How frustrating for you - I will assume that "very stretchy fabric" would be lycra or a jersey with lycra or spandex in it. This can be tricky fabric to tackle on the sewing machine, especially if it is very light weight, textured or open weave. So use a Smetz "Stretch" needle, not just a regular ball point and a good quality polyester thread such as gutterman or metrosene. this link is great info on sewing threads, http://sewing.about.com/library/weekly/aa102100a.htm
Use a stretch stitch that that has forwards and backwards movement to put elasticity into the seam. Use a teflon coated (black) sewing foot if you can get one, otherwise use a clear plastic foot. And if fabric is really hard to control, you can put strips of freezer paper between the two layers to give it some stability and help control the fabric when stitching. Use a spool cap over the thread spool to help the thread flow off smoothly. It is possible that your fabric may just be too difficult for a regular SM and best tackled with a serger with differential feed which is why sergers are so popular, they are great for knits.
However, your top thread breaking over and over like this sounds more like the top tension discs are malfunctioning or your top thread is caught/catching somewhere in the path to the needle.
So, take a deep breath, put in a regular woven needle and get the tensions sorted on cotton fabric scraps first. This way, you take the stretch fabric out of the equasion and establish if the machine is faulting.
Have you cleaned the top tension discs already? If not, do this now - turn to zero, then run the selvage edge of a clean piece of cotton scrap fabric between the discs in a sawing motion. Is there black gunk coming onto the fabric? Keep going until it is clean. Then rethread up and set tension back to 5. (I assume you are using a good quality thread and it isn't a very old spool that has been sitting around for years? Thread does dry out and get brittle with age - I keep mine in sealed containers away from sunlight).
Also carefully check the threading path from the spool to the needle, is the thread catching on a nick in the top of the spool? or some other part of your machine, is it wrapped twice around an eyelet or the thread takeup lever. Is there some sharp piece of plastic or metal that is causing the thread to break. Lower the pressure foot and pull the top thread just before the needle. It should feel firm but you should be able to pull it? If it breaks now, I would take it to the mechanic and get it serviced.
If you can pull the thread okay, then rethread the bobbin, set the tension back to the normal number on the bobbin holder, and test sew on cotton fabric. Can you get a good seam now? If thread is still breaking now, I'd take the machine to the mechanic for a full service.