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July 30th: A new month and the end of a very positive July. August - as the quietest trading month of the year - will likely be quiet as the prior month's gains are digested. I suspect we will see an important top during this month and that is why I have switched the recommendation to 'Sell' for the month. The market hasn't topped yet as indicated by continued strength in the $NASI and $BPCOMPQ, but all good things must come to an end and the rally which started at the end of April looks to be running out of steam. I will focus on current Breakout and Gold Member plays in my stock features - looking for fresh breakouts (independent of volume, which tends to decline as rallies peak) and support areas to raise stops. We will be looking to maximise gains at this point and let the runners run and natural topping action to stop us out.

What kind of market action can we expect? June was a lacklustre month as it followed May's sizeable jump. August may do likewise. In the NASDAQ we saw some of the pennant breakout give some of its gains back - although it still holds support as marked by strong technicals and the failure of price to undercut the pennant apex. The same can be said of the NASDAQ 100, the chief difference here with respect to the NASDAQ is the failure of on-balance-volume to move to new near term highs. The semiconductor index is trading right along its pennant apex as the formation morphs into a longer rectangular consolidation. Support is market at 465 and resistance at 480 give or take a couple of points. Buy break of 480, sell loss of 465 and this goes for trading the tech indices too. The other ominous sign was the spike in the volatility index. The latter still has to follow through but we could be in for a rough ride if weakness in tech markets intensifies. The small caps ended the week on a bearish harami, 675 is the line in the sand for this index. Larger caps had a quiet week as the Dow attempted a breakout on low volume while the S&P managed a new closing high breakout, only to return all of its gains (and then some) to leave it vulnerable to a bull trap (a close below 1,230 would confirm the bull trap).

Breakout targets met: KNDL featured for June 8th broke again on heavier volume. Follow through target is $20.00 but for my purposes this is a closed trade for a 24.6% gain.

Breakout failures: ARB featured for January 26th and June 16th lost support and its 50-day MA, looks ready to test $38.80. Closed for a 2.8% gain and 5.4% loss. TDSC hit its stop and has left a significant bull trap - short prospects. Featured on 27th June, closed for a 7.9% loss. ENS made a brief sojourn to the breakout list - gapping down and through its stop price as a downgrade was posted 1 hour afer the list was emailed out. The Gold Member pick of this stock closed for a small 6.3% gain.

July 28th: Markets enjoyed a measure of strength but volume limped in for all the days gains. Most disappointing were the large cap indices. The S&P managed to pull away from upper resistance of its pennant, but it did so without any increase in volume. The Dow clearly breached its bullish flag, but again volume disappointed. The tech indices [NASDAQ and NASDAQ 100] made modest gains to follow yesterday's pennant breakout but as with the larger caps, volume came in lower. Even the Russell 2000 went against the grain and broke to the upside (despite the technical picture) but its bearish wedge leaves resistance only a short hop, skip and a jump away. Once again, the secondary indicators played to recent form. Small gains in the $NASI and $BPCOMPQ, and a support bounce in the $NAA50 unfortunately the latter didn't do enough to reverse its 'sell' signal - although it came close. Markets are likely to continue in this vein into August where I expect a decent top will be put in place. September and October could be ugly months.

Breakout targets met: ACL featured for April 25th and June 8th closed for a 26% and 13% gain following strong earnings. SBAC hit its target price of $16.14 but looks well positioned to follow through to a measured move target of $20.00. The stock featured on May 9th. It closed for a 59% and 38% gain.

Breakout failures: none

July 27th: An interesting mix of a day. The S&P, and tech indices [NASDAQ and NASDAQ 100] broke their pennants to the upside and we should see the next phase of their rallies start here. Unfortunately, the semiconductor index had a bit of a wild day, closing down slightly but not enough to negate yesterday's pennant break (although it lies real close to doing so). The Dow continued its consolidation while the Russell 2000 finished with its third inside day. At this stage the small cap index is a strong straddle play and could technically be considered a bearish harami cross (one of the most potent of the reversal candlestick combinations). A close below 668 would confirm. The technical picture in the Russell 2000 continues to show weakness with a rounding top in the MACD trigger line and a CCI below the 100 mark. Small caps lead while large caps drag (in part due to the larger market caps in the latter making them slower to react to change), with weakness in the Russell 2000 and strength in the S&P we could be looking at one such top. However, secondary indicators have yet to confirm such a situation although they remain overbought.

Breakout targets met: none

Breakout failures: TUP got whacked on earnings shedding 11% by the close of day, intraday it did enough to hit its stop for a 7.6% loss. It featured as a breakout for April 28th. KOMG hit its highest stop after a volatile day, it closed up after bouncing off its 50-day MA and remains bullish - but for the purposes of my analysis it is considered stopped out. The stock featured as a breakout on May 9th and July 18th for a 28.1% gain and 7.4% loss respectively, and as a Gold Member pick for January 31st closing for a 60% gain. VITX clipped its stop after it reported earnings. The stock featured on July 20th. It closed for a 11.3% loss.

July 26th: Swing traders will be well positioned to take advantage of tight trading and the pennant formation in the NASDAQ and NASDAQ 100. An option straddle looks the best play at this juncture with a downside target of the 20-day MA and an upside target of 2,300 in the NASDAQ and 1,715 in the NASDAQ 100. The semiconductor index may have given a taste of what is to come here as it broke its bullish pennant to the upside - in addition, AMZN earnings reported lower net profit but beat estimates and beat them enough to tack on 10% to the stock price.

Higher oil prices were today's excuse for the lighter close in the Dow as it shapes a bullish flag/wedge on declining volume. The S&P, like the tech indices, ended the day with a bullish pennant with the second of two inside days. As with the tech indices, a straddle play looks good value with a bullish upside break favored. A downside target is the 20-day MA. Upside target is about 1,280. The Russell 2000 remains caught in indecision - but like the S&P - it has strung together two inside days which should prelude a big unwind. A straddle play in this index would be more aggressive, but there is likely greater room for a downside move should it break below rising wedge support.

The secondary indicators remain unchanged from yesterday with slight gains in each of them - but not enough of gain in the $NAA50 to reverse its 'sell' signal.

Breakout targets met: none

Breakout failures: none

July 25th: Chief news of the day was the continued boom in housing prices as long term interest rates remained low in spite of Fed rate increases. As for the markets, eyes will be on the semiconductor index as it has narrowed into a small (bullish) pennant, the break of which will dicate the direction of the tech indices [NASDAQ and NASDAQ 100]. Other than this it was another day in the life of whipsaw as the Rise-Fall-Rise sequence tacked on another 'Fall', again on ever decreasing volume. Nothing to suggest the direction of the next move, although the Russell 2000 will soon run out of room to maneuver in its rising bearish wedge. The secondary indicators held their earlier patterns with the $NAA50 making a more concerted move down while the $NASI and $BPCOMPQ inched upwards. Tuesday is another day...

Breakout targets met: none

Breakout failures: none

July 23rd: The week ended with low volume rallies - an attempt to reverse much of the selling triggered by the second wave of London bombings. But it was weaker earnings which managed to deflate a number of breakout stocks. Some of the bigger hits included AFFX, and HTCH, But all was not doom-and-gloom as stocks like BJS, GES, HIH, TRDO, and ULTI in particular, resumed their rallies. Despite the malaise in some of the tech bell weathers - INTC, GOOG, and MSFT the tech markets managed to hold the bulk of their recent gains. The NASDAQ and NASDAQ 100 closed near the week highs on lighter volume, but the semiconductor index ended the week on a bearish harami although its technicals do not suggest a top is in place. The Dow was less fortunate as it failed to hold its break of 10,656, but the S&P and Russell 2000 (the latter in particular) managed to regain much of their week's strength by Friday's close.

What of the secondary indicators? The $NAA50 ended the week on a 'sell' after whipsawing above and below its 5-day EMA. Its technicals have remained firmly bearish since the end of June suggesting a top is in place for this indicator (translation - don't expect many more tech stocks to break above their 50-day MA if they haven't done so already, and any which fall below their 50-day MA are unlikely to regain it over the next 3-4 months). The $NASI rose to 317, some 183 points away from bull market tops but holds a bearish divergence in its MACD histogram. The net effect of this is to hold long positions but prepare to sell if the 5-day EMA is crossed to the downside. The $BPCOMPQ managed to reverse weakness from June and remains firmly bullish. Hints of what to come can be found in the declining CCI (the last indicator on the chart) - but I would use this indicator as the confirmation signal to sell once the other two indicators are on 'sells'. Unlike the prior two indicators this still looks to have plenty of room to run upside. How far can the markets run? Look at the volatility index - it is down in the depths of its lows - a spike in volatility is traditionally viewed as an indicator of downside but this is not what is measures. There doesn't look to be a reversal in play, but the next spike might prelude a sharp move upside.

Breakout targets met: none

Breakout failures: HTCH suffered a big gap down loss as it disappointed investors. The stock featured for April 25th.

July 21st: The London attacks overshadowed China's re-evaluation of the Yuan which forced markets to give up much of Wednesday's gains. No market escaped the selling, although it was the Dow which was most affected as it left a potential bull trap behind. However, in the context of the broader rally there was little change. The secondary indicators, $BPCOMPQ and $NASI continued to rise - although the $NAA50 again reversed its signal from bearish-bullish-back to bearish. The latter indicator looks set for further whipsaw as it approaches the critical overbought 1,700 level. Although there was broad selling in the NASDAQ and NASDAQ 100, marking distribution, remaining markets managed to trade on lower volume suggesting the bulls were taking a rest after yesterday's hard work. Futures are currently down as of 4:00 am ET - but this can all change come the open.

Breakout targets met: none

Breakout failures: DSCM featured as a breakout for June 3rd and as a Gold Member pick for May 11th.

July 20th: Well - went to bed expecting to see a swathe of red, but instead awoke to solid buying. The expected knock down in tech failed to hold as buyers swooped in to take the weak open to new closing highs. The higher volume comprised a likely mix of tech buyers and morning shorts forced to cover. The healthy action spread to the larger caps. The Dow finally managed to close over 10,656 resistance on heavy volume. The S&P also managed to negate the bearishnes of the July 14th shooting star. Another performer on the day was the Russell 2000 which has remained the strongest index since the June correction. Strength in the NASDAQ and NASDAQ 100 (the latter in particular) was driven by the semiconductor index which matched its move by marking a breakout in the MACD trigger line.

In the secondary indicators, the $NAA50 managed to reverse its 5-day EMA sell signal - but still holds a 'sell' in its MACD trigger line and CCI. The $NASI continued its ascent, lying some 214 points from topping territory but still hasn't managed to shake its bearish divergence in the MACD trigger line. The $BPCOMPQ has remained the strongest secondary indicator and has shown no evidence of weakness since reversing its MACD trigger line bearish divergence in early July. The first two indicators warn of caution - but until there is weakness in all three indicators then long side positions are favored.

Breakout targets met: none

Breakout failures: none

July 19th: After hour hits in INTC and YHOO look set to take off much of the gloss from today's heavy volume gains and puts a measure of doubt in for the NASDAQ and NASDAQ 100 on Wednesday - as of 1:15 am ET NASDAQ futures were down 10 points, Dow futures by 32 points and the small caps by 3 points. The larger caps also gained on heavier volume, but disappointly, did not mark new near term highs. The Dow remained trapped below 10,656 while the S&P remained under the influence of last week's shooting star. The Russell 2000 started to pull outs of its pullback - but all indices look set for downside tomorrow. If we see higher volume it will mark a sharp shift to the bears - although a number of important support levels lie below. There was no change in the secondary indicators. Gains in the $NAA50 were insufficient to reverse yesterday's 'sell' signal - indeed, a bearish trigger in the MACD line was signalled Tuesday. The $BPCOMPQ and $NASI continued their ascent and bearish divergences in these indicators should be watched for.

Breakout targets met: PWAV featured as a breakout for May 3rd reached its target as part of a continued rally for a 36% gain.

Breakout failures: none

July 18th: Markets started to relieve themselves of their overbought condition on lower volume. Bullish action in each index, but keep an eye on the secondary indicators. The $NAA50 flipped into the red, but the $BPCOMPQ and $NASI are holding green. The weakest indices were the large cap Dow and S&P, but volume in each index did not suggest a breakdown was at hand.

Breakout targets met: none

Breakout failures: CCK featured as breakout plays for October 15th and July 11th and as a Gold Member play on December 1st. Closing for a 38% and 17% profit - its most recent feature closed for a 4% loss. HHS featured as breakout plays for April 27th and June 20th and as a Gold Member play for January 7th. The Gold member play closed for a 13% profit, the Breakout plays closed for a 1% and 6% loss.

July 17th: Little change at the top as Friday's trading ended on quiet volume. Some of the weakness evident by Thursday's black candlestick in the NASDAQ was tempered by Friday's slighlty higher close. Technicals in this index remain in good shape. The Dow bumped against 10,656 resistance for another day. The Russell 2000 stemmed, at least for a little while, some of its recent decline - although Friday's narrow gain did not qualify as a bullish piercing pattern so bears are still in control of the short term situation. Secondary indicators held their recent jump as they seek a new status quo.

Breakout targets met: none

Breakout failures: none

July 14th: The NASDAQ edged up along the upper Bollinger band on a sequence of accumulation days - solid bullish action. Thursday's narrow intraday range on heavy volume may be viewed with concern as the market failed to build on the higher gap open. However, bulls can take heart from the breakout in on-balance-volume and continued strength in the semiconductors. Given strength in the semiconductors the NASDAQ 100 fared better on the day and was able to close up from the day's open. The latter index closed a shade over 1,570 resistance but the move was not supported by matching highs in on-balance-volume. Given the mixed signals one should look to the secondary indicators for guidance. The one indicator which remained immune to the recent consolidation was the $BPCOMPQ - and its surge following some tentative action on July 7th will likely keep the markets bubbling for another few weeks. The $NAA50 is starting to look a little tired at 1,500 but there is still some room to move to 1,700 before an intermediate top is in place. The $NASI revered its late June signal and is again in the ascendancy at 228 with another 270 points odd to go before a top can be expected. Until these three indicators turn red (on a cross below their 5-day exponential moving average) the market is a buyers market.

The Dow is up against 10,656 resistance but was the strongest index on the day. A break above this level tomorrow will set up a run to 11,000. Thursday may have marked some rotation from tech and small caps into larger caps. The chief concern for the S&P was the bearish inverse hammer on heavier volume. A close below Thursday's lows would confirm weakness - but the breakout in on-balance-volume does not suggest a need to rush to the exits. As for the small caps, the Russell 2000 looks ready to test 650 support - which given its run from 575 should not be surprising. The 20-day MA looks a good place to buyback this index if so desired.

Breakout targets met: Over the last few days there was some positive action, including Sprint's plans to buy UNWR for $6.25 a share. The stock first featured for Gold Members on November 4th and again for April 21st. It featured as a Breakout play for November 23rd, May 6th, and finally on June 7th. AQNT was another banker - closing for 106% and 55% gain as a Breakout play for January 10th and May 5th. TALX enjoyed a recent surge as it raised Q1 estimates. It surpassed its price target of $34.14. The stock featured for April 18th.

Breakout failures: Some of the stop hits included MFC from June 22nd, WHAI from June 24th, and SONC which featured for January 5th and as a Gold member play for October 14th, the latter closing for a modest profit (11%).

July 9th: Markets got an adrenaline shot in the arm as bulls grabbed shares in a spate of rampant buying. This looks a good time to start fishing for new breakouts (so I have returned the 'Buy' symbol for July 05) but in terms of rally quality it will be a very different kettle of fish to what we had for May-June. We are no longer looking at a deeply oversold market where a rising tide raises all ships - instead we are going to see a more select group of stocks carry the weight of an ever increasing group of overbought stocks. Small tech caps are likely to be the darlings for the next few weeks, at least until the S&P breaks beyond 1,225. The NASDAQ was the only index to break on higher volume - a confirmation that 2,100 resistance is no more - only a higher volume reversal on Monday could kill the euphoria. The NASDAQ 100, for all of its gains, remained below resistance - but buyers of this index can take heart from the resistance break in the Sox. The solid break in the semiconductor index should filter through to the NASDAQ 100 early next week. The Russell 2000 has cleared prior resistance and shorts which had hoped to fade the breakout are now stuck fighting with bulls to cover their positions. The Dow still has some work to do and should be avoided for now (better opportunities lie elsewhere).

What did Friday mean for the secondary indicators? Well - all indicators remained in the green and bearish divergences in the CCI indicator were negated, but not those of the MACD histogram. This was true for all three tech indicators [$NAA50, $NASI and $BPCOMPQ]. It will be important to remember where tops in these indicators have emerged. For the $NAA50 this has been around 1,700, it ended Friday at 1,457 - so there is not a huge amout of room left for this to enter dangerous territory if you are a bull. The $NASI tops off in the range of 0-500, but a top here is likely to come in the upper part of this range (and possibly above) so I wouldn't view Friday's 101 close as a top at this juncture. The $BPCOMPQ perhaps the most room to move as it could run to 70+ before reversing. Assuming no sudden heavy volume reversal early next week look for the next rally to last anywhere from 4-6 weeks.

Breakout targets met: none

Breakout failures: none

July 7th: U.S. markets remained resilient in the face of the London bombing. Gap downs off the open failed to deliver the expected follow through selling - instead buyers swooped on higher volume to drive stocks higher. Today ranked as an accumulation day in all markets. However, it hasn't changed the various trading ranges which exist in the markets. The NASDAQ remained inside its 2,050-2,100 range. The NASDAQ 100 has been steadily slipping with only the 50-day MA acting as a (slim) support. The Sox failed to drive beyond resistance but it will have another chance Friday - the tech indices will need the semiconductors to break if they are to sustain any form of rally. The Dow closed on a bullish hammer - but with slow stochastics a step below the bullish mid-line the significance of this hammer as a potential bullish reversal signal is weakened. Ditto for the S&P as its bearish flag held its form for another day (I don't consider the shadows of candlesticks part of technical formations). The bullish-market-in-chief is the Russell 2000 which maintained its breakout for a third day - the longer it stays above support the greater the chance it will follow through higher. Small caps remain the best bet in this market.

Changes are afoot. The volatility index, which I have not mentioned over the last couple of months, broke from its bullish flag with an important cross in its +DI/-DI line (a momentum indicator). This injection of volatility will impact markets over the coming days and weeks - and should be the precursor for the next big move. As for the direction of this move I would stick to the secondary indicators for clues. On the surface, all three secondary indicators [$NAA50, $NASI and $BPCOMPQ] are in the green (bullish) but behind the gloss are weaknesses in their technical indicators - sell signals in the MACD trigger line and CCI of the $NAA50, and $NASI are compounded by bearish divergences of the MACD and CCI in $NAA50, $NASI, and $BPCOMPQ. In this environment one should be looking to sell, not buy. Because of this I have limited the number of new breakout features and instead concentrated on Breakout and Gold member (subscriber) stocks which are breaking from consolidations.

Breakout targets met: LM featured for January 25th and June 27th for a 45% and 11% gain respectively.

Breakout failures: The events of London brought plenty of volatility to the table which knocked some of our stops out. ADEX was stopped out following yesterday's big sell off. The stock had featured for March 3rd and June 2nd as a Breakout play, and for February 3rd as a Gold member play. The latter closed for a 21% profit. The breakout feature closed for a 6% average loss. CHH featured for 21st June. The gap down as a bearish signal overrules the bullish hammer on which it closed the day. PPH hit its stop with a very weak looking chart. The ETF featured on April 14th.

July 6th: The Sox is the index to watch tomorrow - further gains would confirm a bear trap and could dig the NASDAQ 100 out of its quagmire and send the NASDAQ to 2,100 resistance. The other performer on the day was the Russell 2000 - although it closed lower it managed to hold the upper part of Tuesday's range - maintaining its breakout. The S&P fared less well. I have redrawn the former sideways congestion into a bear flag with a measured move target of 1,175 (the 200-day MA looks a better bet to find support). The Dow was net unchanged, yesterday's gains were slashed - but the fib retracement trading range remains in effect. Secondary indicators [$NAA50, $NASI and $BPCOMPQ] held green territory but the $NAA50 would put in a double top if it closes lower than 1,235.

Breakout targets met: none

Breakout failures: CRY featured as a breakout for August 13th and June 16th, a gold member swing trade on January 13th. The stock's recent triangle play failed and this looks ready to test $7.00 support. It could have buyback merits assuming the overall market resumes its upward advance.

July 5th: Positive economic data was deemed sufficient to drive the markets upwards. Although a solid day all round for the markets, the Russell 2000 in particular, it wasn't all plain sailing. The post-holiday Monday traded on lighter volume - we will need to see a higher volume follow through to confirm accumulation is at work. All eyes will be on the Russell 2000 to see if it can hold Monday's breakout. The NASDAQ managed to break near term resistance and close over the 20-day moving average - two bullish ticks, while the NASDAQ 100 ended the day on a bullish engulfing pattern (weak as slow stochastics were not oversold at the time) but below its 20-day MA, and near term resistance. In addition, the Sox failed to close over resistance, which will keep the NASDAQ 100 suppressed. Technically, there was a bullish crossover in on-balance-volume in the NASDAQ, but all three technical indicators for the NASDAQ 100 remained in the red. All three secondary indicators [$NAA50, $NASI and $BPCOMPQ] rose for a second day which will help to reaffirm a markets in advance. Profit taking remains in order as the next rally will likely be brief (4-6 weeks) given the overbought nature of the secondary indicators following the May rally. The larger caps, Dow and S&P, ended the day higher, the latter closed above its recent congestion zone - but there remains much work to do to suggest the correction is over.

Breakout targets met: ASF from May 2nd closed for a 37% gain. Next target is $36.

Breakout failures: AIRN featured for June 28th ended the day strong after a sharp pullback. Unfortunately, morning weakness knocked the stop out.

July 3rd: Quiet trading into the long weekend made Friday a non-event - even with a positive ISM reading. The week was one for profit taking, no need to let profits slip after a strong May. Bulls can return to the markets once new near term highs are in place but the sell off (and generated supply) from the prior week remains in force for all markets. The secondary indicators reinforce the lack of market direction. The $NAA50, $NASI and $BPCOMPQ all ended the week back in the green, but not before a number of swings in each direction. Normally the secondary indicators give a clear picture of market direction without the intraday volatility of their parent index - but when we see whipsaw here we need to look at their technicals to see whether bull or bear are in control. In the $BPCOMPQ we have a CCI which has dipped below 100 (bearish), a bearish divergence in the MACD histogram (and a potential 'sell' signal in the MACD trigger line - maybe next week for this), and a flattening in the +DI line (neutral). In the $NASI we have a clear 'sell' in the MACD trigger line and CCI. In the $NAA50 we also have a 'sell' in the MACD trigger line and CCI. Certainly, these indicators suggest there is more downside to follow - even if all three are bullish with respect to their 5-day exponential moving averages.

So what can bulls look for. The NASDAQ failed its test of the 20-day MA, but has yet to touch its 200- or 50-day MA. Watch for buyers on a test of the latter averages (higher volume would mark accumulation). The NASDAQ 100 was less fortunate as it closed at new near term lows - going beyond its measured move target down. and below all three key moving averages (20-, 50-, and 200-day MA). Compounding weakness was a move below the bullish zero line by the MACD trigger line and the bullish mid-line in slow stochastics. What happens here will depend largely on what the Sox does at its 50- and 200-day MA which lies only a few points below Friday's close. The larger cap Dow and S&P are shaping sideways trading patterns. The former moving between 10,260 and 10,430, and the latter between 1,188 and 1,205. The Dow's trading range has occurred inside fibonacci retracement while the S&P range occurred right above it. Based on fibonacci, the pullbacks in each index are bullish and should break to the upside. Buying a break of resistance would allow one to take advantage of such a play. Buying support with a tight stop would be lower risk but more prone to whipsaw. The most bullish index, the Russell 2000 managed to return to the upper range of its prior week sell off and looks poised to break to new highs. Look for small caps to out perform - although new bull rallies are lead by tech stocks, and techs are looking the weakest of the indices.

Breakout targets: none

Breakout failures: MFC which featured for Feb 11th and June 22nd hit its stop intraday but closed with a bullish hammer. This still looks in good shape so stops at $47.29 would give it long side merits - but for the purpose of my analysis its a 'stop loss'.

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