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Sep 29th: Window dressing by funds into the end-of-quarter? Or bullish buying by investors tired with the markets malaise? Positive comments from analysts and the government helped push markets beyond resistance. Technically, the days gains counted as a short term 'buy' signal in tech [NASDAQ and NASDAQ 100] and small cap [Russell 2000] markets. But one day does not a rally make. With respect to the stocks I feature we need to see the secondary indicators [$NASI, $NAA50 and $BPCOMPQ] in concert before we can consider the probabilities favored for buying.

What of these indicators? The $NAA50 was the first to shift positive, but this has not been unusual for this indicator over the last month. The MACD trigger line sits very close to a 'buy' signal and a break of a 4-month bearish divergence which would be more favorable for marking a bottom. Next up is the $BPCOMPQ. It sits 0.14 points away from a bullish crossover of its 5-day MA and a MACD trigger line signal. The +DI/-DI line remains some distance from a bullish signal but that is the most bearish aspect of this indicator. The $NASI is the most bearish of the three indicators but even here the MACD is close to a 'buy' signal. The +DI/-DI line is widely diverged and will need more days like today in the market to switch this positive. Again, this indicator will likely be the last to switch positive.

As for the markets. The Dow closed over all three of its moving averages (20-, 50-, and 200-MA), but remained contained by a declining resistance line (solid blue bar on chart). The S&P closed over the 20- and 50-day MA on a second day of accumulation in a row. But like the Dow it hasn't fully cleared resistance of its own. The tech markets [NASDAQ and NASDAQ 100], including the semiconductor index, did make clear moves past resistance on higher volume. This ranked as a clear 'buy' signal on a day of accumulation. The 20-day and 50-day MA was breached in the NASDAQ 100 but not in the NASDAQ or the semiconductor index. Next up is the Russell 2000 which is only a notch away from its 20-day and 50-day MA, but like the tech indices did break declining resistance. What does all of this mean? Focus on small cap tech stocks over the coming days, bullish breakout leads are likely to emerge from this sector. Of the larger caps - stick to NASDAQ 100 stocks.

Breakout targets met: NGAS hit its target after some heavy volume churning. The stock featured for September 16th as a Breakout. The stock closed for a 56% gain.

Breakout failures: EMMS disappointed on earnings and took a dive through its stop price. The stock featured as a breakout for August 23rd. It closed for an 8% loss. LJPC featured for June 6th and closed for a 11% loss after a prolonged sideways trading period. Further losses look likely in this. SYK broke a 2-week consolidation to the downside but this following an earlier drop from $56 highs. The stock featured for July 21st and closed for a 7% loss.

Sep 28th: More of the same as bears kept a lid on bullish attempts to rally. The tech indices [NASDAQ and NASDAQ 100] logged their second distribution day in a row as resistance held firm. The semiconductor index gave a hint of what may follow as its MACD trigger line made new near term lows. The earlier breakout in this index still holds - but it may not last if the MACD continues to decline. The large caps [S&P and Dow] managed to score an accumulation day, although both indices ended the day below resistance. However, bulls will look to the breakout of on-balance-volume in S&P to lead a break of 1,219 and potentially beyond. But at this stage it is the only indicator favoring the bulls.

Breakout targets met: none

Breakout failures: AMHC hit its raised stop following the second day of heavier selling. Note new near term lows in slow stochastics - it looks set for a longer consolidation and further downside. The stock most recently featured as a Breakout for April 6th and again for August 3rd in 2004. The August trade closed for a 45% gain and the April trade closed for a more modest 16% gain. KNBT suffered a solid day of selling after days of listless trading. The day's low volume losses were enough to hit the stop price. Only the 200-day MA remains as support. The stock featured as a breakout for August 24th and closed for a 4% loss. The Gold Member pick for June 23rd closed for a small 4% gain. Gold member short play ARG hit its stop in early morning trading. The stock featured as a pick for September 21st and closed for a 6% loss. ANGO hit its stop after two days of heavy selling. The stock featured for June 7th and July 11th and failed to build any meaningful rally. The stock closed for a 6% and 12% loss. COHU was the recommended stock for yesterday but had a miserable day to close with a 5% loss.

Model portfolio: PTEN added

Sep 27th: Bulls suffered much the safe fate as today's consumers. Resistance in all markets held with the sole bullish survivor, the semiconductor index, on the verge of reversing its recent breakout. Even the $NAA50 retreated in fear as it flipped back in favor of the bears. The S&P is perhaps the index in the most trouble as it has spent the last four days going nowhere wedged below 1,219 resistance. The tech indices [NASDAQ and NASDAQ 100] were the only indices to suffer distribution days, but this was insult to added injury to the days trading. Greenspan's comments were not enough to calm the markets although it looked for a while like he might have succeeded. Wednesday is another day - but bulls will be looking to it with fear.

Breakout targets met: none

Breakout failures: XEL clipped its stop (because of the ex-dividend price) although it ended the day on a small doji. If still holding a revised stop could be placed at $19.19. It featured as a breakout for September 19th. It closed for a 2% loss not including the $0.24 dividend. IYK was a Gold Member pick from September 26th which moved 2 cents over its stop as the high of today. It was enough to stop this play out for a 1% loss although the play remains bearish.

Sep 26th: The semiconductor index managed to break resistance but did so on a weak doji. The NASDAQ struggled to hold the morning's gains as it closed lower on lighter volume. Bulls will likely not get excited until the 20-day, 50-day, and head-and-shoulder neckline is breached. The NASDAQ 100 is in a similar predicament as it failed its first test of trendline/neckline resistance and the 20-day MA. Tomorrow is another day but aggressive buys on a break of 1,589 would have merit with a stop on a loss of 1,564. The secondary indicators paint a brighter picture. The $NAA50 switched once again in favor of the bulls but I would wait for a confirmation break of the bearish divergence in the MACD trigger line before getting too excited. Probably more interesting was the gain in the $BPCOMPQ. It hasn't yet switched in favor of the bulls but it is in a position where a sizable bounce would not be unreasonable (this indicator has reached the dizzy heights of 70+ before and at current levels of 50 would have room for a decent length rally). The spanner in the works remains the Summation index ($NASI). When this switches positive, assuming the $NAA50 and $BPCOMPQ stay/do likewise, we will cover our September 16th short position in the ETFs and again fish in favor of Breakout stocks. Volatility continues to languish at deeply oversold levels and this could prove problematic if fear permeates through the market. Large caps got a taste of moving average resistance. Buying enthusiasm in the Dow faded as it approached the first of the moving averages at 10,524 (20-day MA). Another run at this average would give me more confidence as it is typical for bears to continue the selling into the following trading session, leading to a break of the days lows (10,410). The S&P struggled to close above 1,219. The day's doji marks indecision and the lower volume confirmed the lack of interest from both buyers and sellers. Bulls will look to a break of the 20-day MA (1,224) before going long. The small cap Russell 2000 ended Monday nestled against resistance - further gains Tuesday would complete a breakout and tradable long signal. Cautious buyers may wish to wait for a close over the 20-day/50-day MA (665).

Breakout targets met: none

Breakout failures: none

Model Portfolio: NTRI added.

Sep 24th: Will bulls get a boost on Monday now that Rita has passed? Damage was not as bad as feared but a clean up operation will take time to complete. Markets closed Friday flat to slightly up on light volume as traders positioned themselves in favor of a positive outlook to Hurricane Rita. Now the worst has passed we could see some additional buying on Monday, but it will be the volume which accompanies such a move which will be important. The NASDAQ 100. managed a second accumulation day in a row and could be the leading index to watch next week as the semiconductor index rubs against near term resistance. Secondary indicators remain firmly negative, and even if we do see a strong start to the week it will likely take a string of positive days to suggest the market is in a position to build a more powerful rally (more than just a relief rally). Another aspect in the markets favor is a reversal head-and-shoulder pattern in crude oil prices. A break of the 50-day MA would likely see a move to the projected downside target of the 200-day MA.

Breakout targets met: none

Breakout failures: TPC hit it stop but ended the day on a bullish doji. It featured as a Breakout for September 2nd and July 15th. It closed for a 14% gain and a 10% loss respectively.

Sep 22nd: Bulls staged a low grade comeback as Hurricane Rita dipped 5mph below a category 5 hurricane to a category 4 hurricane. Not all traders took the bait as volume came in lighter with the exception of the NASDAQ 100. The hurricane looks to be heading towards the Texan-Louisiana border as of 3:00am ET (Sep 23rd). The market is certainly not one to be buying for the longhaul. Short term traders could be looking for moves to the 20-day MA of the respective markets - but its an aggressive trade. Support of 10,400 held in the Dow, 2,110 in the NASDAQ, 650 in the Russell 2000, and 457 in the semiconductor index. Bears will look to the break of near term support in the $BPCOMPQ as a confirmation of the deteriorating market conditions.

Breakout targets met: none

Breakout failures: AGE featured as a Gold Member pick for August 26th and as a Breakout for September 2nd, hit its stop after earnings disappointed. The stock closed for a small 1% gain on the Gold member feature. AH hit its stop but ended the day on the bullish hammer. The company had recently announced an improved body armor order. Current long holders could use a modified stop at today's lows ($39.36) as a 'last chance' for the stock. For my purposes it is considered a stop hit. The stock featured as a Gold Member pick for May 12th and as a Breakout for June 14th and August 12th. The Gold Member pick closed for a 14% gain. ELON suffered the fourth day of selling in a row, the last day of selling was enough to hit its September 8th stop. The stock also featured as a Gold member pick for July 21st and closed for a 4% gain. FORD has entered a sequence of lower highs and lower lows. The stock was up slightly after hours but the days trading was enough to hit its stop. The stock featured as a Breakout for September 9th and as a Gold Member pick for July 26th. RTSX first featured as a Breakout for April 5th and again for June 20th and September 13th. The stock also closed on a bullish hammer and a revised stop could be placed on a loss of $27.30. The original featured closed for a 31% gain, the June feature for a 9% gain, and the September feature closed for a 11% loss. BIIB was a Gold Member featured for August 10th failed to build on a move to close its February breakout gap. It closed for a 6% loss. SLNK managed a large one-day reversal but not before it dipped to hit its stop. The stock featured as a Gold Member pick for September 20th and closed for a 8% loss. TRAD was another Gold Member pick for September 19th, suffered its third day of losses to cut below near term support and hit its stop for a 5% loss.

Sep 21st: Another day, another set of losses. As Hurricane Rita tests the fear of traders (and they say trouble comes in threes - what's next?) there was little willingness to jump in and support the market. The NASDAQ is in the process of developing a sequence of lower highs and lower lows - look to the NASDAQ 100 and semiconductor index to follow suit. The last bullish vestiges in the large cap indices were blown away as the Dow closed at new lows and the S&P racked up another distribution day. Apparent in all the indices was the bearish candlestick combination 'three black crows'. Normally, the trade practice is to short a move to the open of the second candlestick and set a stop at a high of the first. Aggressive players may look to buy the lows for a move to the open of the second candlestick - but there is nothing to say this can't go lower Thursday. The days selling triggered a number of Breakout and Gold member failures as others remain precarious and likely to fail over the coming days. Moving to cash remains the theme.

The secondary indicators kept with the bearish theme as the $NAA50 lost a six-month support line as its MACD trigger line switched to a "sell". The $BPCOMPQ also triggered a "sell" in its MACD as stochastic's entered oversold levels.

However, there is so much negativity out there; $5 gas, the "third most intense storm ever", Iraq rumblings, Bush's declining popularity - even amongst Texans - that contrarians could be preparing for a big rally. Technically, such a rally would take a few days to confirm but should it do so it could make for interesting times.

Breakout targets met: none

Breakout failures: ABCO breached near term support and hit its raised stop on the second day of heavier selling for the stock. The stock featured as a Gold member pick for March 4th, and as a breakout play for May 9th and June 10th. ACAD never made past a day on yesterday's feature. The stock clipped its stop, stopping the September 2nd Gold member position too. AVX featured as a Breakout for July 27th. After rallying for a short period it gradually eased back to break near term support on Wednesday's close. FCN featured as a Gold Member play for August 1st, and as Breakout for April 29th and September 13th. It hit it's stop in line with market weakness as did ORBK from July 29th and as a Gold Member pick from December 16th and July 11th. The stock closed Wednesday below its 50-day MA. STMP was a residual decliner from April 27th. The stock reached highs of $23.37 in late May before marching below its 50-day MA and below its stop price. VRNT was a Gold Member pick for September 9th. The stock did manage to close at support but not before an intraday move hit the stop price. UBET was another stock to hit its stop on an intraday move. It featured as a Gold Member pick for September 14th.

Sep 20th: The pessimists took the day as Alan Greenspan raised interest rates once again to 3.75%. This was enough to trigger a breakdown in the (top) reversal head-and-shoulder pattern of the NASDAQ. Watch for a similar loss of support in the NASDAQ 100. Both tech indices racked up distribution days. The tech indices were not the only markets to suffer. The Dow cut below all three of its key moving averages; the 20-, 50-, and 200-day MA. Its only saving face was the relatively modest volume which accompanied the move and the potential for a bounce from support of a broadening wedge - although if the latter is to play to form the Dow will have to close higher on Wednesday. The Russell 2000 lost its 20-, and 50-day MA as technicals all turned red. It is now looking at the 200-day MA for support which lies some 27 points away. The S&P painted a similar picture as it lost is 20-, and 50-day MA. It's 200-day MA lurks some 23 points away, although as with the Dow it may find support at a broadening wedge of its own. The large cap indices are the only markets to show net bullish technicals, although these weaken by the day.

The secondary indicators do not hint at a bullish reversal anytime soon. The NASDAQ summation index ($NASI) fell, further strengthening its bearishness following yesterday's loss of near term support. The Bullish percent index ($BPCOMPQ) dropped as its -DI line crossed above the +DI line as the MACD switched to a "sell". Finally, the whipsaw friendly $NAA50 showed little indecision and fast approaches a 6-month support line. Bears loving it here and could it even more if bulls decide to take a break on this market. Hurricane Rita will keep bullish powder kegs dry until it passes.

Breakout targets met: none

Breakout failures: NEXM has been selling off hard since news of its licensing to Novartis was released. The stock featured as a breakout for July 19th and September 13th. URS hit its stop after reversing its recent breakout. The stock featured as a Breakout for September 12th and June 8th. FRC was a Gold Member oversold/support play which cut below its September 14th lows. LU hit its stop after failing to push past $3.25. It featured as a Gold Member pick for September 8th. PBG gapped below its stop price, slicing through its 200-day MA, following an analyst downgrade on the sector. The stock featured for July 8th.

Sep 19th: If today's action is any indication of what tomorrow will bring then the bulls were not very optimistic, and a rate hike can be expected. It will all boil down to what Greenspan says but given the uncertainty there is little reason to be buying the market. The 20-day MAs of the various markets held for another day, although the $NASI loss of near term support (-138) could come back to haunt the market; the implication been worse is to come. Not surprisingly, the whipsaw prone $NAA50 swung back in favor of the bears but I would discount the swings in this indicator until there is a break of near term resistance (1,159) or near term support (934) of this indicator. One thing which may become apparent over the coming days is a potential bearish head-and-shoulder pattern in the NASDAQ; watch for a break of the black hashed line which represents the neckline. A similar pattern could develop in the NASDAQ 100, although the angles are little steep for a clean pattern.

Breakout targets met: none

Breakout failures: GR was stung by Northwest's bankruptcy. The stock featured as a breakout for April 29th, July 8th, and August 18th. EFX was a Gold Member play which never made it out of the gates, it registers as a 2% loss. IDT failed to hold its consolidation, losing $12.75 support. It featured as a Gold Member pick for July 28th. The stock closed for a 3% loss. MHK was another oversold play to hit its stop price. The stock featured for August 30th. The stock closed for a 2% loss.

Sep 16th: Volume surged on option expiration as markets gained on XOM and INTC upgrades. But all that glistened was not gold - and gold certainly shone as a number of miners breached resistance as the base metal continued its recent upward run. Silver breached three-and-a-half month resistance following an earlier bear trap. The ETFs probably say more about the state of the market than the parent indices. The DIA sits some 50 cents away from a break of resistance. Volume disappointed when compared to the Dow, similarly to that of the QQQQs and the NASDAQ 100, and the SPY and the S&P. The likely cause of the days bounce was the presence of the 20- and/or 50-day MAs. Technically, bears won the day. All three technical indicators in the NASDAQ sit in the red which contrasted with the days volume. Resistance in the MACD trigger line held for both the Dow and the NASDAQ. The secondary indicators, $BPCOMPQ and $NASI, ticked down - holding Thursday's bearish reversal as the whipsaw king, the $NAA50, switched back in favor of the bulls, although the +DI/-DI line and CCI of the $NAA50 are still bearish. The Fed meeting looms large on the horizon. Move to the sidelines and wait-and-see what Greenspan does on Tuesday.

Breakout targets met: none

Breakout failures: ARRS was caught out by a sellers stop loss whipout. The stock featured as a breakout for April 29th, June 22nd, July 28th and September 7th. The stock closed for a 46%, 20%, 8% gains and a 8% loss. CPST gapped down on heavy volume, reversing the recent breakout. The stock featured as a Breakout play for August 25th and closed for a 22% gain. CAMP featured as a Gold Member pick for June 16th and a Breakout play for August 3rd. The former closed for a 10% gain, and the latter a 7.5% loss. The Gold Member pick, EFX, hit its stop after moving above near term resistance for a 2% loss.

Sep 15th: Well, the $BPCOMPQ finally fell to the bears bringing all three secondary indicators to their knees. It is not all doom-and-gloom though; the NASDAQ did close below its 20-day MA, but any strength on Friday will likely keep this index above this moving average by the weeks close. The remaining indices are all above their 20-day MAs, so if holding longside ETF positions one could stay long until there is a confirmed close below this average (i.e. on an end-of-day close). However, I am recommending a move to cash until the Fed decision works its way through the market. Expectations are for a bounce, but if the bounce runs out of steam - or worse still, there is no bounce - markets could turn ugly fast. One thing to keep an eye on is the volatility index. It looks poised to rise (from deeply oversold levels), which will bring a surge of volatility and fear into the market. Highlighting the return of the bears, a number of Breakout and Gold Member picks fell by the wayside (see below).

Breakout targets met: none

Breakout failures: ARIA closed on a bullish doji but it was not enough to save this one from hitting its stop price. Still has longside merits/buy if the doji holds - place new stops at $7.29, but for my purposes its a stop loss sell. It featured as a Breakout play for August 24th. BOO suffered its fourth day of selling in a row which was enough to kill this position. The stock featured as a Gold Member pick for July 19th and as a Breakout play for September 9th. GLW finally succumbed to the bears after a very successful run. Indeed, with the stock at the 50-day MA it could still bounce, but for my purposes its a stop loss sell. The stock featured as a Breakout pick for April 21st, June 15th, July 28th, and September 7th. The latter closed for a 2% loss. The former trades closed for a 58%, 21%, and 3% gain. HLEX hit the stop at the very low of today. The stock closed on a weak hammer - technicals continue to weaken - stop loss sell. The stock featured as a Breakout play for June 24th and August 2nd. LWSN got whipped out on a stop loss whirlwind on light volume. The stock featured as a Breakout play for August 24th and September 9th. WAVX managed to rack up a 34% gain but gradually fell back as profit taking took hold, Thursday's swift move down triggered its stop price. The stock featured for July 25th. MDRX was a Gold Member pick for June 29th and September 8th continued its sequence of recent declines to hit its stop. BOH was another Gold Member pick from May 2nd and September 7th. The stock reversed a recent breakout and closed at new near term lows - has short side potential for a move to $45. ESST was an oversold Gold Member pick for August 30th. Thursday's large bullish hammer looks a good "Buy" - but if you held the prior position it would have been stopped on today's action. EZPW featured for September 13th but got stopped out on Thursday's action. SONO switched from a longside stock, to a potential short side play. Run stops $33.51 and look for a move to $24.00. The stock featured as a Gold Member play for May 4th and a Breakout play for July 11th.

Sep 14th: Bears decided to let the rest-of-the-world know who's the Boss. All markets experienced breaks of near term support, leaving them susceptible to further declines. September naysayers will say all of this was expected and with only the $BPCOMPQ of the market secondary indicators hanging on they may have a point. Bulls will look to the lighter volume as a case of not all bears are listening.

What of the averages? The NASDAQ closed Wednesday at 20-day MA support, beyond this the next point of support is 2,119 (30 points away). Its MACD has made a picture-perfect bounce off resistance (which is not good news if a Bull) and on-balance-volume is below the 20-day MA. The NASDAQ 100 has yet to test its 50- or 20-day MA, and its MACD is on the right side of the fence at least. The semiconductor index continues to hold its breakout - which is good news for the tech markets [NASDAQ and NASDAQ 100] and the one thing which makes the tech market decline a buying opportunity. The Dow closed inside the quagmire of its 20-, 50-, and 200-day MAs. Its technical picture is mixed; a developing bearish divergence in the MACD is tempered by its earlier "buy" signal. On-balance-volume is flat (to bearish), and slow stochastics fell below overbought levels but remains above its bullish mid-line. A similar picture was painted in the S&P, only it sits further away from its 200-day MA. The Russell 2000 also failed to hang onto support - the last index to do so, but its technicals remain bullish (if only just).

As for the secondary indicators; the $NAA50 is now bearish following a crossover in the +DI/-DI line, a drop below 100 of the CCI, and a slice below the 5-day EMA. The $NASI also turned bearish - primarily on the loss of the 5-day EMA, although the +DI/-DI had remained bearish throughout the recent bounce. The $BPCOMPQ is hanging on, but unlikely to last another day of selling - Buyer beware.

What of other commentators? Ted Burge noted on Monday how point-n-figure sell signals were outgunning buy signals and how the rate of frequency in these losses is increasing. Stephen Vita remains open-minded (with a short-side slant), from what I read he is not fully onside with the September woes theory. Trader Mike sees the current decline lasting into next weeks Fed meeting given markets are not fully oversold. The Kirk Report sees tough times ahead if the Fed screws up. W Yan's first chart (NASDAQ weekly) makes for some interesting viewing - one to bookmark. Robert New noted the NASDAQ's confirmed lower high leaves the door open for more substantial declines. Keep an eye on his semiconductor index chart - watch for the direction of the consolidation breakout, which will be a key determinant of market health over the coming weeks and months.

Breakout targets met: none

Breakout failures: Gold member feature CRXL from September 12th hit its stop and looks set for further declines.

Sep 13th: Large caps [Dow amd S&P] took a slap to the face on consumer spending worries. Both indices chalked up distributions days, for the S&P this was the second day of heavier selling in a row. The tech indices [NASDAQ and NASDAQ 100] survived the onslaught, helped in part by the semiconductor index which continued to hold its earlier breakout. There are support levels to be found first of which will be the 20-/50-day moving average. Beyond that there will be August reaction lows. I will be watching the market secondary indicators [$NAA50, $NASI and $BPCOMPQ] for leads. Should these all change back to the red then our small rally will have died a death. The $NAA50 is the most volatile of these indicators and it sits only a few points away from a "sell" (the $SPXA50 did register a "Sell"). On the positive front, the current decline is a "buying" opportunity until the indicators suggest otherwise. The 20-day MA of all markets looks best bet to tie in with some GTC buy orders.

Breakout targets met: none

Breakout failures: RE had a wild day; Gapping down at the open buy closing strong. The weak open was enough to hit the stop price. The stock was a Gold Member pick for September 6th. The stock closed for a 2.45% loss. WWY featured as a Gold Member pick for July 27th. Since late August the health of this stock has declined to the point Tuesday's loss has short side merits.

Sep 12th: All markets are now showing bullish indicator strength (strength in the technical indicators usually follows strength in the market secondary indicators [$NAA50, $NASI and $BPCOMPQ], and vice versa). The tech indices [NASDAQ and NASDAQ 100] were the last to turn bullish in this regard. The heavy volume in these markets was tempered by a relatively modest gain by the end of day. Keep an eye on the semiconductor index as this should lead the NASDAQ and NASDAQ 100 given its proximity to resistance. There is a fine line between accumulation (bullish) and churning (bearish). For the tech indices the heavier volume marked accumulation, but for the S&P heavier volume had more to do with churning, especially given its proximity to resistance. The Dow also struggled at resistance, but it did so on lighter volume.

Breakout targets met: none

Breakout failures: Biggest loser on the day was GTF which featured for July 21st. The stock was creamed on disappointing clinical trials. No reason to hold this now! Also exiting stage left was BBI/B which given the prior decline and the failure to follow with some quick upside quickly fell to selling pressure. The stock was a Gold Member pick for September 6th. Ironically, it ended the day on another bullish hammer.

Sep 10th: Markets followed through on heavier volume. Large caps were the chief winners; the Dow pressured 10,719 resistance as the S&P nestled against multi-year highs of 1,245. The indices [NASDAQ and NASDAQ 100] made modest gains as the semiconductor index kept pace with its recent run, sitting 4 points from its highs. If there was anything which may keep the bulls on the edge is the lack of fear as measured by the volatilty index, but in itself is not a reason to be sitting on the sidelines.

Breakout targets met: none

Breakout failures: Gold member short play PPS bit the dust after crossing its stop price. The stock featured for August 19th.

Sep 8th: Markets consolidated recent gains on heavier volume as traders repositioned themselves in the face of recent market strength. Looking for buying opportunities while all three secondary indicators are bullish should be the name of the game. The 20- and or 50-day MA look the best bet for long positions if shopping the indices, or individual components of those indices. Semiconductors were the stars of the day as the $SOX breached resistance following a string of tests. The tech indices [NASDAQ and NASDAQ 100] should soon follow higher, particularly if the semiconductor index pushes past 486. Some of the best movers of late have come from the most heavily traded issues. INTC breached 2-month resistance on above average volume and has longside merits at Thursday's close. JDSU has been trading along $1.50 support and Thursday's volume injection could see it move upside if recent bullish momentum can continue. The bullish wedge in NT broke to the upside, watch for a retest of recent lows ($3.00) as a potential long side entry. QCOM continued a breakout begun in early July, still has merits. SIRI surged past $7.00 resistance on heavy volume and looks well set for further gains. SUNW sits on the verge of a breakout of its own (the MACD trigger line breached resistance by Thursday's close), put this on your watch list for Friday and early next week.

Breakout targets met: none

Breakout failures: Gold member short play AVT hit its stop after breaking $25.00 resistance on heavier volume. The stock closed for a 5% loss. It featured for August 18th.

Sep 7th: Finally, the NASDAQ Summation index ($NASI) crossed its 5-day EMA leaving all three tech secondary indicators [$NAA50, $NASI and $BPCOMPQ] in the green and on the "bullish" side of the market. In the short term, markets are overextended, but pullbacks from here should be viewed as buying opportunities with stops running in the 5-8% range. Whipsaw remains a threat but with proper stop management this risk can be reduced. What can the bulls expect? Given the relative position of the $BPCOMPQ we could see a rally lasting up to 7 months, but based on the $NAA50 and $NASI it is more likely to come into the 2-3 month range (a rally into Christmas?). Breakout stocks are the most likely to succeed in this environment although it could take a couple of weeks for quality plays to move (there were no great shakers for Thursday from my breakout scan).

What of individual markets; The tech markets [NASDAQ and NASDAQ 100] added modest gains on heavier volume, marking a second day of accumulation for these indices. Both indices triggered "Buys" in their MACD, with slow stochastics of the NASDAQ 100 again above its bullish mid-line. The semiconductor index continued to apply pressure to resistance which has helped buoy the tech markets. The 20-day MA looks good point of support in the latter index as it ticked upwards, a sign of intermediate term (3 weeks -3 months) strength. The Dow added another 44 points to yesterday's big gains as volume came in shy of Tuesday's. All three technical indicators (MACD, OBV, and Slow Stochastic) are now bullish following the lead of the S&P yesterday. Not to leave the Russell 2000 out - it did not disappoint even it looks a little rich in the short term.

Breakout targets met: none

Breakout failures: Short play MHS featured for July 7th hit its stop after two days of gains. Has merits on the longside with a stop on a loss of $50.00. CCCG featured as a breakout for November 10th and July 1st. The stock spent the bulk of its time in a sideways congestion pattern. The stock closed near the highs of the day but it dropped enough to hit its stop. The stock closed for a 14% gain and 6% loss respectively.

Sep 6th: A typical post-Labor day rally? The question is whether it can bring something long lasting, or fade away because of a lack of follow up demand? Best of the bunch was the Russell 2000 which surpassed the upper Bollinger band on improved technical strength (MACD trigger buy, +DI > -DI, overbought CCI, and slow stochastics above bullish mid-line). Small caps typically lead rallies and this looks to be no exception. Next up was the S&P (MACD, on-balance-volume, and slow stochastics all bullish) with its higher volume follow through of last weeks resistance break, closely followed by the Dow (close over 20-, 50-, and 200-day MA on higher volume with a MACD "buy", and on-balance-volume over 20-day MA signal line, but a still bearish slow stochastic). With the tech indices a relative laggard [NASDAQ and NASDAQ 100]. The NASDAQ closed over its 20-day MA on a MACD "buy" (bullish), but suffered a downtick in its slow stochastic with a distribution trend in on-balance-volume (bearish). Today's volume was higher - yet below average for a typical day. The NASDAQ 100 had a similar sort of day but without the MACD "buy" of the NASDAQ. The semiconductor index has kept the tech markets in check over the last couple of days although it did manage to close at last week's highs which could bode well for techs over the coming days. Technically, the semis managed a MACD "buy" which was tempered by a downtick in slow stochastic.

Again, we look to the secondary indicators for the 'clean' picture. The $NASI was the only indicator to finish last week on the bearish side of the fence and it didn't recover enough today to change that. A strong Wednesday for the market could shift my market opinion in favor of the bulls if the $NASI was to cross its 5-day EMA trigger, but I would remain skeptical as to how long such a rally would last. Although the $BPCOMPQ is above its 5-day EMA it still looks vulnerable to whipsaw. The latter indicator's slow stochastic is still in decline and has yet to reach oversold levels - not the kind of momentum from which bull markets are made. The $NAA50 has firmed its bottom, but will turn overbought (i.e. toppish) at 1,700, still some 600 points away but the current bounce is not at the kind of extreme which makes buying the market easier.

Breakout targets met: IDBE breakout target met. Featured for August 22nd and closed for a 21% gain.

Breakout failures: PRLS hit its stop price but closed strong on the day. Still has merits with a stop at $4.49 but it is considered a stop loss using my original suggested stop of $4.59. The stock featured for August 29th. FMD was a Gold Member feature for September 2nd but failed to bounce at the convergence of support and resistance. MFN was another Gold Member feature for August 25th, it closed lower but created another doji.

Sep 3rd: The lack of breakout failures (or targets met) says it all. It was a typical quiet Friday into the long weekend. Tuesday will likely set the tone for the coming weeks given the secondary indicators are poised to mark a bottom (the $BPCOMPQ and $NAA50 have triggered "buys" - only the $NASI to go). Should Tuesday close lower it would likely reverse the bullishness of the $BPCOMPQ and $NAA50. Historically, labor day Tuesday has been a good day for the bulls - we will see if it plays to form. Precious metal stocks are coming back to the fore after a failed break of resistance in gold during the early part of August and a negated bear trap in silver. Watch for new term highs in gold metal stocks. Have a good weekend (if possible).

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Breakout targets met: none

Breakout failures: none

Model portfolio: CTCH cut.

Sep 1st: Both bulls and bears took a step back as markets traded sideways for much of the day. Volume came in lighter than yesterday but heavier than recent weeks suggesting traders are lining up for the post-labour holiday week which is traditionally seen as a strong period for the market. However; the true scale of damage from Hurricane Katrina will take time to assess and this will keep markets edgy. Higher gasoline prices are a given but hardly news in the face of strength in crude oil prices in recent times.

As for particular markets; the Dow closed lower but the days action may measure as a breakout of declining resistance (blue hashed line on chart - when you visit don't forget to vote at the bottom of the screen) following Wednesday's gains. However, the index did reverse intraday at the convergence of the three moving averages (20-, 50-, and 200-day MA) and this should continue to be strong resistance. A close over these averages at this stage would be surprising and very bullish if accompanied by stronger volume. The Russell 2000 edged a little higher to reach the upper Bollinger band so a move back to the 20-day MA should be seen as a reasonable buying opportunity. The tech indices [NASDAQ and NASDAQ 100] were relatively quiet - although (unfortunately for the bulls) the semiconductor index reversed yesterday's breakout which puts price back into the prior quagmire of price congestion. On the plus side, the secondary indicator, the $BPCOMPQ, triggered a "Buy" on its 5-day MA crossover leaving the $NASI the last indicator to signal a bottom. Should this occur next week it will flip my market opinion from Bearish to Bullish.

Breakout targets met: MW surprise of surprises. A Gold Member short play which managed to reach its (modest) target for a 11% gain. It featured for August 3rd. IFUE was a bulletin board play for August 17th. The stock closed for a 39% gain.

Breakout failures: COSI dropped 7.7% knocked its stop and closed the August breakout gap. The stock featured as a Gold Member pick for August 15th. The 50-day MA looks like the last line of defence for this stock. MAC featured as a short play for August 17th but hit its stop in early morning trading. The stock closed the day weak, below its 50-day MA (critically), and still has merits as a short side play - but for my purposes it is a losing trade (1.3%). BOL was a breakout play for April 20th failed to build on a promising move, retreating back to its stop price. NOOF took a dive similar to COSI as it struggled at its 200-day MA. The stock featured as a breakout for August 17th and closed for a 6% loss.

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