The table below shows the performance of breakouts since the beginning of the rally. The Follow-Through Day was December 20. What we like to see is many stocks showing 20-25% profit or more giving us a chance to meet normal profit targets for a purchase. Only INVN meets this requirement. The rest of the stocks are trying to get there. In a normal CANSLIM rally we should have already seen a sizeable fraction of the stocks in this harvestable position. It appears to me that the indices are looking more like a good rally than the action of stocks with good fundamentals. So this is a tradeable rally so far but one in which it looks like the profit target should be lowered to the 10-15% range instead of the usual 20-25% range. This also would require a change in stop loss on a position to 1/3 of the profit target to keep the risk/reward in the correct relationship.

Even with many earnings estimates having been lowered prior to the current earnins season, the earnings beat rate has been below recent history. I noticed the comment about the Baltic Dry Shipping Index which seems ominous that we could be headed into a worldwide slowdown. I don't know what is levitating this market but just keep watching price and volume.

The Market School Exposure Count is +5 (fully invested), the distribution count on the NASDAQ is +1 (very light).

Name: Breakouts 1-31-12.GIF Views: 835 Size: 60.4 KB