30th:Heavier volume selling featured in all markets.
The NASDAQ and NASDAQ
100 escaped relatively unscathed, although the Sox continued
to weaken in a manner suggesting further downside for the tech
indices. The S&P was
similarly lightly wounded, but the Dow had
a rougher day, closing at support of the broadening wedge. Falling
oil prices (oil failed a test of its 50-day moving average) were
not enough to support a market concerned by declining consumer
confidence. Weak holiday sales will further dampen consumer
spirits, aided by a dollar in
freefall, although a here rally should come sooner rather than
later. Everybody appears to be looking to Friday before deciding
what to do. What this sets up is a tight coil - and once this
unravels it will bring about it a substantial move. Below is
a sample of Breakout stocks on the move.
Breakout failures: SKO featured
on Nov 8th hit its stop. Yesterday's XING didn't
get out of the blocks. CBST featured
on Nov 24th also hit its
stop. Note how all three failed breakouts featured in November
- a sign of a tired market.
Breakout targets met: none
29th: Volume returned, but market direction did not.
Investors and traders are likely waiting for the GDP and jobs report before
acting. The NASDAQ and NASDAQ
100 traded flat on the day. The Dow eased
in early afternoon trading, but rallied into the close - holding
support of the broadening wedge. The S&P remained
inside its narrow trading range. However, the volatility
index is providing a warning for change; the bullish divergence
in the CCI is shaping a bottom which will bring some edginess
to the markets.
A couple of current gold member
plays made continuation moves. PARL featured on September
27th with a price target of $19.34. IIIN broke resistance on
heavy volume, the stock featured on September
28th but clipped its stop on the subsequent decline.
Breakout failures: CLFC featured
on Nov 17th hit its stop
for a 3.8% loss, but ended the day on a bullish hammer. CLE hit
its stop after a big gap down, reversing a prior 20% gain for an
8% loss - the stock featured on July
Breakout targets met: CNR featured
on Sep 30th continued its
rally to $1 resistance, closing above the price target for a 33%
gain. FMC featured
on July 29th reached its
target for a modest 14% gain. GIGM met
its target on Friday for a 32% gain, eventhough the stock closed
down today the stock remained over its target price. NG featured
on Sep 1st reached its target
for a 39% gain. PRM featured
on Oct 18th reached its target
for a 19% gain. RMBS featured
on Nov 15th for a 24% gain.
28th: Light holiday volume is disguising some toppish
action in all markets. This in itself is now bad thing, overbought
conditions need to weaken through retracement, or sideways action
- the question is where will support kick in? And once it kicks
in, will the markets be able to rally to new highs? Looking at
the weekly charts we have a breakout in the S&P, but are
still waiting for breakouts in the Nasdaq and Dow. Potential
upside projections are relatively easy to draw, although in the
case of the Nasdaq I would use the former rising channel line
as new resistance.
On the stock list, mining stocks
gained (especially the silver mining stocks, ie. SIL and SSRI)
as the dollar continued
its freefall; a point-n-figure target for the dollar index is 77,
some 5 points below where it sits now. The point for a rebound
will likely coincide with the break of a bearish wedge in silver prices
(and a potential bull trap in gold prices).
Other stocks to watch on Monday for the bulls include ENWV -
prepare for a breakout, GLNG -
nice volume buying spikes, IIIN -
counterbreaks a breakdown, USU -
a bullish pennant below resistance, ERES -
breakout after a lengthy decline. For the bears, NT is
looking weak on a bearish evening star. Of the member picks DROOY has
put in a bullish morning star at support, but technicals remain
weak. ELGX -
bullish correction complete? Watch for follow through upside tomorrow. OS -
break of resistance, but also note bullish break in MACD. Penny
junior gold, GSML has
bullish merits following Friday's unusual volume. Swing traders
can look to penny stock, WLSF.
Breakout failures: none
Breakout targets met: IPSU featured
on July 13th closed for
a 30% gain. Gold members should
note a higher price target (and stop price) for this stock.
24th: Problem solved with respect to uploading. Holiday
trading has left the markets unchanged since last week. I will
update on the weekend, but it will be next week's action which
will define the true position of the market.
22nd: I am having problems uploading files to my server
from my PC using Dreamweaver MX. The error is "Dreamweaver
cannot determine remote server time". From what I understood
by Googling is that it relates to the XYIZNWSK in the Dreamweaver
.EXE file and how it obtains the time stamp from the server.
I edited this from upper to lower case using a HEX editor as
some have suggested, but I still have the same problem. I can
still pull files onto the server from my PC (hence this message),
but this is very tedious - especially as I keep charts in different
directories (having to upload from each individual directory).
I won't be able to get Macromedia support until after Thanksgiving.
If there is anyone who knows what is causing this can they drop
me line. Gold members will continue to recieve the daily list,
and the breakout page will be updated daily using the tedious
method. Market commentary updates will be limited to the Stockchart
Nov 17th: Next
update this weekend. My level 2 Chartered Market Technician exam
is this Saturday.
Breakout failures: none
Breakout targets met: none
16th: Profit taking continued, but losses were moderate.
Earnings disappointments gave
no reasons for the bulls to step in, and are unlikely to do so
for another couple of weeks. Some scrappy trading to look forward
Breakout failures: BCON
featured on Sep 24th, and
RCG featured on
Breakout targets met: none
Nov 15th: Profit
taking kept markets in a sideways trading pattern. Days like this
will relieve overbought levels and provide opportunities for investors
to put their procedes back to work. The only market to made a notable
move was the Philly Sox.
The market to watch is the S&P.
The index ended on a bearish harami cross (one of the more reliable
bear signals). There is also a hint of a bearish divergence in the
MACD histogram with a stronger bearish divergence developing in
on-balance volume. Although gold
hobbled to new highs, the mining
sector reversed recent strong gains. There are a number of decent
short candidates here, including CDE,
gapped down, but rallied in late afternoon trading. The bearish
gap overrules the bullish hammer - but watch for a gap up tomorrow.
Oil will take a few weeks to work a base, any bounce from here will
be short term.
Breakout failures: none
Breakout targets met: BPO
featured on July 12th reached
its price target for a 20%, it closed over its stated price target.
Nov 13th: Markets
continued to charge up - look at the weekly charts above, each market
ended on the very bullish three
white soldier pattern. A correction at this point could retreat
as far as the open of the second candlestick and still remain bullish
in the longer term. For the Dow
this could mean a move back to 10,000. This won't be a time for
shorts to write blank checks - bullish retracements can slowly kill
shorts as downside expectations aren't realised. What about the
immediate picture? The NASDAQ
100 exceeded upper resistance of their channel lines, this marks
new breakouts. The upside target is the width of the channel added
to the breakout price. This would bring the NASDAQ
to 2,150 and the NASDAQ
100 to 1,620. The guiding Sox
index closed at new three-and-half months highs, but unlike the
broader averages it remains mired in a correction. There needs to
be much more upside here before the tech indices can push higher.
In the remaining markets, the Russell
2000 is well on its way to its measured bull move to 669. For
we have a target around 11,100 and the S&P
to 1,230. All are heavily overbought - but rallies can keep markets
overbought long before their corrections set in. Bears will look
to the small hammer in the volatility
index to spark fear in the markets? This may be so, but it will
be a bullish retracement and not a bearish breakdown. Secondary
are firmly in the bullish court. Excellent source reading on their
importance can be found here.
The table below shows the returns
from successful breakouts as they relate to their Investor Business
Daily ranking. I have not expressed the number of successful
returns as a proportion of the total number of stocks ranked.
Number of stocks ranked
Nov 12th: Update
to follow. A quick look at my breakout scan shows plenty of extended
moves, but very few decent set-ups. As rallies develop different
candidates from new sectors breakout as the original movers start
to consolidate. This time there are few new breakouts, just old
Breakout failures: IFOX
featured on Sep 3rd hit its
stop for a 7% loss. LTON
featured on Oct 13th is breaking
from a base following a gap down - hitting its stop in the process,
but higher prices look likely here (potential bullish island reversal
if there is a gap up on Monday).
Breakout targets met: APCS
featured on Oct 11th reached
its target for a 28% gain. CWTR
featured on Aug 27th reached
its target for a 23% gain. USG
featured on Sep 16th reached
its target for a 76% gain.
Nov 11th: No
updates or breakouts for today. Normal service will be resumed at
Nov 10th: We
have a fight between the bulls
and the bears.
The markets have expressed that with some very tight trading. CSCO
but the markets held up in the morning. Then the Fed mumbled a few
words and the markets liked that, then changed their mind and decided
they didn't like it. The end result was a flat day, but there was
big shift intraday over the last hour of trading. Volume picked
up as the majority went with profit taking as the order of the day.
The big hit came to the Sox
which lost its earlier breakout above its bullish ascending triangle.
This wasn't expressed so much in the tech indices [NASDAQ
100], although today's higher volume will go down as distribution.
couldn't looks an easier shorting opportunity, and because of this
I would be very wary of doing so. When things look "obvious"
and the crowd reacts as such, it is usually the "crowd"
who are wrong. The bigger question is, who is manipulating the markets
this way? Perhaps the easiest market to read is the Russell
2000. There is no doubt here about the rally. Corrections are
inevitable, but I would be buying this index on a pullback (or member
stocks of the index). Remember - small caps lead rallies, large
caps are last to react - so don't expect the Dow
to answer your prayers. What of volatility?
Its bang on support at the 'extremes' of greed - but 18 isn't zero
which means this could drop further - could this trigger a panic
buy (ie. a blowout top)? Another reason not to short just yet -
but if we do see big gaps and bullish consensus no matter where
you turn then can you can start loading up on the puts.
Breakout failures: TVIN
featured on Sep 2nd and Aug
24th hits its stop after falling a 3 cents shy of its upside
target (the stock was featured at $4.96 and $5.70, ran to $6.71
before retreating to current levels). The stock gapped down today
for a respective loss of 14% and 5%. BFLY
featured on Nov 8th and gapped
down big today.
Breakout targets met: GRA
rallied strongly on heavy volume, moving well past its stated price
target of $13.95. This was still good enough for a 93% gain. The
stock was featured on Aug 27th
and again as a gold member play on Aug
17th for a 129% gain. LOJN
featured on Sep 1st reached
its target for a 19% gain.
Nov 9th: CSCO's
did not disappoint as much as they could have, but this didn't prevent
a mild AH sell
off in the stock. Futures
have held up reasonably well, partly offset by stronger GT earnings.
Technically, the tech indices [NASDAQ
100] sit at resistance. The sequence of small real candlestick
bodies marks indecision. Bears will be itching to go short, but
Bulls will be ready to pounce on a move over June highs - but neither
wants to make the first move. The NASDAQ
100 is just over June highs, but remains vulnerable to a bull
trap (ie. a close below 1,520 support). Given CSCO earnings I would
watch for the bears to attack in force - if they fail to drive prices
lower on heavier volume then prepare to back up the truck. The Russell
2000 and S&P
are well above June highs and a correction in these indices should
find support here. The Dow
is the most interesting market to watch over the coming days. It
experienced the fastest of rallies, similar to that of March - but
is now stuck at September resistance. If you take a glance at the
Dow in March you will see what happened in the weeks that followed.
Breakout failures: YPNT
featured on Oct 21st.
Breakout targets met: none
Nov 8th: Markets
starting to churn at resistance. Fed comments and CSCO
earnings this week likely to weigh heavily, when is the last time
CSCO reported good news for the market?
Breakout failures: TGC
featured on Oct 14th hit its
stop - but ended the day on a bullish doji. WITS
featured on Sep 20th hit its
stop for a 12.64% loss.
Breakout targets met: CDIS
featured on Sep 27th reached
target for a 17.87% gain. FHRX
featured on Sep 13th reached
its target for a 28% gain. LSTR
featured on Oct 15th reached
its target for a 14% gain. OLG
featured on June 9th reached
its target for a 53% gain.
Nov 5th: The
joined the party and broke from its own channel downtrend but stopped
right on resistance of the September reaction high. Similarly, the
tech indices [NASDAQ
100] sit at resistance of a rising channel off August lows.
remains relatively lacklustre compared to the rate of ascent in
the tech averages - simply compare the level of the Sox
now to that in September and you will see how much work needs to
be done to bring things even with the NASDAQ
100. Given the extent of the bullish momentum over the last
couple of weeks it would perhaps be prudent to take (some) profits
off the table with the intention of jumping back in once new yearly
highs are made. One index that does qualify in this regard is the
But even here the rally from 1,090 to 1,166 needs a breather so
watch for pullback opportunities in S&P
Value players should look to
some of the metal stocks, GSS
in particular looks reasonable at near term support. Consolidation
breakouts in PAAS
could be worth a punt. On the fallondpicks.com list keep an eye
as it works towards resistance - some nice buying here. CETV
looks a definite sell and potential short sale based on erratic
trading on high volume. CSTR
sits at resistance of a broadening wedge - its close to a break
of $27.50 but there are reasons to sell too. IBAS
will soon break $2.70 resistance, continuing a long standing rally.
on the watch list for a bullish flag break. Short players may want
to take a look at HURC
- the last four days of trading have been weak. Lovers of SBAC
should watch for a break of $8.45; buyers and sellers are fighting
it out on declining volume just below $10 resistance, who will win?
has broken a triangular consolidation on higher volume with improving
technicals, looks a good buy for this breakout play. GRA
lies a few pennies short of our price objective, one of the best
performers on my list, it first featured on June
4th at $3.87, and again on Aug
27th at $7.24. SIMG
is another stock on the verge of a breakout. SNIC
took a dive after weeks of steady advance - time to sell. QCOM
looks another potential short candidate, a big island reversal left
in its wake.
Nov 4th: Breakouts
following the Russell
2000 yesterday. Bearish candlesticks in NASDAQ
100 negated, but not quite the breakout yet. The Dow
is on the verge of a breakout of its own.
Breakout failures: ASTM
featured on Oct 21st. AUDC
featured on Sep 14th, and
Nov 2nd. PXT
featured on Nov 1st.
Breakout targets met: PFCB
featured on Sep 30th hit its
target for a modest 11% gain.
Nov 3rd: Bush
victory brought what the market wanted, but ended up "selling
on the news". The tech indices suffered most, both NASDAQ
100 closing on bearish black candlesticks on higher volume.
Larger caps gained on the GOP victory, both S&P
closing up, the former index closing above near term resistance
but still a few points short of the last reaction high in June.
Should 1,146 break in the S&P
then I would expect the tech indices to soon follow (and eventually
New rallies are lead by small caps and the Russell
2000 did not disappoint as it comprehensively sliced past resistance.
The seeds have been sown, we now need the rain to fuel their growth.
Watch for breakout leaders over the coming days.
Breakout failures: AXYX
featured on Oct 19th closed
for a 10% loss. PSTI
featured on Oct 8th closed
for a 5% loss. KOOL
featured on Oct 26th hit its
stop for a 3% loss.
Breakout targets met: KOSP
featured on Aug 6th closed
for a 26% gain. SBAC
featured on Aug 2nd is well
above its price target for a 68% gain. TRGL
featured on Sep 27th reached
its target for a 27% gain.
Nov 2nd: The
election ball is off and rolling and the markets experienced the
'what ifs' from both sides of the coin. Continued enthusiasm for
a Bush victory pushed markets higher before rumors of a potential
Kerry victory in Ohio
sent markets crashing in late day trading. Irrespective of who wins
it will be the fact that someone wins which will fuel the next rally.
Rapid losses from a (surprising) Kerry victory should be viewed
as an excellent buying opportunity. Bullish corrections involve
short, sharp shocks, similar to what we saw today. I would look
for the correction to last 1-3 weeks before the big bounce (and
an end to the year long congestion) begins. The NASDAQ
100 remained resilient, with an intermediate bullish trend still
in place. The NASDAQ
100 is closest to ending the almost year long decline so it
should not be surpising to see weakness as resistance is tested.
The Philly Sox
underscores the strength in the tech averages. The Sox's
MACD trigger line breached resistance and sits at new 6-month highs,
as its ADX rises in confirmation. The S&P
continues to pressure resistance while the Dow
still fumbles for a bottom. The volatility
index could provide the biggest clue as to what will happen over
the coming days as it looks primed for a sharp rally, the spike
in fear may run in conjuction with a Kerry victory. Where can value
be found? Look to the small
caps - a potential cup-and-handle pattern is developing, look
for leaders in members of the Russell 2000 index.
Breakout failures: COPY
featured on Oct 5th. NTGR
featured on Oct 29th. DJTC
featured on Oct 26th.
Breakout targets met: none
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