| Market Summary | Weekly Breakout Report | Top Breakout Choices | Top 2nd Chances | New Features | Tip of the Week |
The major indexes recovered strongly with the NASDAQ Composite gaining almost 4%. The Bullish mood appeared to come from a belief that Congress will act before the economy goes over the 'fiscal cliff', or that at least the cliff will not be as steep as feared as consumer confidence and the housing market improved. Optimism was also buoyed by improving Chinese economic data and rising European markets. Volume was understandably weak due to the Thanksgiving Holiday and a shortened trading session on Friday.
Our market trend indicators continue to point upwards (more on these indicators below). The NASDAQ is almost back to its 50 day moving average level and could face resistance there if the current (overly, in my view) optimistic mood dissipates.
No new features this week.
Market Trend Indicators
Last week we promised to take a
look at our market trend algorithms as it appeared they had not reacted
to the steep decline that began on November 7 as the NASDAQ crashed
through its 50 day moving average and lost 2.5%.
Our Trend Reversal Signals (TRS) were developed in response to backtesting we did on CAN SLIM's follow through day rules in March 2011. Our conclusion was that the rules are difficult to apply systematically and were generally unreliable. Our goal was to produce an easily quantifiable and more reliable set of rules for identifying both upwards and downwards trend reversals.
The rules we developed were based on a smoothed version of the Stochastic RSI with overbought and oversold levels calibrated differently for each major index and the Accumulation/Distribution Line. The TRS we developed required that a signal generated by the Stoch RSI had to be confirmed by the trend in the Acc/Dis Line.
The chart shows signal reversals over the last year with change to 'up' indicated by '^' and change to down indicated by 'v'. While the signals have performed well, it is clear that the model is better at picking 'up' trends than 'down' trends. We are working on improving this but the Thanksgiving Holiday interrupted our work. We hope to have new results next week.
Our Trend Reversal Signals (TRS) were developed in response to backtesting we did on CAN SLIM's follow through day rules in March 2011. Our conclusion was that the rules are difficult to apply systematically and were generally unreliable. Our goal was to produce an easily quantifiable and more reliable set of rules for identifying both upwards and downwards trend reversals.
The rules we developed were based on a smoothed version of the Stochastic RSI with overbought and oversold levels calibrated differently for each major index and the Accumulation/Distribution Line. The TRS we developed required that a signal generated by the Stoch RSI had to be confirmed by the trend in the Acc/Dis Line.
The chart shows signal reversals over the last year with change to 'up' indicated by '^' and change to down indicated by 'v'. While the signals have performed well, it is clear that the model is better at picking 'up' trends than 'down' trends. We are working on improving this but the Thanksgiving Holiday interrupted our work. We hope to have new results next week.
| Index | Value | Change Week | Change YTD | Trend | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dow | 13009.7 | 3.35% | 6.48% | Up | ||||||||||||||||||||||||||||||||||||
| NASDAQ | 2966.85 | 3.99% | 13.88% | Up | ||||||||||||||||||||||||||||||||||||
| S&P 500 | 1409.15 | 3.62% | 12.05% | Up | ||||||||||||||||||||||||||||||||||||
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. |
||||||||||||||||||||||||||||||||||||||||
# of Breakouts |
Period Average1 |
Max. Gain During Period2 |
Gain at Period Close3 |
|
|---|---|---|---|---|
| This Week | 13 | 19.92 | 3.32% | 2.48% |
| Last Week | 22 | 19.62 | -0.74% | -2.06% |
| 13 Weeks | 337 | 20.62 | 5.69% |
-1.51% |
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 | POWR | PowerSecure International, Inc. | 102 |
| Top Technical | POWR | PowerSecure International, Inc. | 102 |
| Top Fundamental | SLCA | U.S. Silica Holdings Inc | 63 |
| Top Tech. & Fund. | PRXL | PAREXEL International Corporation | 38 |
Category |
Symbol |
Company Name |
Expected Gain1 |
|---|---|---|---|
| Best Overall | MIPS | MIPS Technologies, Inc. | 85 |
| Top Technical | EPAM | EPAM Systems Inc | 44 |
| Top Fundamental | TREE | Tree.com Inc | 62 |
| Top Tech. & Fund. | TREE | Tree.com Inc | 62 |
If you received this newsletter from a friend and you would like to receive it regularly please go to the BreakoutWatch.com site and enter as a Guest. You will then be able to register to receive the newsletter.
Copyright © 2012 NBIcharts, LLC dba BreakoutWatch.com.
All rights reserved.
"
BreakoutWatch," the BreakoutWatch.com "eye" logo, and the
slogan "tomorrow's breakouts today" are service marks of NBIcharts
LLC. All other marks are the property of their respective owners, and are
used for descriptive purposes only.
BreakoutWatch is not affiliated with Investor's Business Daily or with Mr. William O'Neil.
Our site, research and analysis is supported entirely by subscription and is free from advertising.