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II Insight UK

30 January 2013

Welcome to the first II Insight, UK issue.

This is the first edition of a free monthly newsletter which we hope will quickly become a useful tool in your investment strategies.

This month, Dr Jackson Wong, Head of Analysis for II UK, looks at his top UK buys for 2013. Jackson will monitor this portfolio in each issue over the coming months.

We also take an in-depth look at Breadth indicators – one of our favourite technical tools for monitoring market trends. We feel that it's vital to maintain a feel for the prevailing market conditions and this indicator helps you adapt to meet the needs of these conditions.

We will be hosting a webinar with Dr Jackson Wong on the 13th February.  If you would like to take part and discuss the markets with Jackson please email us at
analysis@investorsintelligence.com with any questions or comments you may have and we will do our best to include these in future issues.

My alerts” helps prevent missed opportunities

How many times have we all said “I'll buy that stock when it falls back a few dollars”. The problem is, there are a lot of things to do in life and it's so easy to miss such pullbacks. II subscribers can use the “Set alerts” function on the website – just select you stock (or stocks), click on “Set Alerts” and fill in a price target (higher than or lower than). The system will send an email after the market close as and when your price targets are met . You can also place alerts on the system to notify you when a stock posts a P&F breakout, KDR or other technical events. All alerts set can then be managed or cancelled through the “My Alerts” section on the Portfolio tab.


To See Dr Wong's top 10 picks for 2013 subscribe to the UK Daily Hotline today

How has the above portfolio performed the start of the year?

Explaining breadth

Breadth indicators are invaluable technical tools for all investors. These indicators summarise the general trend of the market and determine whether the market rally is sustainable.

For many, the market averages such as the Dow industrials or S&P500 may be good enough. But breadth charts adds another layer to consider. In Investors Intelligence, we are provide an interesting array of breadth indicators to assist subscribers, including:

• Point-and-Figure Breadth charts
• %10 Week Moving Average Breadth charts
• %30 Week Moving Average Breath charts
• % Relative Trends Breadth charts
• Weekly Climaxes

In this month's newsletter, I want to expand upon the Breadth - Weekly Climaxes. Knowing that readers may be unfamiliar to this indicator, so let me explain further. First, there are two types of climaxes:

• a
Buy Climax or
• a
Sell Climax
.

A
Buy Climax means that a stock tops out and closes lower on the week; while a Sell Climax suggests that an instrument bottoms out and closes higher on the week.

To show this concept graphically, let us look at a recent
Buy Climax
in Europe - Erste Bank Der Oesterreichischen. The stock reached 52-week highs last week but had failed to sustain this rally. Instead, it corrected beneath the previous week's close (see below). This forms a typically Buy Climax. Since we can only determine if a climax is made after each week's close, the breadth is computed every Friday.


Why are these Buy/Sell Climaxes helpful?

Well, if many stocks are developing a
Buy or Sell Climax simultaneously, then this is telling us that the current market trend is unsustainable and vulnerable to a reversal. Look at recent Buy/Sell Climax data for Europe. The region was showing a large number of Sell Climaxes during Jul-Aug 2011, which coincided with the index low of that year. This suggested that the downtrend is losing momentum. And while the index did retrace to the lows in November-2011, and again in June-2012, many stocks remained above their 52-week lows - meaning that the selling pressure was not intensified. A strong rally followed soon after.

We provide the Buy/Sell Climax data for all regions - US, UK, Europe, and Asia. Armed with these valuable data, investors are able to discover if the market is near a peak or bottom.


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Disclaimer:  This report has been produced and compiled by Investors Intelligence, a division of Stockcube Research Limited which is authorised and regulated by the Financial Services Authority, according to the requirements of the Financial Services and Markets Act 2000. It is distributed by Stockcube and is provided for information purposes only. Under no circumstances is it to be used or considered as an offer to sell, or a solicitation of any offer to buy. While all reasonable care has been taken to ensure that the information contained herein is not untrue or misleading at the time of publication, we make no representation as to its accuracy or completeness and it should not be relied upon as such. From time to time Stockcube and any of its officers or employees may, to the extent permitted by law, have a position or otherwise be interested in any transactions, in any investments (including derivatives) directly or indirectly the subject of this report. Also Stockcube may from time to time perform other services (including acting as adviser or manager) for any company mentioned in this report. The value of securities can go down as well as up, and you may not get back the full amount you originally invested. Derivatives in particular are high risk, high reward investment instruments and an investor may lose some or all of his/her original investment. If you make an investment in securities that are denominated in a currency other than that of GB Pounds you are warned that changes in rates of foreign exchange may have an adverse effect on the value, price or income of the investment. The investments referred to herein may not be suitable investments for all persons accessing these pages. You should carefully consider whether all or any of these are suitable investments for you and if in any doubt consult an independent adviser. This report is prepared solely for the information of clients of Stockcube who are expected to make their own investment decisions without reliance on this report. Neither Stockcube nor any officer of Stockcube accepts any liability whatsoever for any direct and consequential loss arising from use of this report or its contents. This report may not be reproduced, distributed or published by any recipient for any purpose without the prior express consent of Stockcube. Copyright 2012 by Stockcube Research Ltd
.
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US Sentiment holds the key
The Advisors Sentiment Survey continues to provide advance warning of major market turning points.  
The analysis and data regularly feature in the international financial press as a key indicator of market reversion.
Examples of these articles can be found on Barrons, NY Times, and Investor's Business Daily.
Read what CNBC said about the biggest switch in sentiment for 7 years.
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