Weekly Newsletter 06/11/10
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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  
The major indexes made solid gains for the week but on low volume and high volatility - not a good investment climate for the individual investor.

Friday brought news that May retails sales were down by 1.2% which reminded me of last weeks chart that I showed you from the Consumer Metrics Institute. Based on consumer sales data they are predicting a recession in the third quarter and Friday's data gives additional weight to that view.

The NASDAQ Composite gained 1.1% for the week and closed right on its 50 day moving average. It thus faces two lines of resistance, the psychologically important 50 dma and the downward trend line. A breakout above 2310 would be bullish but the index could also test support at 2140. A breakdown below that level would continue the bearish trend.

NASDAQ Composite

I found the following video immensely amusing and hope you will too:

BP Spills Coffee
 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
A Comparison of Two Strategies

Following on from our work over the past few weeks, I have prepared a page which puts our 'Buy on Alert' and 'Buy on Confirmed Breakout' side by side. You can see the page here.

I have also written an explanation of the inner workings of the backtest simulation that lies behind the strategies and you can read that at Backtest Methodology.
 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 10211.1 2.81% -2.08% Up
NASDAQ 2243.6 1.1% -1.13% Down
S&P 500 1091.6 2.51% -2.11% Up
Russell 2000 649 2.37% 2.35% Down
Wilshire 5000 11400 2.5% -0.85% Up
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
Dow Jones
2.81 %		 Dow Jones
-4.08 %		 Russell 2000
8.1 %		 Russell 2000
2.35 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Specialty Eateries Toy & Hobby Stores Toy & Hobby Stores Housewares & Accessories
 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 4 12.54 3.9% 1.89%
Last Week 3 14.15 6.05% -0.4%
13 Weeks 174 14.46 15.4%
 -7.21%
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 JBLU JetBlue Airways Corporation 102
Top Technical ASPS Altisource Portfolio Solutions S.A. 37
Top Fundamental MED Medifast Inc. 67
Top Tech. & Fund. LULU Lululemon Athletica Inc. 42
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 LOOP LoopNet, Inc. 63
Top Technical LOOP LoopNet, Inc. 63
Top Fundamental MELI Mercadolibre, Inc. 44
Top Tech. & Fund. MELI Mercadolibre, Inc. 44
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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