BreakoutWatch.com Weekly Review for 09/12/2015

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

As a note to new subscribers, I always focus on the NASDAQ Composite in this section as it is from this index that the most successful breakouts occur.

The index rose almost 3% this week to provide the best performance of the three major indexes. Our market trend indicator remains negative, however, which in the past has always correlated with a lower number of successful breakouts, so caution is still advised.

The index closed at 4822 and faces resistance at 4828. Expect a breakthrough if the Fed holds off on rate increases on Wednesday. Speculation that that will be the outcome of next week's meeting, may generate a move higher earlier in the week.

NASADQ Composite Chart

Weekly Breakout Report

Volatility Squeeze breakouts dominated this week with 20 out of 23 breakouts. The top 4, STRP, CNCE, REPH and TXMD, all signaled they could possibly breakout with a move higher on above average volume on the day before breakout. Thia is a characteristic of successful breakouts that I have frequently stressed in recent weeks.

Brkout Date	Symbol	Base	Squeeze	BrkoutOut Price	Brkout Day Close	RS Rank^*	Last Close	Current % off BOP	Gain at Intraday High
Breakouts for Week Beginning 09/07/15
09/09/15	STRP	SQZ	Y	24.46	28.31	96	38.25	56.38	56.38
09/09/15	CNCE	SQZ	Y	16.60	17.96	95	19.27	16.08	16.08
09/08/15	REPH	SQZ	Y	14.69	15.86	99	16.89	14.98	14.98
09/09/15	TXMD	SQZ	Y	6.59	6.6	90	7.33	11.23	11.23
09/09/15	REPH	SQZ	Y	15.85	15.97	99	16.89	6.56	6.56
09/08/15	SIGM	SQZ	Y	10.30	10.88	98	8.69	-15.63	5.63
09/11/15	INCY	CwH	N	124.80	131.01	98	131.01	4.98	4.98
09/10/15	MPAA	SQZ	Y	31.91	32.6	82	32.9	3.10	3.1
09/11/15	NUVA	SQZ	Y	52.51	54.05	91	54.05	2.93	2.93
09/09/15	FLML	SQZ	Y	22.86	23.04	96	23.52	2.89	2.89
09/08/15	STBZ	SQZ	Y	20.20	20.74	82	20.49	1.44	2.67
09/09/15	SFNC	SQZ	Y	45.86	46.43	84	46.56	1.53	2.4
09/08/15	CYTK	SQZ	Y	7.22	7.38	96	7.31	1.25	2.35
09/09/15	DMRC	SQZ	Y	38.91	39.68	97	35.96	-7.58	1.98
09/11/15	NCI	SQZ	Y	15.35	15.65	82	15.65	1.95	1.95
09/11/15	CCS	CwH	Y	23.06	23.39	91	23.39	1.43	1.43
09/11/15	RUTH	SQZ	Y	16.16	16.37	91	16.37	1.30	1.3
09/11/15	CBZ	SQZ	Y	9.97	10.09	88	10.09	1.20	1.2
09/10/15	JAKK	SQZ	Y	9.86	9.92	96	9.92	0.61	0.61
09/09/15	BFIN	SQZ	Y	12.14	12.15	80	12.2	0.49	0.49
09/11/15	FIZZ	CwH	N	28.22	28.31	95	28.31	0.32	0.32
09/10/15	DEG	SQZ	Y	22.66	22.67	88	22.63	-0.13	0.04
09/09/15	ABIO	SQZ	Y	6.64	6.64	83	6.4	-3.61	-0
Weekly Average (23 breakouts)								4.51	6.15
^*RS Rank on day before breakout.

New Features this Week

Additional Value that we added this week

I've added a new annotation to cup and handle and double bottom charts that clearly shows how our algorithms recognized each of these patterns. This should make it easier for subscribers to visualize the patterns,which in some cases could be quite obscure.

The new annotations are shown when you click on a symbol in the CwH and DB watchlists, they are not yet available in the chart browser.

The shape of the the cup and the shape of the handle should now be easier to recognize as shown here.
example of cup and handle pattern chart

The double bottom pattern also becomes clearer as in this example for HASI

example of double bottom pattern chart

This Week's Top Tip

Tips for getting the most out of our site

Current market conditions clearly favor the Volatility Squeeze pattern as this weeks breakouts show. This is not a pattern that was recognized by O'Neil in How to Make Money in Stocks, but it is one that has proven to be quite profitable, ranking just behind the cup and handle pattern, in our performance rankings. I developed it originally as a complement to the cup and handle, as research showed that a handle that was also in a volatility squeeze performed particularly well on breakout day (see http://www.breakoutwatch.com/newsletter/archive/2015-04-11.php#6, and then developed it as a stand-alone pattern.

The derivation of the pattern is described on the methodology tab on the Volatility Squeeze watchlist (http://www.breakoutwatch.com/watchlists/html/SQZ_meth.html).

This week's breakout of STRP shows how powerful this pattern can be.
volatility Squeeze chart pattern for STRP

Market Summary

Overview of market direction and industry rotation

Index

Value

Change Week

Change YTD

Trend

Dow

16433.1

2.05%

-7.8%

Down

NASDAQ

4822.34

2.96%

1.82%

Down

S&P 500

1961.05

2.07%

-4.75%

Down

1 Week	13 Weeks	26 Weeks	Year-to-Date
Best Performing Index
NASDAQ Composite 2.96 %	NASDAQ Composite -4.53 %	NASDAQ Composite -1.01 %	NASDAQ Composite 1.82 %
Best Performing Industry (by average technical score over each period)
1 Week	3 Weeks	13 Weeks	26 Weeks
Tobacco Products - Other	Music & Video Stores	Tobacco Products - Other	Drugs Wholesale
Most Improved Industry (by change in technical rank²)
Aerospace/Defense - Major Diversified + 87	Aerospace/Defense - Major Diversified + 90	Long Distance Carriers + 142	Tobacco Products - Other + 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.

Top Breakout Choices

Stocks on our Cup-and-Handle list with best expected gain if they breakout