Weekly Newsletter 07/24/15
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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  

As foreseen in last week's newsletter, the roller coaster ride of the NASDAQ composite continued as the index pulled back from last week's new high. Although our trend indicators for the three major indexes remain positive, for now, that will change if the weakness continues on Monday. In general, the market's were disappointed with earnings results, particularly those of AAPL, which is heavily weighted in the S&P 500 and DJI.

Friday's new jobless claim number was the lowest since 1973 but that good news was overwhelmed by a fall in new home sales and a continued bear market in crude oil.
NASDAQ Composite Chart
 Weekly Breakout Report  

The number of breakouts fell to 37 following 59 last week. The biggest gain for the week came from ATTU which broke out from a Volatility Squeeze pattern to yield a gain of 10.6%. The biggest loser was BIIB (Biogen), which also broke out from a Volatility Squeeze but whose earnings results turned out to be a huge disappointment.
 
Breakouts for Week Beginning 07/20/15
Brkout Date Symbol Base Squeeze BrkoutOut Price Brkout Day Close RS Rank* Last Close Current % off BOP Gain at Intraday High
07/20/15 ALDX SQZ Y 8.98 9.69 83 9.68 7.80 18.37
07/22/15 MRNS CwH N 15.49 15.91 96 15.99 3.23 12.2
07/20/15 ATTU SQZ Y 13.90 14.31 96 15.37 10.58 10.58
07/20/15 FIX SQZ Y 23.42 23.63 93 24.87 6.19 8.88
07/23/15 UA CwH N 89.46 95.93 89 96.05 7.37 7.37
07/20/15 WIX CwH N 25.85 27.01 92 27.06 4.68 5.96
07/21/15 OC CwH N 43.10 43.15 80 43.81 1.65 5.85
07/22/15 ZOES SQZ Y 43.14 45.54 92 42.85 -0.67 5.7
07/23/15 VRX CwH N 240.79 253.84 95 251.92 4.62 5.42
07/22/15 FIX SQZ Y 24.22 25.45 94 24.87 2.68 5.28
07/21/15 MMI SQZ Y 48.52 49.93 96 50.73 4.55 4.55
07/22/15 BGFV SQZ Y 14.73 15.34 90 14.6 -0.88 4.14
07/24/15 JNPR SQZ Y 26.49 27.54 85 27.54 3.96 3.96
07/21/15 DHT CwH N 8.57 8.72 84 8.38 -2.22 3.85
07/23/15 GWRE CwH N 57.94 60.08 86 59.36 2.45 3.69
07/21/15 ABMD CwH N 72.90 75.58 98 73.1 0.27 3.68
07/21/15 STBA CwH N 31.48 31.94 83 31.46 -0.06 3.56
07/20/15 CUBA SQZ Y 10.04 10.39 81 10.04 0.00 3.49
07/23/15 TXMD SQZ Y 8.22 8.5 96 8.16 -0.73 3.41
07/20/15 ICUI SQZ Y 96.46 97.1 89 97.73 1.32 3.15
07/24/15 NPTN SQZ Y 8.98 9.22 98 9.22 2.67 2.67
07/24/15 UVE CwH N 27.39 28.09 95 28.09 2.56 2.56
07/23/15 COR CwH N 48.67 49.54 84 49.81 2.34 2.34
07/23/15 AFOP CwH N 21.29 21.73 86 21.16 -0.61 2.07
07/21/15 FFIN SQZ Y 35.34 35.52 88 34.33 -2.86 1.87
07/23/15 CAKE CwH Y 55.48 56.48 80 55.72 0.43 1.8
07/22/15 BJRI SQZ Y 49.58 50.35 83 49.89 0.63 1.55
07/22/15 BSX SQZ Y 17.77 18.02 86 17.36 -2.31 1.41
07/20/15 WSO DB N 125.47 127.04 84 123.44 -1.62 1.25
07/22/15 HFC CwH N 46.74 47.22 85 46.51 -0.49 1.03
07/22/15 ICUI SQZ Y 98.85 99.5 91 97.73 -1.13 0.66
07/21/15 CSGP CwH N 217.23 218.43 90 214.83 -1.10 0.55
07/23/15 HCSG CwH Y 34.75 34.93 80 34.39 -1.04 0.52
07/21/15 ARES SQZ Y 19.93 20.01 80 19.94 0.05 0.4
07/21/15 BIIB SQZ Y 408.71 409.5 80 300.03 -26.59 0.19
07/24/15 AMSG SQZ Y 70.39 70.49 90 70.49 0.14 0.14
07/23/15 AZZ SQZ Y 52.24 52.29 83 51.63 -1.17 0.1
Weekly Average (37 breakouts) 0.72 3.9
*RS Rank on day before breakout.

 
 New Features this Week Additional Value that we added this week

Cup and Handle Stocks Expected to Move Up

As reported last week, I have a new model that attempts to predict which cup and handle stocks will move up at the next session. This does not mean that they will necessarily break out, which requires that they close above their breakout price on 150% of average volume, only that there is high probability that they will close higher.

There is a new filter on the Cup and Handle watchlist which will select these stocks. This filter will not be used for filtering alerts, however. Alerts will continue to be sent only when stocks reach their breakout price.

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

Cup and Handle Stocks Expected to Move Up - New Motif

The model used to predict these stocks is still undergoing development but the back testing results reported last week I feel are good enough to make this filter available now.

It is important to understand that these results were obtained in aggregate since 2008. A prediction accuracy of 68% will not be achieved each day, week or even month. To provide a real world demonstration of how they will perform, I've established a Motif for these stocks. My plan is to re-balance the Motif each day by retaining stocks that moved up, dropping those that moved down, and adding new ones predicted to move up.

Below you will see the performance so far. As I only established the Motif a couple of days ago, and the market has been down since then, the performance so far is negative. Clicking the "VIEW MOTIF DETAILS" below will show  you the current stock holdings.

 
 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 17568.5 -2.86% -1.43% Up
NASDAQ 5088.63 -2.33% 7.44% Up
S&P 500 2079.65 -2.21% 1.01% Up
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
S&P 500
-2.21 %
NASDAQ Composite
-0.07 %
NASDAQ Composite
6.95 %
NASDAQ Composite
7.44 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Tobacco Products - Other Tobacco Products - Other Drug Stores Drugs Wholesale
 Most Improved Industry (by change in technical rank2)
Drug Related Products
+ 87
Publishing - Periodicals
+ 138
Tobacco Products - Other
+ 186
Tobacco Products - Other
+ 209
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.
 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 GLUU Glu Mobile Inc. 120
Top Technical GLUU Glu Mobile Inc. 120
Top Fundamental ANET Arista Networks, Inc. 34
Top Tech. & Fund. SCMP Sucampo Pharmaceuticals, Inc. 63
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 DHT DHT Holdings, Inc. 83
Top Technical MRNS Marinus Pharmaceuticals, Inc. 76
Top Fundamental UVE UNIVERSAL INSURANCE HOLDINGS INC 54
Top Tech. & Fund. UVE UNIVERSAL INSURANCE HOLDINGS INC 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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