Weekly Newsletter 09/07/12
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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  

The NASDAQ Composite broke out of its three week long flat base pattern on Thursday on volume 30% above the 50 day average. The breakout continued on Friday when the index threatened to set a new 10 year high but profit taking left it just short of that goal. Our trend indicator still shows the index trending down but this is likely to change on Monday if the current resistance level is broken.

On the assumption that this rally comes on the back of the ECB's decision to engage in their own quantitative easing, and that Friday's dismal jobs report increases the likelihood that Fed Chairman Bernanke will unleash the helicopters, then the prospects for a continuing rally seem good. The FOMC meets this week and the markets will nervously await Thursday's announcement. Even if you don't buy this assumption, and prefer Barry Ritholz's explanation that it is underinvested, underperforming pro's that are driving the rally, it really doesn't matter because the markets are moving higher.

NASDAQ Composite

The number of breakouts jumped to 38 this week, well above the recent average of 16. Gains were modest although only 3 of the 38 were underwater at the week's close, and then only by less than 3% . The average gain of 3.6% at week's end was well above the gains of the individual indexes.

 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

No top tip this week.

 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 13306.6 1.65% 8.91% Up
NASDAQ 3136.42 2.26% 20.39% Down
S&P 500 1437.92 2.23% 14.34% Up
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
Russell 2000
3.75 %
NASDAQ Composite
9.73 %
NASDAQ Composite
4.96 %
NASDAQ Composite
20.39 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Confectioners Aerospace/Defense - Major Diversified Building Materials Wholesale Building Materials Wholesale
 Most Improved Industry (by change in technical rank2)
Movie Production - Theaters
+ 71
Jewelry Stores
+ 55
Home Health Care
+ 125
+ 186
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 38 15.92 4.95% 3.55%
Last Week 15 14.38 7.59% 5.49%
13 Weeks 224 17.23 13.11%
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 ANW Aegean Marine Petroleum Network Inc. 106
Top Technical ANW Aegean Marine Petroleum Network Inc. 106
Top Fundamental CAMP CalAmp Corp. 92
Top Tech. & Fund. CAMP CalAmp Corp. 92
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 LSI LSI Corporation 92
Top Technical MTSC MTS Systems Corporation 52
Top Fundamental HEES H&E Equipment Services, Inc. 63
Top Tech. & Fund. HEES H&E Equipment Services, Inc. 63
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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