Weekly Newsletter 06/30/12
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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  

NASDAQ is still range bound between support and resistance. Until this is resolved expect a continuation of choppy,directionless trading. 

The NASDAQ Composite staged a strong rally on Friday in response to actions taken at the European Union to provide support directly to banks rather than to the sovereign countries in trouble. Peter Bookvar at The Big Picture emphasises that the underlying problems are not resolved:

"The EU has decided to create TCRP, the Troubled Country Relief Program, their offshoot of our Troubled Asset Relief Program. They will do this by giving the ESM and EFSF the ability to inject money directly into banks (voila, Spain just cut their debt by 100b euros after seeing it go up by that amount a few weeks ago) instead of via countries first with unanimous consent from all EU members and with a central bank supervisor. The financial help will also be pari passu with other bondholders instead of senior and countries of banks getting help won’t experience the same EU fiscal scrutiny as before. This news is most positive for Spain and Ireland whose failed banks became the noose around the sovereign as opposed to Italy and Greece where the debt pile up was at the government level. The next question is whether the ESM/EFSF will have enough capital and assuming they don’t, will the ECB chip in by giving it a bank license thus leveraging its size. That is yet to be determined. For now, party on and turn that hour glass over as more time has been bought but only the symptoms are being fought as the underlying disease of excessive debt and lack of growth still remains.

We can expect that when this is absorbed by the markets there could be a pull-back from Friday's exuberance. The index is now above the H&S Bottom neckline we described last week (a bullish sign) but faces resistance at 2942 should it attempt to go higher on Monday. With the 4th July holiday falling on Wednesday, next week will likely see reduced trading volume and consequently fewer breakouts.

NASDAQ Composite

I shall be travelling on 4th July to Australia, but I wish you all a safe and happy holiday.

 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

I am taking a vacation until mid-July. This feature will return on July 20.

 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
I am taking a vacation until mid-July. This feature will return on July 20.Dow 12880.1 1.89% 5.42% Down
NASDAQ 2935.05 1.47% 12.66% Down
S&P 500 1362.16 2.03% 8.31% Up
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
Russell 2000
3.01 %
Dow Jones
-5.06 %
NASDAQ Composite
12.66 %
NASDAQ Composite
12.66 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Building Materials Wholesale Building Materials Wholesale Building Materials Wholesale Recreational Vehicles
 Most Improved Industry (by change in technical rank2)
Beverages - Wineries & Distillers
+ 31
Publishing - Books
+ 83
Major Airlines
+ 160
Dairy Products
+ 167
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 26 12.54 4.15% 3.16%
Last Week 17 11.69 8% 4.93%
13 Weeks 222 13.69 6.29%
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 XNPT XenoPort, Inc. 113
Top Technical XNPT XenoPort, Inc. 113
Top Fundamental GEOI GeoResources, Inc. 45
Top Tech. & Fund. GEOI GeoResources, Inc. 45
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. 65
Top Technical SBAC SBA Communications Corporation 32
Top Fundamental TGH Textainer Group Holdings Limited 49
Top Tech. & Fund. MRLN Marlin Business Services Corp. 54
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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