Weekly Newsletter 03/06/09
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You are receiving this email because you are or were a BreakoutWatch.com 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.
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  

The images below show the dramatic recovery of the NASDAQ Composite and S&P 500 in the last 30 minutes of trading yesterday. Simalar gains were made by the Russell 2000 so the rally was broad based. Analysts explained the sudden recovery as due to a rise in the price of oil that lifted Exxon and Chevron and a report that the finance unit of GE had adequate funding. We find that explanation insufficient to explain the broad-based recovery and think the dramatic move upwards was more likely a result of short covering.Two explanations for short covering occur to us. The first is that the market was heavily shorted and that traders wished to cover their positions before going into the weekend, which has frequently been a time when new Government intervention has been announced. The second is that insiders got wind of a new initiative to be announced on Sunday or Monday morning before the market opens so had a sound reason to cover. Either way, it shows the difficulty of trading in this volatile market.

NASDAQ S&P 500
 New Features this Week Additional Value that we added this week

Our new watchlist format has now been extended to all of our watchlist chart patterns. The result is a simpler, consistent presentation across all watchlists with features that were previously only available for the cup-with-handle list now available on all watchlists. These features are:

  • Watchlist Filtering
  • Watchlist alerts based on filters (not presently available for short position lists)
  • Filter backtesting
  • the Chart Browser makes for quick visual analysis of all stocks in the pattern
  • TA charts are now the default chart presentation style for all watchlists
  • Watchlist download

The new format is still on beta test and is available to all Subscription levels. We hope to complete the beta test in one week and access to the new features will then be limited by subscription level. During this time the new filter alert settings will not be used and alerts will continue to be sent as at present.

After you login, the new watchlist formats are available from the Mine for Candidates > New Watchlists (Beta) menu choice. The old format lists are still available under the Mine for Candidates > Legacy Watchlists menu choice.

If all goes well, we will implement the new features on the week beginning March 16. Please tell us what you like and do not like about the new format before then.
This Week's Top Tip Tips for getting the most out of our site
Although our belief last week was that the market was still prime for shorting, we think it is now too unpredictable to take any position.
 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 6626.94 -6.17% -24.49% Down
NASDAQ 1293.85 -6.1% -17.96% Down
S&P 500 683.38 -7.03% -24.34% Down
Russell 2000 351.05 -9.76% -29.71% Down
Wilshire 5000 6935.36 -7.21% -23.68% Down
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
NASDAQ Composite
-6.1 %		 NASDAQ Composite
-23.26 %		 Dow Jones
-40.94 %		 NASDAQ Composite
-17.96 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Auto Parts Stores Education & Training Services Diversified Utilities Long Distance Carriers
 Most Improved Industry (by change in technical rank2)
Aluminum
+ 54		 Aluminum
+ 99		 Long Distance Carriers
+ 213		 Long Distance Carriers
+ 210
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 3 9.31 11.08% 4.56%
Last Week 10 9.08 13.12% 0.29%
13 Weeks 113 9.77 15.61%
 -13.92%
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
Category
Symbol
Company Name
Expected Gain1
Best Overall CYCL Centennial Communications Corp 71
Top Technical CYCL Centennial Communications Corp 71
Top Fundamental HMSY Hms Holdings Corp 37
Top Tech. & Fund. HMSY Hms Holdings Corp 37
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
No second chances this week.
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