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CANSLIM.net NEWS MONTHLY NEWSLETTER FOR NOVEMBER 2009  
DOW 9,712.73 YTD +10.67% |  Nasdaq 2,045.11 YTD +29.68% |  S&P 500 1,036.19 YTD +14.72% (as of 10/30/2009)
Late October Weakness Ends Rally; Caution Advised Until New Follow Through Arrives
- Adam Sarhan, Contributing Writer, www.CANSLIM.net 		Stocks To Watch In This New Market
- CANSLIM.net News Staff
Markets Leading Groups
- CANSLIM.net News Staff 		INM Nov '09 - Let Market Action Help Manage Your Expectations
- Kenneth J. Gruneisen, Founder and Contributing Writer, www.CANSLIM.net
Featured Stocks Month in Review
- CANSLIM.net News Staff 		Improvements Continue at CANSLIM.net
- Frank DeBold
Rally in US Dollar Stymies Strength in Stocks
- Frank E. Testa



Late October Weakness Ends Rally; Caution Advised Until New Follow Through Arrives
Adam Sarhan, Contributing Writer, www.CANSLIM.net
Finally, the 7-month robust rally we witnessed in the US equity market came to an abrupt end in the final week of October, sending the major averages back into a serious correction for the first time since early March. The US dollar rallied from multi-month lows which played a pivotal role in sending US stocks and a slew of commodities lower in the latter half of October (more on that below). In addition, investors remained concerned that the effects of the massive worldwide stimulus packages from 2008 are beginning to wane. From our point of view, the current rally was confirmed with a follow-through day on March 12, 2009, and officially ended on October 28, 2009 which was one of the longest rallies this decade! This robust 34-week rally was a bit odd in nature since it helped send the major averages to one of their strongest 7-month sprints in history and did so with only a dearth of high quality leadership participating. It is important to note that, the major averages also managed to trade above important multi-year downward trendlines (formerly resistance) late in the third quarter and retraced approximately +50% of their recent bear market decline.   
PICTURED: The above (monthly) chart shows a decade of Dow Jones Industrial Average history. 
 
Earnings & Economic Data: B-
Before we discuss the market's action, let's analyze how the market's have reacted to the latest round of earnings and economic data. So far, the market has responded poorly which is not a healthy sign. The labor department said US employers slashed 263,000 jobs in September which fell short of the Street's forecast for a decline of -175,000. The unemployment rate was -9.8% which matched the Street's estimate and was the worst level since June 1983 (when it was -10.1%). Payrolls have declined for the past 21 consecutive months and a total of  7.2 million jobs were shed during that time. Since the start of the recession there are 15.1 million people unemployed which is more than double the number when the recession began. Many people are concerned that unemployment woes will continue which might adversely affect the economic recovery. The International Monetary Fund (IMF) said this week that they believe higher unemployment coupled with the waning effects of the global stimulus package will hinder economic growth for 2010. The IMF believes that the US economy will grow by +1.5% in 2010, after contracting -2.7% in 2009. A few weeks later, the government reported that Q3 GDP rose +3.5% which topped the Street's estimates. The median estimate was for a +3.2% gain according to the latest Bloomberg survey. So only time will tell what actually happens over the next few quarters.
 
Timothy Geithner the current US Treasury Secretary said the bank capital-purchase program in last year's $700 billion bailout will be allowed to expire later this year because parts of the economy and the markets are stabilizing. Geithner told Reuters that “We are now at the point where we can begin to wind down the programs that really defined TARP in its initial stages,” referring to the Troubled Asset Relief Program. Elsewhere, the Federal Reserve released its Beige Book which surveyed its 12 districts. The report showed that the 12 regions believe that many sectors of the economy have stabilized or are modestly improving. The report also showed that all regions showed a waning real estate market.  The Commerce Department released a report which showed housing starts rose +0.5% in September to an annual rate of 590,000 and lowered August's reading. This fell short of the Street's estimate for a rate of 610,000. Permits, a sign of future construction, fell for the second time in the past three months which signaled the housing recovery is still questionable. The Labor Department released its Producer Price Index (PPI) which fell -0.6%. Bloomberg.com defines the PPI as "index that measures the average price level for a fixed basket of capital and consumer goods received by producers." This was the second decline in three months and followed a +1.7% rise in August. Core PPI which excludes food and energy slid -0.1%. 
 
Market Action:  Price/Volume D+
The major averages topped out in October 2007 then proceeded to precipitously plunge until they put in a near term bottom in early March 2009. Since then, the market snapped back and enjoyed hefty gains which helped send the major averages to one of their strongest 7-month rallies in history! The small cap Russell 2000 Index was the standout winner, surging a whopping +83% before reaching its interim high of 625.31 on September 23, 2009! The tech-heavy Nasdaq Composite is a close second, having vaulted +73%, before reaching its interim high of 2,190.64 on October 21, 2009. The benchmark S&P 500 Index raced +65% higher before placing its near term top of 1,101.36 on October 21, 2009, and the Dow Jones Industrial Average soared +56.4% before printing its near term high of 10,119.47 on October 21, 2009.
 
This data indicates that Wednesday, October 21, 2009 appeared to be a very important day for the market because that is the day that most of the popular averages placed their near term tops and suffered a negative outside reversal day on heavy volume. Over the next few days, the market got whacked with more distribution and more negative reversal days (open higher and closed lower) which put pressure on this 34-week rally. Then on Tuesday, October 27, 2009 the Russell 2000 index sliced and closed below support (its 7-month upward trendline and 50 DMA line) on heavy volume. The fate of the rally was sealed at that point since the Russell 2000 tends to move "before" the other popular averages (Fact: the Russell 2000 topped out in July 2007 at 856.48 way ahead of the other averages which topped out three months later in October 2007). The very next day, all the other averages except for the Dow Industrials sliced below important support (50 DMA line and 7-month upward trendline) which sent the market into a correction. As of this writing (October 31, 2009), all the major averages negatively reversed on a weekly and monthly basis which reiterates the importance of adopting a strong defensive stance until a new follow-through day emerges!
 
It is also important to note that the March-October 2009 rally helped the major averages retrace approximately 50% of their recent bear market declines. History shows us that -50% retracements tend to be the "norm" before the preceding trend resumes (in this case, bearish). To illustrate this point, the Dow Jones Industrial Average reached an all time high of 14,198.10 in October 2007 before falling a whopping 7,728.15 points (or -54.43%) to its March 2009 low of 6,469.95. The Dow's recent high of 10,119.47 is 3,649.52 points above its March 2009 low which marks a +47.22% retracement of its prior decline. The Russell 2000 marked a +55% retracement, while the S&P 500 marked a +48% move and the tech-heavy Nasdaq composite marked a +58% retracement from its October 31, 2007 high of  2,861.50.  The paper defines a retracement as a "reversal in the movement of a stocks' price, countering the prevailing trend." Historical studies show us that a 50% retracement is a very common area for a stock (or market) to pullback to before resuming its prior trend. Therefore, the major averages are at an important inflection point. Will they manage to bounce back and continue marching higher as they have done every other time they pulled back since the March lows? Or will this mark the end of this mini-bull market that resides within the broader bear market that began in October 2007?
 
Right now the market is in a correction, which means adopting a strong defensive stance is paramount. Avoid new buys, since history shows us 3 out of 4 growth stocks follow the major averages, and tighten your stops to protect your capital. Remember to always keep your losses small and never argue with the tape. Looking forward, a new rally will be confirmed only when the market manages to produce a sound follow-through day. Until then, patience is king. No one knows for sure how low this correction will take the market, so instead of guessing we shall simply continue to react intelligently to what we see happening. This simple, yet effective, strategy has served investors well through previous bearish periods. Better times will come, and trying to "force a trade" is rarely a good idea. Instead, be patient and let the market come to you. As always, we will continue to objectively analyze price and volume to better understand the market's underlying health.  Never argue with the tape, and always keep your losses small.
 
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Our skilled team of portfolio managers knows how to follow the rules of this fact-based investment system. We do not follow opinion or the "conviction list" of some large Wall Street institution which would have us fully invested even during horrific bear markets. Instead, we remain fluid and only buy the best stocks when they are triggering proper technical buy signals. If you are not completely satisfied with the way your portfolio is being managed, Click here to submit your inquiry.  *Accounts over $250,000 please.  ** Serious inquires only
Adam Sarhan is a Registered Representative and Vice President of Investments with Source Capital Group (Member FINRA,SIPC) and offers a suite of services for individual and institutional investors. Mr. Sarhan earned a BA and MA in Political Science from Florida Atlantic University and he is well versed in capital markets. In addition, Mr. Sarhan completed the CAN SLIM® Masters Program presented by Investor's Business Daily. Investors with a significant financial interest may inquire about opening an account by calling the office locally at 954-785-1990 or 1-888-237-8399 or emailing to asarhan@sourcegrp.com. Further information is always available upon request. Contact us if you know anyone that may have an interest in receiving this or any of our other products.


You stack the odds of making a winning trade in your favor by choosing a leading company in a leading industry group, so when buying stocks be sure to choose one with plenty of company, that is a stock trading among a group of several strong-performing peers!  Familiarize yourself with the list of the top performing industry groups and leading stocks listed below.  These symbols and related companies ARE NOT intended to be construed as a list of timely and proper choices based on the CAN SLIM® investment program.   These pace-setters in each of the currently top-ranked groups listed may not presently fit within the guidelines we suggest adhering to.  The point is that it is always wise to choose leaders in the same or a very similar business to that of the strongest stocks in the market.  Find companies that resemble other strong stocks' leadership characteristics.

TOTAL BREAKOUTS INDUSTRY GROUP BREAKDOWN OF BREAKOUTS BETWEEN 10/1/2009 and 10/31/2009
114 COMPUTER SOFTWARE & SERVICES SYNT - 10, WIT - 10, CTSH - 9, ARST - 8, EBIX - 6, INFY - 6, PWRD - 6, RHT - 5, SMSI - 5, PEGA - 5, CVLT - 5, VIT - 5, CTFO - 4, RCON - 4, ININ - 4, JDAS - 4, CPBY - 3, SXCI - 3, TLEO - 2, TLVT - 2, BLKB - 2, SWI - 2, SNX - 1, CERN - 1, EPAY - 1, INFA - 1,
42 INTERNET PCLN - 8, MELI - 8, BIDU - 6, RAX - 5, SNWL - 5, INOD - 4, BCSI - 2, EBAY - 1, FFIV - 1, WWWW - 1, NTES - 1,
40 RETAIL CBD - 12, JOSB - 8, ARO - 8, SMRT - 6, CHS - 3, FUQI - 3,
28 CONSUMER NON-DURABLES GYMB - 9, SHOO - 7, SWM - 5, TUP - 3, AM - 3, AEPI - 1,
23 CHEMICALS LZ - 11, NEU - 8, SCL - 4,
18 DIVERSIFIED SERVICES VPRT - 5, RINO - 4, LPSN - 3, TTEC - 2, WXS - 2, WNS - 1, CAST - 1,
17 ELECTRONICS TQNT - 5, NVEC - 4, WMS - 3, ITLN - 3, AMSC - 2,
15 FINANCIAL SERVICES BPSG - 7, CS - 6, JEF - 1, CACC - 1,
15 HEALTH SERVICES SIRO - 6, BIOS - 4, GIVN - 3, ISRG - 1, KCI - 1,
15 SPECIALTY RETAIL ULTA - 8, MED - 7,
15 MANUFACTURING KPPC - 8, CFSG - 3, BYDDF - 2, HEAT - 1, JOYG - 1,
14 METALS & MINING IAG - 5, NXG - 5, CHBT - 4,
13 ENERGY FTI - 6, GOK - 3, DRQ - 3, VNR - 1,
12 TELECOMMUNICATIONS ATNI - 7, ABVT - 2, TSTC - 2, DECC - 1,
10 REAL ESTATE NYMT - 8, HPT - 2,
9 WHOLESALE TECD - 6, GLP - 3,
9 BANKING IBN - 6, BMA - 3,
9 LEISURE CTRP - 5, HMIN - 2, TAST - 1, DDRX - 1,
9 DRUGS PRX - 4, HITK - 3, ABAX - 2,
7 MEDIA DISCA - 7,
6 UTILITIES AES - 6,
6 FOOD & BEVERAGE DLM - 3, GMCR - 2, CCE - 1,
5 INSURANCE CISG - 4, CRVL - 1,
5 COMPUTER HARDWARE AAPL - 2, STEC - 2, LCRD - 1,
3 AUTOMOTIVE TXIC - 2, GETI - 1,
3 MATERIALS & CONSTRUCTION GLDD - 2, GFA - 1,
2 TRANSPORTATION PNCL - 2,
2 AEROSPACE/DEFENSE HSR - 2,



INM Nov '09 - Let Market Action Help Manage Your Expectations
Kenneth J. Gruneisen, Founder and Contributing Writer, www.CANSLIM.net

Nobody said it would be easy, or if they did they were lying.  I know that investors have great expectations of the investment system we employ with discipline. The calls and emails we receive are less occasionally raves from someone who just landed a great profit, while they are more occasionally rants about another stock that failed to produce much of anything but frustration. Such has been the case during the market's 2009 rally especially, and the level of investors' disappointment has been only heightened by the market's latest "correction."  So, when the market isn't making it easy, what are you supposed to do?  Take it easy and step aside for a while.

I know many of my readers are easily distracted by the story stocks of the day, and they quickly get bored when they step aside.  That must be why they still ask about investment ideas that take us on a detour from the planned route.  Two months ago they wanted to concentrate in only a small handful of stocks the way it is described in "How to Make Money in Stocks", but now they call and ask about 2X and 3X leveraged ETFs inversely associated with the market.   Three months ago they wanted to be strict practitioners of a proven successful investment approach, but now they ask what I think about buying a blue chip and writing the covered calls.  Managing expectations must not be one of my strong points!  How can I convince people that the right thing to do is just to step aside and wait?  Perhaps their confidence has been shaken in the system, and then doubt quickly overpowers the sane approach of simply pausing. 

Another client called us and recently asked, "Is there a way I can hedge against a falling real estate market?" The best quick answer I could come up with was, "Pull out all the equity."  The problem that many have, including my brother in California, is that the equity in their homes (while they do indeed have some meaningful amount) is virtually inaccessible.  The way the landscape appears, falling home prices and uncertain conditions are making lenders resist lending despite the policymakers' entire stimulus.

Maybe because of past successes I am more fanatical about the approach than others, but pausing and stepping aside served us and our clients very well in 2008, and in other ugly market periods.  I know everyone is anxious right now to see progress made in their portfolios, and they became sold on the investment system because of its potential to achieve impressive progress at that. It is very important to keep what we want from getting in the way of what we must do.  We want progress, and we want above average returns. The market direction (M criteria) is critical for us to monitor, and we want to let its actions dictate our actions.  When people call and ask what I think, I tell them what I think has little to do with it - what the market thinks is what matters most!

I am bullish at heart, and my belief is that the liquidity-driven rally will eventually resume.  Disbelievers will abound as the market climbs the "wall of worry" and world events create the occasional ripple.  Anyone who recalls the late 1990's rally where the S&P 500 Index produced back-to-back-to-back gains in the +25% range might also remember the steep but rather short-lived corrections in 1997 and 1998.  They made trading "difficult" if you let it frustrate you, but each time provided a much-needed shakeout which helped to sort out the stocks which had run their course from those which were only setting up solid foundations for another very substantial leg up. The late 90's rally went a lot higher than many expected, and my own experience was such that our clients' most magnificent gains came during the final phenomenal leg up.

We have seen and made reference to the point the book and the newspaper make that the best winners show up during the first 13-weeks of a new confirmed rally. In 2009 that may have held true too, however the early leadership was not a good crop of healthy growth companies with stellar fundamentals.  Throughout the recent rally, we saw more and more participation from the high-ranked spectrum of stocks we focus on, which is encouraging news.  There will eventually be yet another confirmed rally with a follow-through-day. While we are waiting, we need to study up and be familiar with the companies sporting the strongest fundamentals and showing strong price/volume patterns.  My expectation is that, with persistence, we will find great success by following the rules.
Kenneth J. Gruneisen has successfully completed the CAN SLIM® Certification Program.  Mr. Gruneisen is a Registered Principal and manages a Source Capital Group Member FINRA,SIPC) branch office offering personalized assistance. Further information is always available upon request via (954) 785-1990 or 1-888-237-8399 or email kgruneisen@sourcegrp.com

The recommendations made by CAN SLIM® certified individuals are their own and may not be attributed to the CAN SLIM® Certification Program, William O'Neil & Co., Investor's Business Daily or their affiliates. The CAN SLIM® Certification indicates only that the individual has successfully completed the CAN SLIM® Certification Program. CAN SLIM®, William O'Neil & Co., Investor's Business Daily and any of their affiliates are in no way responsible for any loss or damage caused as a result of the services provided by these individuals.

Comments contained in the body of this report are technical opinions only and are not necessarily those of Source Capital Group, Inc. The material herein has been obtained from sources believed to be reliable and accurate, however, its accuracy and completeness cannot be guaranteed. Our firm, employees, and customers may effect transactions, including transactions contrary to any recommendation herein, or have positions in the securities mentioned herein or options with respect thereto. Any recommendation contained in this report may not be suitable for all investors and it is not to be deemed an offer or solicitation on our part with respect to the purchase or sale of any securities. Source Capital Group, Inc. is a FINRA/SIPC member firm.



This section of CANSLIM.net News is probably the most read by our members, as it usually includes a couple of high-ranked leaders that are among the most ideal looking buy candidates under the investment system's guidelines. If it were entirely up to our staff, we would have a long list of new ideas to present with detailed analysis and annotated graphs in every issue. However, the responsible thing to do for now is hold off on featuring new ideas, since leadership is very elusive of late. Regular readers of CANSLIM.net's daily reports are well aware of the lack of leadership and dearth of strong stocks for consideration.

When conditions improve, patient and watchful CANSLIM.net members should be able notice that improvement in a number of ways. First, the list of stocks meeting the Mid-Day report's screen parameters will expand, and new ideas worthy of possible action will be highlighted in yellow with pivot points and max buy levels identified. This can only happen as the market action dictates. Our experts on staff will also produce more detailed Stock Bulletins including annotated graphs, when and only when healthy leaders are setting up and meeting all key criteria. Another thing to watch for will be a Special Report, just as new rallies have prompted in the past, and which is only possible with widespread leadership. And of course, CANSLIM.net News will have more ideas featured in this "Stocks to Watch in This New Market" section when the M criteria is finally saying that investor's odds are better in stocks.
Kenneth J. Gruneisen has successfully completed the CAN SLIM® Certification Program.  Mr. Gruneisen is a Registered Principal and manages a Source Capital Group Member FINRA,SIPC) branch office offering personalized assistance. Further information is always available upon request via (954) 785-1990 or 1-888-237-8399 or email kgruneisen@sourcegrp.com

The recommendations made by CAN SLIM® certified individuals are their own and may not be attributed to the CAN SLIM® Certification Program, William O'Neil & Co., Investor's Business Daily or their affiliates. The CAN SLIM® Certification indicates only that the individual has successfully completed the CAN SLIM® Certification Program. CAN SLIM®, William O'Neil & Co., Investor's Business Daily and any of their affiliates are in no way responsible for any loss or damage caused as a result of the services provided by these individuals.

Comments contained in the body of this report are technical opinions only and are not necessarily those of Source Capital Group, Inc. The material herein has been obtained from sources believed to be reliable and accurate, however, its accuracy and completeness cannot be guaranteed. Our firm, employees, and customers may effect transactions, including transactions contrary to any recommendation herein, or have positions in the securities mentioned herein or options with respect thereto. Any recommendation contained in this report may not be suitable for all investors and it is not to be deemed an offer or solicitation on our part with respect to the purchase or sale of any securities. Source Capital Group, Inc. is a FINRA/SIPC member firm.



Color Codes Explained :
Y - Yellow - Better candidates highlighted by our staff of experts.
G - Green - Previously featured in past reports as yellow but may no longer be buyable under the guidelines.
W - White designates that the stock has been dropped over the course of the month.  Refer to the associated notes for that stock for further explanation.

Quote details are snapshots of price/volume detail captured at the time the note was taken. 

 
Symbol/Exchange
Company Name
Industry Group 		Last Chg. Vol
% DAV		 Date  Featured Price Featured Latest Pivot Point
Featured
Latest Max Buy Price
ARO - NYSE
Aeropostale Inc
RETAIL - Apparel Stores 		$37.53 -1.43 4,003,579
153% DAV
2,609,200 		8/21/2009
(Date Featured)		 $39.21
(Price Featured)		 PP = $44.95
MB = $47.20
Most Recent Note - 10/30/2009 4:43:17 PM

G - It is -16% off its 9/22/09 all-time high of $44.85. Down considerably on very heavy volume today following the week's previously noted technical sell signals. The deterioration raises concerns, putting it squarely back in its prior base, negating its 8/21/09 technical breakout with a close below July's high close.


>>> The latest Featured Stock Update with an annotated graph appeared on 10/22/2009. click here.
C A N S L I M | StockTalk | News | Chart | Daily Graphs Online Stock Checkup IBD Graphs SEC View all notes Alert me of new notes CANSLIM.net Company Profile ZACKS
ARST - NASDAQ
Arcsight Inc
COMPUTER SOFTWARE & SERVICES - Business Software & Services 		$24.72 -0.49 436,331
65% DAV
670,900 		9/1/2009
(Date Featured)		 $19.91
(Price Featured)		 PP = $20.90
MB = $21.95
Most Recent Note - 10/30/2009 4:45:42 PM
G - Small loss today on lighter volume, hovering quietly near all-time highs. ARST is up +24% since it was first featured in yellow at $19.91 in the 9/01/09 mid-day report with an annotated daily graph (read here).
>>> The latest Featured Stock Update with an annotated graph appeared on 10/21/2009. click here.
C A N S L I M | StockTalk | News | Chart | Daily Graphs Online Stock Checkup IBD Graphs SEC View all notes Alert me of new notes CANSLIM.net Company Profile ZACKS
ASIA - NASDAQ
Asiainfo Holdings Inc
INTERNET - Internet Software & Services 		$22.06 -1.23 1,292,215
160% DAV
805,700 		10/14/2009
(Date Featured)		 $23.05
(Price Featured)		 PP = $22.19
MB = $23.30
Most Recent Note - 10/30/2009 4:47:27 PM
Y - Big loss today with above average volume, consolidating following a 10/29/09 gap up after reporting solid earnings for the period ended Sept 30, 2009 that beat expectations as it also raised guidance. It found prompt support near its 50 DMA line (a textbook chart support level) after a 7 session losing streak with losses on high volume briefly negated its latest breakout. Color code was changed to yellow based on impressive fundamentals and technical strength, however market conditions (M criteria) are a concern until a new follow-through-day occurs. Featured 10/14/09 in the mid-day report (read here) as it gapped up for a new 52-week high with 5 times average volume, triggering a technical buy signal by blasting above its pivot point. First featured in the August 2009 CANSLIM.net News (read here).
>>> The latest Featured Stock Update with an annotated graph appeared on 10/30/2009. click here.
C A N S L I M | StockTalk | News | Chart | Daily Graphs Online Stock Checkup IBD Graphs SEC View all notes Alert me of new notes CANSLIM.net Company Profile ZACKS
BIDU - NASDAQ
Baidu.Com Inc Ads
INTERNET - Internet Information Providers 		$377.92 -15.48 2,661,245
138% DAV
1,932,400 		9/8/2009
(Date Featured)		 $351.80
(Price Featured)		 PP = $368.59
MB = $387.02
Most Recent Note - 10/30/2009 4:50:05 PM
G - Down today on slightly higher than average volume for a close below its 50 DMA line, ending a tough week near its lowest close since early October. Volume spiked to 5 times normal on 10/27/09 as it gapped down for a considerable loss following its latest earnings report. As recently noted, "Choppy action has not allowed it to form a sound base in recent weeks." BIDU traded up as much as +23% from its price when featured in yellow in the 9/08/09 Mid-Day BreakOuts Report (read here).
>>> The latest Featured Stock Update with an annotated graph appeared on 10/28/2009. click here.
C A N S L I M | StockTalk | News | Chart | Daily Graphs Online Stock Checkup IBD Graphs SEC View all notes Alert me of new notes CANSLIM.net Company Profile ZACKS
CACC - NASDAQ
Credit Acceptance Corp
FINANCIAL SERVICES - Credit Services 		$34.37 -0.59 38,547
101% DAV
38,200 		9/29/2009
(Date Featured)		 $33.48
(Price Featured)		 PP = $32.60
MB = $34.23
Most Recent Note - 10/30/2009 4:53:59 PM
Y - Loss today on light volume, sinking quietly under its "max buy" level. Color code is changed to yellow, however market conditions (M criteria) are an overriding concern suggesting that investors hold off on any new buying efforts until a new rally with follow through day occurs. Prior chart highs and its 50 DMA line coincide in the $32 area, an important level to watch on pullbacks. The Finance - Consumer/Commercial Loans firm has maintained a great track record of annual and quarterly sales revenues and earnings increases. It was featured on 9/29/09 in yellow in the mid-day report (read here).
>>> The latest Featured Stock Update with an annotated graph appeared on 10/15/2009. click here.
C A N S L I M | StockTalk | News | Chart | Daily Graphs Online Stock Checkup IBD Graphs SEC View all notes Alert me of new notes CANSLIM.net Company Profile ZACKS
CRM - NYSE
Salesforce.com Inc
INTERNET - Internet Software & Services 		$56.75 -2.91 1,642,182
82% DAV
2,012,800 		8/16/2009
(Date Featured)		 $47.12
(Price Featured)		 PP = $45.59
MB = $47.87
Most Recent Note - 10/30/2009 4:56:30 PM
G - Continued weakness today led to a close under its 50 DMA line while the volume total was light. The deterioration this week led to technical sell signals as it violated prior chart highs in the $59 area and an upward trendline connecting its July, August and October chart lows.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/27/2009. click here.
C A N S L I M | StockTalk | News | Chart | Daily Graphs Online Stock Checkup IBD Graphs SEC View all notes Alert me of new notes CANSLIM.net Company Profile ZACKS
EBIX - NASDAQ
Ebix Inc
COMPUTER SOFTWARE & SERVICES - Business Software & Services 		$61.60 -2.26 235,185
105% DAV
223,700 		8/28/2009
(Date Featured)		 $45.86
(Price Featured)		 PP = $45.35
MB = $47.62
Most Recent Note - 10/30/2009 4:58:24 PM
G - Small loss on light volume today. Its negative reversal from all-time highs on 10/26/09 has been followed by more worrisome distributional pressure. Prior chart highs and its 50 DMA line now coincide in the $54 area as the next important support level to watch.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/13/2009. click here.
C A N S L I M | StockTalk | News | Chart | Daily Graphs Online Stock Checkup IBD Graphs SEC View all notes Alert me of new notes CANSLIM.net Company Profile ZACKS
GMCR - NASDAQ
Green Mountain Coffee Roasters
FOOD & BEVERAGE - Processed & Packaged Goods 		$66.55 -1.93 1,089,897
90% DAV
1,213,500 		10/5/2009
(Date Featured)		 $71.11
(Price Featured)		 PP = $75.89
MB = $79.68
Most Recent Note - 10/30/2009 5:00:05 PM
G - Small loss on average volume led to a close just below its 50 DMA line ($67.34) which was previously noted as an important support level to watch.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/29/2009. click here.
C A N S L I M | StockTalk | News | Chart | Daily Graphs Online Stock Checkup IBD Graphs SEC View all notes Alert me of new notes CANSLIM.net Company Profile ZACKS
GMCR - NASDAQ
Green Mountain Coffee Roasters
FOOD & BEVERAGE - Processed & Packaged Goods 		$66.55 -1.93 1,089,897
90% DAV
1,213,500 		10/5/2009
(Date Featured)		 $71.11
(Price Featured)		 PP = $75.89
MB = $79.68
Most Recent Note - 10/30/2009 5:00:05 PM
G - Small loss on average volume led to a close just below its 50 DMA line ($67.34) which was previously noted as an important support level to watch.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/29/2009. click here.
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NTES - NASDAQ
Netease.com Inc
INTERNET - Internet Information Providers 		$40.51 -1.18 4,411,526
N/A 		9/23/2009
(Date Featured)		 $47.11
(Price Featured)		 PP = $47.04
MB = $49.39
Most Recent Note - 10/9/2009
Gapped down today, falling on more than twice average volume. Based on weak technical action it will be dropped from the Featured Stocks list tonight. On 10/08/09 it triggered a technical sell signal with its loss on above average volume that more decisively violated its 50 DMA line and the upward trendline connecting its July-September chart lows. Subsequent deterioration under its August lows could complete a worrisome "double top" pattern which would have additional bearish implications. Color code was changed to green based on promptly negating its latest breakout and then trading more than -7% below its pivot point.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/9/2009. click here.
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NVEC - NASDAQ
Nve Corp
ELECTRONICS - Semiconductor - Specialized 		$47.49 -2.65 191,633
N/A 		8/26/2009
(Date Featured)		 $55.32
(Price Featured)		 PP = $57.60
MB = $60.48
Most Recent Note - 10/19/2009
Loss today on more than 2 times average volume as it violated prior chart lows in the $49 area triggered a technical sell signal. Based on the poor technical action it will be dropped from the Featured Stocks list tonight. NVEC had traded up as much as +88% after first being featured in yellow at $33.85 on 3/13/09 in the mid-day report (read here).
>>> The latest Featured Stock Update with an annotated graph appeared on 10/19/2009. click here.
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PEGA - NASDAQ
Pegasystems Inc
COMPUTER SOFTWARE & SERVICES - Business Software & Services 		$28.67 -0.63 270,801
85% DAV
318,600 		9/9/2009
(Date Featured)		 $31.14
(Price Featured)		 PP = $33.35
MB = $35.02
Most Recent Note - 10/30/2009 5:00:47 PM
G - This week's violations of its 50 DMA line and upward trendline were previously noted as technical sell signals. Disciplined investors always limit losses when a stock falls more than 7% from their buy price. Its June highs, which were once resistance in the $27-28 area, are now being put to the test as a chart support level.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/23/2009. click here.
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SWI - NYSE
Solarwinds Inc
COMPUTER SOFTWARE & SERVICES - Application Software 		$18.10 -1.16 400,853
73% DAV
551,000 		9/30/2029
(Date Featured)		 $22.03
(Price Featured)		 PP = $21.72
MB = $22.81
Most Recent Note - 10/28/2009 7:06:22 PM
G - Considerable loss today on light volume for its lowest close since July 22nd. Prior sell signals were noted, and based on weak action it is now -25% off its 52-week high. It will be dropped from the Featured Stocks list tonight. This high-ranked Computer Software - Enterprise firm was recently featured in the October 2009 issue of CANSLIM.net News (read here).
>>> The latest Featured Stock Update with an annotated graph appeared on 10/20/2009. click here.
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WNS - NYSE
W N S Holdings Ltd Ads
DIVERSIFIED SERVICES - Business/Management Services 		$13.51 -0.65 339,475
N/A 		9/28/2009
(Date Featured)		 $15.28
(Price Featured)		 PP = $16.10
MB = $16.91
Most Recent Note - 10/27/2009
Considerable loss today with higher volume, however it found some support and rebounded to close in the upper third of its intra-day trading range. Based on weak action it will be dropped from the Featured Stocks list tonight. The prior session's loss with above average volume, violating its 50 DMA line and recent chart lows, triggered technical sell signals. As noted last week, "distributional pressure raised concerns and technically negated its 10/16/09 breakout." Featured in yellow in the 9/28/09 mid-day report (read here). Quarterly earnings have been above the +25% guideline and its annual earnings history has been great, satisfying the C & A criteria. However, sales revenues growth has decelerated.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/26/2009. click here.
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Improvements Continue at CANSLIM.net
Frank DeBold

I would like to take a minute to update our members on some internal changes we have recently on the systems structure of www.canslim.net.  We have upgraded several of our servers, centralized all servers and located them in a world class facility that should provide full access, even during some of the various weather conditions we face here in southern Florida. Although most of these changes should be invisible to our members, the results will be improved system access and response times when accessing the site and the tools.  These changes will allow us to further enhance the tools available to our members.

 

Unfortunately, there were some service interruptions that may have been evident to our members during the transition over the last days of the past month.  We apologize for any inconvenience any member may have experienced and want to assure all that our IT staff has resolved most of the issues and will continue to work diligently to ensure all members can access all tools and reports to which they are entitled!

 

The other item involved in the transition was our internal and external email system.  If any member or guest sent an email or request to anyone at CANSLIM.net and you feel the issue raised is still open, please resend the email as the email system is fully operational at this time.

 

We look forward to further enhancing the tools and reports available to you and request you send an email to customercare@canslim.net with any comments or suggestions that would make the site and the service more beneficial for you.  I can not promise we will implement all suggestions submitted, but I can assure you each request will be evaluated by the staff at www.canslim.net.

 

As always, we remain committed to assisting you in your investment success!


Rally in US Dollar Stymies Strength in Stocks
Frank E. Testa

Rally in US Dollar Stymies Strength in Stocks by Frank Testa


S&P 500 Index ($SPX)


PowerShares DB US Dollar Index Bullish Fund (UUP): 

As illustrated in the two graphs above, there is a strong inverse relationship between the S&P 500 Index and the U.S. Dollar as represented by the PowerShares DB US Dollar Index Bullish Fund (UUP).

The recent technical damage in the major indices has coincided with the rally in the U.S. dollar, as investors rotated out of equities. The S&P 500 Index ended October below its 50-day moving average (1,052.25) for the first time since the four-month uptrend began in July. While the technical conditions of the major indices cracked, the downtrend in the UUP remains intact as it would take a move above its descending 50-day moving average located at the $22.81 level to signify a change in trend. Thus, it may be premature to conclude that the recent uptrend in equities has ended. However, a bearish divergence in the S&P 500’s Moving Average Convergence/Divergence (MACD) technical indicator raises a cautionary red flag. As the price of the S&P 500 Index rose in mid-September through mid-October, the MACD sloped downward. Conversely, a bullish divergence in UUP’s MACD suggests there is a strong likelihood that UUP will be able to snap out of its bearish trading channel by overtaking its 50-day moving average. Notice in mid-September through mid-October when the UUP hit lower highs, the MACD formed higher lows.

*MACD measures the difference between two Exponential Moving Averages (EMAs). A positive MACD indicates that the 12-day EMA is trading above the 26-day EMA. A negative MACD indicates that the 12-day EMA is trading below the 26-day EMA. If MACD is positive and rising, then the gap between the 12-day EMA and the 26-day EMA is widening. This indicates that the rate-of-change of the faster moving average is higher than the rate-of-change for the slower moving average. Positive momentum is increasing, indicating a bullish period for the price plot. If MACD is negative and declining further, then the negative gap between the faster moving average (blue) and the slower moving average (red) is expanding. Downward momentum is accelerating, indicating a bearish period of trading.


Frank E. Testa has earned his Chartered Market Technician (CMT) designation and is a Director & Chief Technical Analyst at Ipreo. Frank is a devoted practitioner of the CAN SLIM® methodology and a regular contributor to CANSLIM.net. In addition, Frank is the author of "Candlesticks: Shedding the Light on Pattern Analysis" and developer of the Power Point and Figure Charting Method that was published in "The Journal of Technical Analysis." Frank can be reached at Frank.Testa@ipreo.com.

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