Weekly Newsletter 08/26/11
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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  

The major indexes made strong gains with the more volatile NASDAQ Composite and Russell 2000 out pacing the large cap indexes. Volumes have come down from their extraordinarily high levels of three weeks ago but were below the 50 day average this week indicating that support for the rally is weak.

As the chart shows, the NASDAQ formed a double bottom and needs to rise above resistance at 2555 before the chart turns bullish.

NASDAQ Composite

While some may think this is a buying opportunity, for the most part, stocks are well below their breakout levels for our long position watchlists. It is therefore not surprising that although the gains this week have been strong, only eight stocks could make our confirmed breakout list.

While upside breakouts were scarce, breakdowns were even scarcer with just five breakdowns being confirmed.
 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

Best to keep your powder dry until a positive, or clearly negative, trend establishes itself.

Hat tip Abstruse Goose
 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 11284.5 4.32% -2.53% Up
NASDAQ 2479.85 5.89% -6.52% Down
S&P 500 1176.8 4.74% -6.43% Down
Russell 2000 691.79 6.15% -11.72% Down
Wilshire 5000 12313.8 4.95% -7.35% Down
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
Russell 2000
6.15 %
Dow Jones
-9.3 %
Dow Jones
-6.97 %
Dow Jones
-2.53 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Personal Computers Personal Computers Personal Computers Cigarettes
 Most Improved Industry (by change in technical rank2)
Industrial Equipment Wholesale
+ 55
Auto Parts Wholesale
+ 74
Agricultural Chemicals
+ 154
Closed-End Fund - Debt
+ 194
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 8 11.92 2.93% 0.79%
Last Week 6 12.15 5.27% -3.68%
13 Weeks 281 12.77 6.34%
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 NSU Nevsun Resources (USA)   102
Top Technical TMF Direxion Daily 30-Yr Trsry Bull 3X Shrs   42
Top Fundamental HANS Hansen Natural Corporation   40
Top Tech. & Fund. HANS Hansen Natural Corporation   40
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 RIC Richmont Mines Inc. (USA)   83
Top Technical RLRN Renaissance Learning, Inc.   56
Top Fundamental ITC ITC Holdings Corp.   30
Top Tech. & Fund. RIC Richmont Mines Inc. (USA)   83
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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