Weekly Newsletter 11/04/11
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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  

It has been a difficult week with considerable uncertainty emanating from Europe and mixed economic signals from home. As I write this I see that the Greek PM has survived a no-confidence vote and pledged to form a unity Government. This is good for Europe but pity the poor Greeks who face extreme austerity measures.

While the attention has been mostly on Greece, it is really a sideshow compared with the problems facing Spain and Italy and it is up to the Italians in particular to take action. Unfortunately, the G-20 summit failed to produce extra financing for the European Financial Stability Fund which could potentially save the PIIGS bacon (excuse pun!).

So we can expect more volatility on US markets with no clear direction. Our trend signals are mixed with the larger cap indexes still trending down, because larger companies are the most coupled to the global economy, and the tech heavy NASDAQ and smaller cap Russell 2000 trending up. The NASDAQ Composite is wavering around its 200 day average and will likely continue to stutter-step higher with frequent setbacks.

Although we saw many fewer breakouts this week, they did comfortably beat the market averages with a positive close on average.

NASDAQ Composite
 New Features this Week Additional Value that we added this week

Not a new feature, but a new introductory home page. http://www.breakoutwatch.com/newWelcome.php.

We are transitioning the current home page to that one over the weekend. Subscribers who have their login and start page stored in a cookie, will not normally see this page as they will be taken directly to their start page when accessing the site.

This Week's Top Tip Tips for getting the most out of our site
Stock Trend Reversal Signals

We have adapted our TRS algorithm to work with individual stocks and are pleased to be able to present a beta-test version of this tool. It is accessed from the Evaluate > Analytical tools menu.

The tool is available to all subscribers and guests while in beta test. You can access it directly by clicking this link: Stock Trend Reversal Signals

We are still refining the tool, particularly the graphics, and hope to have an improved version for next weeks newsletter.

 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 11983.2 -2.03% 3.5% Down
NASDAQ 2686.15 -1.86% 1.25% Up
S&P 500 1253.23 -2.48% -0.35% Down
Russell 2000 746.49 -1.91% -4.74% Up
Wilshire 5000 13146.7 -2.28% -1.08% Down
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
NASDAQ Composite
-1.86 %
NASDAQ Composite
6.07 %
NASDAQ Composite
-5 %
Dow Jones
3.5 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Specialty Eateries Personal Computers Personal Computers Personal Computers
 Most Improved Industry (by change in technical rank2)
Surety & Title Insurance
+ 154
Toy & Hobby Stores
+ 131
Toy & Hobby Stores
+ 178
Toy & Hobby Stores
+ 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 27 16.38 5.72% 2.92%
Last Week 88 15.23 5.99% 0.95%
13 Weeks 230 17.38 8.11%
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 KOG Kodiak Oil & Gas Corp  129
Top Technical CONN CONN'S, Inc.  95
Top Fundamental HLF Herbalife Ltd.  47
Top Tech. & Fund. HLF Herbalife Ltd.  47
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 SPPI Spectrum Pharmaceuticals, Inc.  84
Top Technical SPPI Spectrum Pharmaceuticals, Inc.  84
Top Fundamental GNC GNC Holdings Inc  68
Top Tech. & Fund. GNC GNC Holdings Inc  68
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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