. 74
Top Fundamental ANF Abercrombie & Fitch Co. 47
Top Tech. & Fund. ANF Abercrombie & Fitch Co. 47
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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