| Market Summary | Weekly Breakout Report | Top Breakout Choices | Top 2nd Chances | New Features | Tip of the Week |
Market Summary
NASDAQ in Confirmed Rally
The NASDAQ Composite index closed above its 200 day moving average on Thursday and we are now declaring the NASDAQ to be in a confirmed rally. The NASDAQ index has risen 13% from its July low and some would say that we should have called the confirmed rally sooner but our market model, backtested to the opening of the NASDAQ exchange in 1984, stubbornly refuses to believe a rally has legs unless the index is above the 200 dma level. Additionally, the model also requires that the day of confirmation should be an accumulation day (which Thursday was not) but we are overriding the model on this occasion as we think there are sufficient reasons to do so:
- The weekly PSAR value (the * above or below the candlesticks on the chart below) has switched from a sell to a buy indicator. In our backtesting we have found the weekly PSAR to be a much more reliable indicator than the daily PSAR
- This was the fifth consecutive positive week for the index.
- The index is trading between the 1 and 2 standard deviation Bollinger Bands indicating strength but that it is not yet over extended.
- The average volume trend is up although we would have liked to see volume this week at or above the moving average.
- Oil has fallen 23% from its July 11 high which will lift consumer confidence and a rising dollar will continue to lower inflationary pressure.
While
the NASDAQ's upside move is welcome we continue to be more impressed
with the Russell 2000 which continues to provide the majority of breakouts.
The Russell 2000 index retreated from its resistance level this week,
but the volume level was maintained above the 50 day moving average. We
can expect the Russell to test resistance again next week.
In contrast, large cap stocks represented by the DJI and S&P 500 are looking sickly and should mostly be avoided. The DJI fell this week while the S&P 500 managed only a meagre gain (see Market Summary table below).
Despite the promising technical features of the charts, falling commodity prices and a rising dollar, the geopolitical threats to this picture will throw everything into reverse if the war in Georgia threatens oil and gas supplies to Europe.
In contrast, large cap stocks represented by the DJI and S&P 500 are looking sickly and should mostly be avoided. The DJI fell this week while the S&P 500 managed only a meagre gain (see Market Summary table below).
Despite the promising technical features of the charts, falling commodity prices and a rising dollar, the geopolitical threats to this picture will throw everything into reverse if the war in Georgia threatens oil and gas supplies to Europe.
We extended
our performance reporting beyond the cup-with-handle pattern this wee
to include the other long position watchlists.
Clicking Monitor > Performance on the navigation sidebar now provides options for Cup-with-Handle, Double Bottom, Head and Shoulders Bottom and Flat Base.
Clicking Monitor > Performance on the navigation sidebar now provides options for Cup-with-Handle, Double Bottom, Head and Shoulders Bottom and Flat Base.
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| Index | Value | Change Week | Change YTD | Market1 Signal |
||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dow | 11659.9 | -0.63% | -12.1% | enter | ||||||||||||||||||||||||||||||||||||
| NASDAQ | 2452.52 | 1.59% | -7.53% | enter | ||||||||||||||||||||||||||||||||||||
| S&P 500 | 1298.19 | 0.15% | -11.59% | enter | ||||||||||||||||||||||||||||||||||||
| Russell 2000 | 753.37 | 2.6% | -1.65% | N/A | ||||||||||||||||||||||||||||||||||||
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 (similar to IBD). The site also shows daily industry movements. |
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# of Breakouts |
Period Average1 |
Max. Gain During Period2 |
Gain at Period Close3 |
|
|---|---|---|---|---|
| This Week | 24 | 21.62 | 4.2% | 1.25% |
| Last Week | 56 | 22.77 | 8.6% | 3.8% |
| 13 Weeks | 309 | 24.62 | 10.91% |
-0.06% |
Sector |
Industry |
Breakout Count for Week |
|---|---|---|
DIVERSIFIED SERVICES |
Staffing & Outsourcing Services |
2 |
DIVERSIFIED SERVICES |
Business Services |
2 |
BANKING |
Savings & Loans |
1 |
CHEMICALS |
Synthetics |
1 |
COMPUTER HARDWARE |
Data Storage Devices |
1 |
COMPUTER SOFTWARE & SERVICES |
Information Technology |
1 |
CONSUMER DURABLES |
Appliances |
1 |
DIVERSIFIED SERVICES |
Security & Protection Services |
1 |
DIVERSIFIED SERVICES |
Management Services |
1 |
DRUGS |
Biotechnology |
1 |
ELECTRONICS |
Scientific & Technical Instruments |
1 |
ELECTRONICS |
Semiconductor - Specialized |
1 |
FINANCIAL SERVICES |
Closed-End Fund - Equity |
1 |
FINANCIAL SERVICES |
Asset Management |
1 |
HEALTH SERVICES |
Medical Appliances & Equipment |
1 |
INTERNET |
Internet Software & Services |
1 |
INTERNET |
Internet Information Providers |
1 |
MANUFACTURING |
Industrial Equipment & Components |
1 |
MATERIALS & CONSTRUCTION |
Waste Management |
1 |
MATERIALS & CONSTRUCTION |
General Contractors |
1 |
MATERIALS & CONSTRUCTION |
Lumber, Wood Production |
1 |
RETAIL |
Grocery Stores |
1 |
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.
Category |
Symbol |
Company Name |
Expected Gain1 |
|---|---|---|---|
| Best Overall | DAIO | Data I/O Corp | 116 |
| Top Technical | ENG | Englobal Corp | 72 |
| Top Fundamental | UNP | Union Pacific Corp | 46 |
| Top Tech. & Fund. | UNP | Union Pacific Corp | 46 |
Category |
Symbol |
Company Name |
Expected Gain1 |
|---|---|---|---|
| Best Overall | ASGN | On Assignment Inc | 95 |
| Top Technical | IDSA | Industrial Svcs Of Amer | 73 |
| Top Fundamental | APEI | American Public Education, Inc. | 53 |
| Top Tech. & Fund. | APEI | American Public Education, Inc. | 53 |
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