Weekly Newsletter 09/15/12
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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  
Subscription Rates Reduced 33% - see below

The FOMC delivered the expected QE3 and the markets rejoiced. The NASDAQ Composite broke out on Thursday to a new post 2000 high with an accumulation day volume that was 10% above the 50 day average and turned in another accumulation day on Friday. The rally had been building since Tuesday with successive accumulation days but note that none of them closed at their intraday high indicating there is still some nervousness and some traders want to reap their daily profits rather than let them ride.

Our equivolume charts are an excellent way to assess daily market performance as they simultaneously show price, volume, volume relative to the 50 day average and accumulation and distribution days.

Equivolume NASDAQ Chart

Despite this week's progress, our NASDAQ Trend indicator is still showing down and we discuss the reasons for this below.

The week produced 50 breakouts, with the greatest number coming from the CwH watchlist. The Flat Base pattern was also prominent as could be expected given the range-bounded performance of the lat three weeks. The CwH pattern produced the highest average gain at the week's close and also the highest intraday average. This is consistent with our historical preference for the CwH pattern.

B'out Date Symbol Base B'Out Price Last Close Current % off BOP *Gain at Intraday High
9/10/2012 CGI CwH 16.9 16.65 −1.48% 5.62%
9/10/2012 QUAD CwH 18.57 19.51 5.06% 7.11%
9/11/2012 DW CwH 29.48 29.75 0.92% 0.92%
9/11/2012 HRS CwH 47.55 50.52 6.25% 6.25%
9/11/2012 THO CwH 33.19 35.85 8.01% 8.01%
9/12/2012 CX CwH 8.15 8.37 2.70% 5.03%
9/13/2012 AREX CwH 32.65 34.61 6.00% 6.00%
9/13/2012 BBT CwH 32.94 33.99 3.19% 3.19%
9/13/2012 BC CwH 24.99 25.46 1.88% 1.88%
9/13/2012 BCOR CwH 16.5 17.7 7.27% 7.27%
9/13/2012 BXS CwH 15.32 15.57 1.63% 1.63%
9/13/2012 CIA CwH 10.27 10.78 4.97% 4.97%
9/13/2012 CSFL CwH 8.36 8.51 1.79% 2.03%
9/13/2012 DRN CwH 81.06 84.84 4.66% 4.66%
9/13/2012 EGP CwH 55.07 55.49 0.76% 0.87%
9/13/2012 ETM CwH 6.75 7.19 6.52% 6.52%
9/13/2012 FIO CwH 29.46 30.15 2.34% 2.34%
9/13/2012 FTK CwH 12.35 12.91 4.53% 4.53%
9/13/2012 GCA CwH 7.98 8.5 6.52% 6.52%
9/13/2012 GLDD CwH 7.71 7.8 1.17% 1.17%
9/13/2012 HCA CwH 29.35 31.16 6.17% 6.17%
9/13/2012 INXN CwH 19.94 20.17 1.15% 1.15%
9/13/2012 MHK CwH 75.05 78.92 5.16% 5.16%
9/13/2012 NXPI CwH 26.04 26.67 2.42% 2.42%
9/13/2012 PIR CwH 19.62 19.78 0.82% 0.82%
9/13/2012 PSS CwH 21.69 21.73 0.18% 0.18%
9/13/2012 QLD CwH 62.18 63.37 1.91% 1.91%
9/13/2012 TBBK CwH 9.9 10 1.01% 1.01%
9/13/2012 TQQQ CwH 62.74 64.45 2.73% 2.73%
9/13/2012 WFC CwH 35 36.13 3.23% 3.23%
9/13/2012 Z CwH 43.49 42.72 −1.77% 1.79%
9/14/2012 ATU CwH 29.93 30.09 0.53% 0.53%
9/14/2012 CSC CwH 33.96 34.68 2.12% 2.12%
9/14/2012 ECPG CwH 29.82 30.04 0.74% 0.74%
9/14/2012 EXAM CwH 13.94 14.07 0.93% 0.93%
9/14/2012 IRIS CwH 13.08 13.42 2.60% 2.60%
9/14/2012 PATK CwH 13.89 14.61 5.18% 5.18%
9/14/2012 WBC CwH 61.71 62.1 0.63% 0.63%
Average CwH Performance
2.91% 3.31%







9/13/2012 WST DB 48.83 49.41 1.19% 1.19%







9/11/2012 BMR FB 19.13 19.78 3.40% 3.40%
9/11/2012 V FB 131.15 134.25 2.36% 2.92%
9/12/2012 BAX FB 59.74 60.48 1.24% 1.72%
9/12/2012 BMR FB 19.23 19.78 2.86% 2.86%
9/12/2012 CCG FB 11.06 11.19 1.18% 1.99%
9/12/2012 N FB 57.95 62.86 8.47% 8.47%
9/12/2012 PGR FB 19.9 20.81 4.57% 4.57%
9/13/2012 CAF FB 19.05 19.36 1.63% 1.63%
9/13/2012 ICF FB 81.39 82.32 1.14% 1.14%
9/13/2012 VNQ FB 67.74 68.76 1.51% 1.51%
9/14/2012 SSS FB 57.62 57.72 0.17% 0.17%
Average Flat Base Performance
2.59% 2.76%

 New Features this Week Additional Value that we added this week

33% Subscription Reduction

We have introduced our own QE program with a reduction in subscription rates of 33% across the board, With the Fed's open ended commitment to almost free money, falling dollar prices and low bond yields, there is almost nowhere to invest other than the stock market so equities will inevitably move higher providing an excellent opportunity for nimble swing traders.

This Week's Top Tip Tips for getting the most out of our site

Breakoutwatch Trend Module

Successful trend models must avoid the whiplash that results from attempting to identify a change in trend too quickly. Our trend model waits for confirmation that a trend is established so there is always a lag between the market bottom being established (which can only be identified with hindsight) and a change in the trend signal.

Our trend model relies on improving prices, as recognized by a smoothed stochRSI indicator and improving volume as measured by a rising AccDis indicator.  The charts shows the NASDAQ closing prices for the last twelve months with the shaded areas representing the periods when the trend was up. You can see the model did pretty well with all 'Profit/Loss while Long' numbers being positive. Below the price chart are the smoothed stochRSI graphs and the AccDis indicator. You can see that the stochRSI is poised to cross the threshold at 40 and that the AccDis is trending up so we should get a trend reversal on Monday if the index makes another new high.

Because of the success of the trend model, we suggest you only go long when the trend is up and consider selling when the trend is down. Our 'Stock Timeliness Checkup' and 'Trend Reversal Signals' tools (under Evaluate > Analytic Tools) can help you with these decisions.

NASDAQ Trend Signals
 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 13593.4 2.16% 11.26% Up
NASDAQ 3183.95 1.52% 22.22% Down
S&P 500 1465.77 1.94% 16.55% Up
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
Russell 2000
2.66 %
Russell 2000
9.15 %
S&P 500
4.39 %
NASDAQ Composite
22.22 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Aerospace/Defense - Major Diversified Aerospace/Defense - Major Diversified Building Materials Wholesale Building Materials Wholesale
 Most Improved Industry (by change in technical rank2)
Silver
+ 55
Silver
+ 76
Publishing - Books
+ 137
Confectioners
+ 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 51 18.77 4.32% 2.76%
Last Week 39 15.92 7.93% 5.45%
13 Weeks 263 19.46 12.71%
9.07%
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
Category
Symbol
Company Name
Expected Gain1
Best Overall BXG Bluegreen Corporation 120
Top Technical BXG Bluegreen Corporation 120
Top Fundamental CAMP CalAmp Corp. 95
Top Tech. & Fund. CAMP CalAmp Corp. 95
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
Category
Symbol
Company Name
Expected Gain1
Best Overall TPLM Triangle Petroleum Corporation 109
Top Technical IRIS IRIS International, Inc. 62
Top Fundamental ECPG Encore Capital Group, Inc. 51
Top Tech. & Fund. ECPG Encore Capital Group, Inc. 51
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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