Weekly Newsletter 05/26/13
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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 signals for the NASDAQ and S&P 500 turned negative on Thursday and for the DJI on Friday. The downturn followed the sharp fall in the major indexes on Wednesday following Fed Chairman Bernanke's comment to congress which left open the possibility that the Fed will withdraw its $US85 billion a month quantative easing program this year. Our NASDAQ chart shows a modest recovery on Thursday and Friday but the much weaker volume indicates support for the gains was tentative. Some consolidation was inevitable after the steep rise in the index since mid-April, so the sudden reversal is not necessarily an indication that a correction is at hand. It can be argued that the markets' reaction to Bernanke's comments was an overreaction as unemployment must fall substantially further before the Fed's mandate to maintain full employment is reached and the full impact of job cuts from sequestration is still to be felt.

Nevertheless, we always suggest caution in taking new positions when our market trend signals turn negative. Note that the number of breakouts fell below the 13 week average this week and overall gains were much more modest than in recent weeks.

NASDAQ Composite

 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

We wish all our subscribers a safe and enjoyable Memorial Day weekend.

 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 15303.1 -0.33% 16.78% Down
NASDAQ 3459.14 -1.14% 14.56% Down
S&P 500 1649.6 -0.99% 15.66% Down
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
Dow Jones
-0.33 %
NASDAQ Composite
9.3 %
Dow Jones
17.63 %
Dow Jones
16.78 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Toy & Hobby Stores Toy & Hobby Stores Toy & Hobby Stores Cement
 Most Improved Industry (by change in technical rank2)
Chemicals - Major Diversified
+ 63
Chemicals - Major Diversified
+ 82
Electronics Stores
+ 172
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 8 11.92 4.5% 2.03%
Last Week 10 11.77 4.98% 0.34%
13 Weeks 188 12.38 11.19%
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 HOV Hovnanian Enterprises, Inc. 105
Top Technical HOV Hovnanian Enterprises, Inc. 105
Top Fundamental RPXC RPX Corp 46
Top Tech. & Fund. ANFI Amira Nature Foods Ltd 65
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 TASR TASER International, Inc. 88
Top Technical AMBA Ambarella Inc 70
Top Fundamental AMBA Ambarella Inc 70
Top Tech. & Fund. AMBA Ambarella Inc 70
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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