Breakoutwatch Weekly Summary 10/29/16

You are receiving this email because you are or were a subscriber, or have subscribed to our weekly newsletter. This newsletter summarizes the breakout events of the week and provides additional guidance that does not fit into our daily format. It is published each weekend.

New Features this Week
Strategy Suggestions
Breakouts Summary
Breakouts Detail
Top Cup and Handle Chart Pattern Stocks
Breakouts Index
Major Indexes Performance
Best Performing Index
Best Performing Industry
Most Improved Industry

Weekly Commentary
Dangers in Going Long Increase as Trends Continue Down and Election Uncertainty Mounts

Our trend indicators continue to point down and our research shows that going long carries more risk when that occurs. Our Cup and Handle Pattern backtest tool confirms that this is the case (more below).

Compounding the danger now is the latest uncertainty about the election outcome introduced by FBI Director Comey on Friday. The markets reacted negatively and we will likely see more volatility as more rumors and contradictory statements emerge in the coming days. Wikileaks may have more disclosures to come and I expect more evidence of Trump's misogyny will emerge..This October likely has more surprises in store!


New Features this Week

No new features this week.

Strategy Suggestions
Do Not Go Long When Trends Signals are Down

The two charts below from our cup and handle backtest tool illustrate why you should not open new long positions when our trend indicators are down. The top chart shows simulated returns when not opening new positions when the NASDAQ indicator is down and the bottom when that rule is not in force. You can see that  returns are dramatically different. The shaded green bands show the times when the NASDAQ trend was down.

market trend comparison
Breakouts Summary by Watchlist for Week Beginning 10/24/16
List Breakouts Avg. Gain
SQZ 5 1.37
Breakouts Detail for Week Beginning 10/24/16
Brkout Date Symbol Base Squeeze BrkoutOut Price Brkout Day Close RS Rank* Last Close Current % off BOP Gain at Intraday High
2016-10-27 PLNT SQZ y 20.33 21 83 21.16 4.08% 8.95%
2016-10-28 PFG SQZ y 53.57 55 86 55.27 3.17% 5.13%
2016-10-28 LMAT SQZ y 21.12 22 94 21.58 2.18% 2.18%
2016-10-28 JPEP SQZ y 8.14 8 88 8.2 0.74% 3.69%
2016-10-26 GRMN SQZ y 49.52 50 87 47.87 -3.33% 7.67%
*RS Rank on day before breakout.
12 Month Successful Breakout History
breakout history
Top Rated Cup and Handle Stocks as of Friday October 28, 2016
Symbol BO
Company Industry RS
ALRM 30.00 367,791 Holdings - Inc. Application Software 95 29.28
PLOW 33.75 130,474 Douglas Dynamics - Inc. Auto Parts 93 31.60
KEYW 11.30 312,003 The KEYW Holding Corporation Application Software 93 10.46
EMKR 6.55 399,910 EMCORE Corporation Semiconductor - Integrated Circuits 92 6.45
These stocks meet our suggested screening factors for our Cup and Handle Chart Pattern watchlist.
See Revised Rules for Trading Cup and Handle Breakouts
Major Index Summary
Index Value Change Week Change YTD Trend1
Dow 18161.2
0.09% 4.22% Down
NASDAQ 5190.1
-1.28% 3.65% Down
S&P 500 2126.41
-0.69% 4.03% Down
1The Market Trend is derived from our proprietary market model. The market model is described on the sitehere.
2The site also shows industry rankings based on fundamentals, combined technical and fundamentals, and on price alone. The site also shows daily industry movements.
Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
Dow Jones NASDAQ Composite
0.54 %
NASDAQ Composite
8.68 %
Dow Jones
4.22 %
Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Computer Based Systems
Sporting Goods Stores
Most Improved Industry (by change in technical rank2)
Music & Video Stores
Basic Materials Wholesale
Nonmetallic Mineral Mining
Charts of each industry rank and performance over 12 months are available on the site


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