The NASDAQ Composite comfortably broke through resistance at 2309 to close the week at 2315. This is significant because it failed to pierce resistance at this level in August. It faces its next test at 2341. The NASDAQ was the strongest performing index as technology companies are expected to benefit most as the recovery gathers pace.



The chart shows a volume spike on Friday but this was due to Friday being a 'quadruple witching day' when volumes always increase as options and futures contracts expire and are  re-negotiated.

Our trend model turned positive for all the major indexes this week. This is consistent with the more bullish outlook among investors. The American Association of Individual Investors (AAII) reports that bullish sentiment is at its highest level since August, 2009. (If you are a contrarian, this may not be good news!) They offer two reasons:

"The first is the market’s recent rebound. The rise in stock prices is giving some investors hope that a short-term bottom in the market has been formed. The second is the reduction in chatter about potential deflation and a double-dip recession. Though the economic data has not been great, it has been good enough to give some assurance that recovery is continuing."

The more positive mood and increasing volume caused a surge in breakouts this week to 41 compared to the thirteen week average of 15.

Real Time Volume Filters

A new addition to the cup-with-handle watchlist filter options allows you to restrict email alerts to only those CwH breakouts that meet a specific volume level.

This goes into effect on Monday, September 20, and is available to Trial and Platinum subscribers.

This new option allows you to receive alerts at the higher volume levels we have identified as necessary for the most successful breakouts.

Using Real Time Volume Filters

Platinum subscribers can set parameters that control when and on what basis they receive email alerts. These alerts are controlled from the "Filter Settings" tab on each watchlist.

The cup-with-handle watchlist now has an additional feature that allows you to set a real time volume threshold. The threshold can be higher or lower than the default volume threshold which is 150% of the 50 day moving average volume, and you can choose to receive alerts based on an actual volume threshold or a projected volume threshold.

A projected volume threshold is based on a straight line extrapolation of the volume at a specific time until the end of the session. For example, a session lasts 6.5 hours, so let the volume after 30 minutes by 100k shares, then the projected volume to the end of the session will be


The Backtest, which can be used to test which filter values have worked in the past, does not take into account these new volume filters.

Also, although our price data is in real time, our volume data is delayed by 15-20 minutes. For that reason, you may want to set the real time volume alert level