Market HealthInvestor’s Business Daily New York City Meetup 8.28.13

For Those of You Who Need a Disclaimer…

We Care…But You Should Care More

Market in Correction

SYRIATAPERINGSEQUESTEROBAMACAREUNEMPLOYMENT

DEBT CEILING

Four Year Bull Market

NASDAQ (weekly)

Short Choppy Rallies 2010 and 2011.

Bull Market Begins 3/12/09 With a 31 Week Rally.

2012 Has Two Distinct Rallies

2013 Mostly up with one pullback

?

Tracking the Last Rally

Rally Health Follow Through Day: 7/11/13 Failed 8/15/13

Day 2 (7/15/13): No Professional Distribution◦ Should not have distribution in the first two days◦ Had a distribution cluster starting day three

Day 20 (8/8/13): Price Progress◦ Money making rallies on average show advances of 5.5% or higher by day 20.◦ At 20 days, rally gained only 2.53%

Day 40 (9/5/13): Get Off Margin◦ Recent rallies have lasted 8 to 10 week◦ N/A

Day 50 (9/19/13): No New Buys◦ Most of the good merchandise comes out -2 to +4 weeks from the start of a new

rally. By the 10th week you have to ask why this stock didn’t participate until now.

◦ N/A

The Markets

NYSE New Lows beat New Highs

NYSE stocks above 200 DMA very weak and falling

A/D for S&P weak

NYSE New Lows give early clue to leave

Rally day-looking for a Follow-Thru

Kerry speech halts uptrend

NYSE New Lows expand

The Markets

NYSE New Highs vs New Lows

New Lows Expand

New Highs Dry Up

FTD

The Markets

NASDAQ New Highs vs New Lows

FTD

World Markets

Market APR MAY JUN JUL AUG

Nasdaq 8.3 17.0 10.9 18.5 18.5

S&P 500 10.7 16.0 11.3 18.7 14.3

Germany -1.4 7.2 1.1 6.4 6.7

Brazil -3.8 -1.2 -21.7 -19.3 -24.0

Russia -14.2 -7.9 -17.1 -9.0 -13.5

India -1.0 1.8 -13.0 -5.2 -27.2

China Hong KongSmall CapBig Cap

2.3 -1.6-11.0

8.1 3.9-5.8

-5.5-10.4-21.6

-1.3 -3.6-14.2

-4.0 -3.0-13.3

Mexico 3.8 -2.5 -14.6 -4.1 -11.4

Germany and Europe are stabilizing

India, South Africa and Brazil are melting down

Australia and South Korea hurt by Japan’s policies

Commodities

Food

Fuel Prices

The Big Picture

NASDAQ

Sucker’s Rally

Clustered DDs

NASDAQ FTD

NASDAQ Rally without a FTD

Bernanke Speech

New Rally Attempt Undercut

Rally Fails

Kerry Speech

S&P 500

Regains 50 on low volume

50 Day support broken

IBD Mutual Fund Index

Russell 2000 (Weekly)

Small Caps Lead

IBD 85/85 Index (Weekly)

CAN SLIM Stocks Remain

Strong

IBD 50 (Weekly)

RS Line Remains Strong

Sectors (Year to Date)

Sectors (Since 7/11/13 FTD)

Industry Groups

Broad and diverse set of groups in the top 40.

The bottom 40 are mostly commodity, utility and defensive stocks.

Sector Leaders

All of the Sector Leaders are in 7 sectors

Sector Leaders

Sector Leaders have expanded from 15 last month to 18 this month

Half of these are near a buy point:

STOCK BPACT 133.10EVR 44.63FLT 100.97OCN 52.35PRAA 53.09PCLN 926.50QCOR 66.92SSNC 34.54VRX 94.32

What to Do Now

If You Haven’t Already Have your plan on paper Cut out losers and laggards Sell any stock that doesn’t have

true “Model Book” characteristics Set stops on any remaining

position and sell if they’re hit without hesitation

Raise Cash

Set Up Your Wish List

Watch for pullbacks and tight areas

Watch for new bases Watch for high RS stocks Don’t forget about stocks you had

to sell Don’t get complacent

Homework

Rigor and the Pursuit of Excellence

Success: A Lot of Little Things Done Well

Be Careful Out There