Weekly Newsletter 03/24/13
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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  

Our market trend indicators all turned down at the end of the week, so it looks as though the markets are at last moving into consolidation mode after a stellar rise in the first three months of this year. The NASDAQ Composite formed a Head and  Shoulders Top pattern which is usually bearish. The normal  rule for assessing the expected decline from the  top is to measure the difference between the top and the neckline on the day of the top (dotted line). As you can see the H&S Top pattern is quite shallow and the index touched the target low according to this rule on Thursday, so we may already have seen the full extent of the correction. Note also that volume has been well below the 50 day average indicating falling momentum.

Our research shows that when our trend indicators turn negative, breakout performance suffers. You can confirm this using  our backtest tools by toggling the market indicators filter.

NASDAQ Composite

Server Upgrade Outcome

Our server upgrade last weekend was not successful as our real-time price  feed failed on Monday morning.  We quickly reverted operations to  our old server but because internet name servers can take over 24 hours to synchronize, some  of you experienced connection difficulties into Tuesday. In compensation, I have extended everyone's subscription by two days. We will try the upgrade again  this Friday as the markets are closed that day.

 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

This feature will return after the server upgrade in  two weeks.

 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 14512 -0.01% 10.74% Down
NASDAQ 3245 -0.13% 7.47% Down
S&P 500 1556.89 -0.24% 9.16% Down
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
Dow Jones
-0.01 %
Russell 2000
11.6 %
Russell 2000
10.61 %
Russell 2000
11.41 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Major Airlines Major Airlines Building Materials Wholesale Lumber - Wood Production
 Most Improved Industry (by change in technical rank2)
Entertainment - Diversified
+ 51
Auto Parts Wholesale
+ 124
Toy & Hobby Stores
+ 212
Toy & Hobby Stores
+ 214
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 13 18.62 2.79% 1.52%
Last Week 24 19.62 2.2% -0.92%
13 Weeks 268 20.62 12.41%
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 CRTX Cornerstone Therapeutics, Inc. 106
Top Technical CRTX Cornerstone Therapeutics, Inc. 106
Top Fundamental DGI DigitalGlobe Inc 46
Top Tech. & Fund. DGI DigitalGlobe Inc 46
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 RFIL RF Industries, Ltd. 101
Top Technical NYT The New York Times Company 61
Top Fundamental RFIL RF Industries, Ltd. 101
Top Tech. & Fund. RFIL RF Industries, Ltd. 101
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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