The FOMC delivered the expected QE3 and the markets rejoiced. The NASDAQ Composite broke out on Thursday to a new post 2000 high with an accumulation day volume that was 10% above the 50 day average and turned in another accumulation day on Friday. The rally had been building since Tuesday with successive accumulation days but note that none of them closed at their intraday high indicating there is still some nervousness and some traders want to reap their daily profits rather than let them ride.

Our equivolume charts are an excellent way to assess daily market performance as they simultaneously show price, volume, volume relative to the 50 day average and accumulation and distribution days.



Despite this week's progress, our NASDAQ Trend indicator is still showing down and we discuss the reasons for this below.

The week produced 50 breakouts, with the greatest number coming from the CwH watchlist. The Flat Base pattern was also prominent as could be expected given the range-bounded performance of the lat three weeks. The CwH pattern produced the highest average gain at the week's close and also the highest intraday average. This is consistent with our historical preference for the CwH pattern.

B'out Date	Symbol	Base	B'Out Price	Last Close	Current % off BOP	*Gain at Intraday High
9/10/2012	CGI	CwH	16.9	16.65	−1.48%	5.62%
9/10/2012	QUAD	CwH	18.57	19.51	5.06%	7.11%
9/11/2012	DW	CwH	29.48	29.75	0.92%	0.92%
9/11/2012	HRS	CwH	47.55	50.52	6.25%	6.25%
9/11/2012	THO	CwH	33.19	35.85	8.01%	8.01%
9/12/2012	CX	CwH	8.15	8.37	2.70%	5.03%
9/13/2012	AREX	CwH	32.65	34.61	6.00%	6.00%
9/13/2012	BBT	CwH	32.94	33.99	3.19%	3.19%
9/13/2012	BC	CwH	24.99	25.46	1.88%	1.88%
9/13/2012	BCOR	CwH	16.5	17.7	7.27%	7.27%
9/13/2012	BXS	CwH	15.32	15.57	1.63%	1.63%
9/13/2012	CIA	CwH	10.27	10.78	4.97%	4.97%
9/13/2012	CSFL	CwH	8.36	8.51	1.79%	2.03%
9/13/2012	DRN	CwH	81.06	84.84	4.66%	4.66%
9/13/2012	EGP	CwH	55.07	55.49	0.76%	0.87%
9/13/2012	ETM	CwH	6.75	7.19	6.52%	6.52%
9/13/2012	FIO	CwH	29.46	30.15	2.34%	2.34%
9/13/2012	FTK	CwH	12.35	12.91	4.53%	4.53%
9/13/2012	GCA	CwH	7.98	8.5	6.52%	6.52%
9/13/2012	GLDD	CwH	7.71	7.8	1.17%	1.17%
9/13/2012	HCA	CwH	29.35	31.16	6.17%	6.17%
9/13/2012	INXN	CwH	19.94	20.17	1.15%	1.15%
9/13/2012	MHK	CwH	75.05	78.92	5.16%	5.16%
9/13/2012	NXPI	CwH	26.04	26.67	2.42%	2.42%
9/13/2012	PIR	CwH	19.62	19.78	0.82%	0.82%
9/13/2012	PSS	CwH	21.69	21.73	0.18%	0.18%
9/13/2012	QLD	CwH	62.18	63.37	1.91%	1.91%
9/13/2012	TBBK	CwH	9.9	10	1.01%	1.01%
9/13/2012	TQQQ	CwH	62.74	64.45	2.73%	2.73%
9/13/2012	WFC	CwH	35	36.13	3.23%	3.23%
9/13/2012	Z	CwH	43.49	42.72	−1.77%	1.79%
9/14/2012	ATU	CwH	29.93	30.09	0.53%	0.53%
9/14/2012	CSC	CwH	33.96	34.68	2.12%	2.12%
9/14/2012	ECPG	CwH	29.82	30.04	0.74%	0.74%
9/14/2012	EXAM	CwH	13.94	14.07	0.93%	0.93%
9/14/2012	IRIS	CwH	13.08	13.42	2.60%	2.60%
9/14/2012	PATK	CwH	13.89	14.61	5.18%	5.18%
9/14/2012	WBC	CwH	61.71	62.1	0.63%	0.63%
Average CwH Performance					2.91%	3.31%
9/13/2012	WST	DB	48.83	49.41	1.19%	1.19%
9/11/2012	BMR	FB	19.13	19.78	3.40%	3.40%
9/11/2012	V	FB	131.15	134.25	2.36%	2.92%
9/12/2012	BAX	FB	59.74	60.48	1.24%	1.72%
9/12/2012	BMR	FB	19.23	19.78	2.86%	2.86%
9/12/2012	CCG	FB	11.06	11.19	1.18%	1.99%
9/12/2012	N	FB	57.95	62.86	8.47%	8.47%
9/12/2012	PGR	FB	19.9	20.81	4.57%	4.57%
9/13/2012	CAF	FB	19.05	19.36	1.63%	1.63%
9/13/2012	ICF	FB	81.39	82.32	1.14%	1.14%
9/13/2012	VNQ	FB	67.74	68.76	1.51%	1.51%
9/14/2012	SSS	FB	57.62	57.72	0.17%	0.17%
Average Flat Base Performance					2.59%	2.76%

33% Subscription Reduction

We have introduced our own QE program with a reduction in subscription rates of 33% across the board, With the Fed's open ended commitment to almost free money, falling dollar prices and low bond yields, there is almost nowhere to invest other than the stock market so equities will inevitably move higher providing an excellent opportunity for nimble swing traders.

Breakoutwatch Trend Module

Successful trend models must avoid the whiplash that results from attempting to identify a change in trend too quickly. Our trend model waits for confirmation that a trend is established so there is always a lag between the market bottom being established (which can only be identified with hindsight) and a change in the trend signal.

Our trend model relies on improving prices, as recognized by a smoothed stochRSI indicator and improving volume as measured by a rising AccDis indicator.  The charts shows the NASDAQ closing prices for the last twelve months with the shaded areas representing the periods when the trend was up. You can see the model did pretty well with all 'Profit/Loss while Long' numbers being positive. Below the price chart are the smoothed stochRSI graphs and the AccDis indicator. You can see that the stochRSI is poised to cross the threshold at 40 and that the AccDis is trending up so we should get a trend reversal on Monday if the index makes another new high.

Because of the success of the trend model, we suggest you only go long when the trend is up and consider selling when the trend is down. Our 'Stock Timeliness Checkup' and 'Trend Reversal Signals' tools (under Evaluate > Analytic Tools) can help you with these decisions.