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 DAILY AFTER-MARKET UPDATE
Monday, December 15, 2008 | 5:46PM

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Indices       NYSE       Nasdaq    
Dow -65.15 8,564.53 -0.75%   Volume 5,020,730,500 -17% Volume 1,693,853,620 -12%
Nasdaq -32.38 1,508.34 -2.10% Advancers  1,098 28% Advancers  723 24%
S&P 500 -11.16 868.57 -1.27% Decliners  2,722 70% Decliners  2,135 71%
Russ. 2000 -15.86 452.57 -3.39% 52 Wk Highs 10   52 Wk Highs 5  
S&P 600 -7.96 242.78 -3.17% 52 Wk Lows 122   52 Wk Lows 100  

 

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 CLOSING  MARKET COMMENTARY  
Major Indices Remain Stalled Below Their 50-Day Averages - Adam Sarhan, Contributing Writer, www.CANSLIM.net

The major averages opened lower on Monday and nearly erased the past week's gains after a report showed that manufacturing was lower than expected. However, lighter volume totals were reported on the NYSE and on the Nasdaq exchange, offering some indication that selling from large institutional investors was not intensifying. Decliners trumped advancers by more than a 2-to-1 ratio on the NYSE and by a 3-to-1 ratio on the Nasdaq exchange.  There were zero high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, the second straight session with no Leaders List stocks making new highs. The BreakOuts Page at CANSLIM.net is often flooded with high-ranked leaders during healthy market periods. It would be most encouraging, now that the major averages have produced their December 2, 2008 solid follow-through day, to see an expansion in the number of stocks making the grade. However, at present, stocks making new 52-week lows are still outnumbering new 52-week highs on both major exchanges.  New highs on the Nasdaq exchange in recent weeks have routinely been limited to the single digits, revealing a dearth of new leadership in growth stocks. We will continue to monitor this situation closely in the days ahead, watching for a healthier expansion of leadership that could lead to a sustained market advance.

 Charts courtesy www.stockcharts.com

Stocks ended lower after the New York Fed released its general economic index. The index slid to -25.8 which was the lowest level since records began in 2001 and down from -25.4 in November. Readings below zero for the Empire State index signal contraction which does not bode well for the economy. Elsewhere, US industrial production fell -0.6% in November which was the third drop in four months, according to a separate report from the Fed in Washington DC. On Tuesday, the Federal Reserve will announce its decision on interest rates. Fed futures are pricing in a 64% chance that the central bank will reduce its benchmark rate by three-quarters of a percentage point to +0.25%. The rest of the traders are looking for a 50 basis-point cut to +0.5%. 

It was somewhat encouraging to see volume totals recede as the market sold off on Monday. However, leadership continues to be a concern as traders prepare for Christmas. For most of this month, the market has been quietly consolidating its recent move up from the November 21, 2008 lows, a rally of +20% magnitude; and the major averages' rallies have stalled below their respective 50-day moving average (DMA) lines. Volume has been well below the extreme levels reached in the September - November period. Looking ahead, a few possible scenarios may occur. First, the market may spend additional time trading in a sideways pattern consolidating - for how much time, no one can say. Second, the bulls may show up and send all of the major averages soaring above resistance at their 50 DMA lines, setting the stage for another meaningful leg higher. Third, the bears may emerge and send the major averages back towards or below their November lows.  A new batch of leadership must emerge in order for any new sustained rally. Until then, patience is paramount.

PICTURED: The Dow Jones Industrial Average continues to consolidate below its 50 DMA line.


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.

 INDUSTRY  GROUP  WATCH  
The commentary and table below will show you important industry and/or sector information through today's close. Tracking certain areas or sectors for leadership characteristics helps you to find individual stocks with the "L" in CAN SLIM® - Leaders in a leading group
Internet Index Lingering Under 50-Day Average - Kenneth J. Gruneisen, Founder & Contributing Writer, www.CANSLIM.net

Financial shares created the most drag on the major averages Monday as the Bank ($BKX -4.08%) and Broker/Dealer ($XBD -4.07%) indexes were among the worst decliners.  The Retail Index ($RLX -1.97%) and many tech shares also faced some selling pressure as the Biotechnology ($BTK -2.50%), Internet ($DOT -1.81%), Semiconductor ($SOX -1.75%), and Networking ($NWX -0.98%) indexes finished the session unanimously lower.  The gainers included generally defensive areas such as the Gold & Silver ($XAU +4.05%), Oil Services ($OSX +1.36%), and Healthcare ($HMO +0.81%) groups.

Charts courtesy www.stockcharts.com

PICTURED: The Internet Index  ($DOT -1.81%) has been encountering resistance near its 50-day moving average line.

 
Industry Index Symbol Close Change % Change YTD % Change
Gold & Silver $XAU   112.62  +4.38  +4.05%  -35.03% 
Oil Services $OSX   124.16  +1.67  +1.36%  -58.96% 
Healthcare $HMO   835.72  +6.75  +0.81%  -60.55% 
Integrated Oil $XOI   943.46  -0.76  -0.08%  -39.62% 
Networking $NWX   139.14  -1.37  -0.98%  -46.68% 
Semiconductor $SOX   209.22  -3.72  -1.75%  -48.66% 
Internet $DOT   172.72  -3.19  -1.81%  -38.83% 
Retail $RLX   270.98  -5.44  -1.97%  -33.44% 
Biotech $BTK   596.56  -15.27  -2.50%  -23.87% 
Broker/Dealer $XBD   70.06  -2.97  -4.07%  -65.58% 
Bank $BKX   41.43  -1.76  -4.08%  -52.66% 


FEATURED  STOCKS UPDATE  

Latest Notes on All Featured Stocks | Recently Featured Stock Updates
The stocks below have been recently featured by CANSLIM.net. Our experts monitor these stocks and post updates on noteworthy action here.

Sun Burned "Buy And Hold" Investors - Kenneth J. Gruneisen, Founder & Contributing Writer, www.CANSLIM.net

In recent weeks we have taken the opportunity to use this section to revisit some of the previously featured stocks that were dropped some time ago based on technical weakness.  Studying what happened afterwards should hopefully allow investors to get a better understanding of the importance of having a sell discipline. Limiting losses while they are small is critically important to your success, and this investment system's rule is to always sell a losing stock after it falls more than 7-8% from your buy price.  These well-known, high-profile companies serve now as perfect examples that will hopefully allow investors in the future to recognize the warning signs and technical sell signals so they will know when it is time to lock in profits or minimize losses per the investment system's sell rules.

Sun Hydraulics Corp (SNHY -$0.66 or -4.14% to $15.30) is not a currently featured stock, but it may be worth another look for any important lessons that can be learned from a previous market leader that has experienced a technical breakdown and fundamental deterioration.  Those who might otherwise still be tempted to say, "But its a good company", and hold a losing stock after it falls more than 7-8% from their buy price have an opportunity to learn why limiting losses while they are small is so important.  SNHY now faces a tremendous amount of resistance due to overhead supply, making the stock unlikely to be a market leader in the near term.

This stock encountered resistance near the upper limit of its trading channel - mentioned in the August 2008 Investing for the New Millennium article (read here).  Then, its last appearance in the CANSLIM.net After Market Update's Featured Stock Update section was shortly thereafter, on 8/05/08, under the headline "Sun Falls After Giving Disappointing Guidance" with an annotated graph showing a violation of its 50-day moving average (DMA) line and details about prior coverage of this long-time leader (read here).

Sell signals prompted investors to unload SNHY shares long, long ago, and the stock has actually fallen an amazing -64.89% since 9/02/08 when it was dropped from the Featured Stocks list.  The quarterly report for the period ended September 30, 2008 showed decelerating sales growth and earnings increases below the +25% guideline. It was no surprise (because the company gave guidance) in this case; but like we have often seen, fundamental deterioration followed an earlier technical sell signal.

SNHY is an example of a previously featured stock that eventually returned after being dropped from the Featured Stocks list.  It appeared in yellow in the May 12, 2008 CANSLIM.net Mid-Day Breakouts Report (read here) with a new $36.60 pivot point and a $38.43 maximum buy price - and with more extensive coverage in that evening's CANSLIM.net After Market Update in the Featured Stock Update section (read here).  SNHY was first featured on Friday, May 27, 2005 in the CANSLIM.net Mid Day Breakouts Report (read here), but subsequently dropped from the Featured Stocks list due to weakness.

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  Y - Today's better buy candidates based on the CAN SLIM® investment system and  highlighted by our staff of experts.   G - Previously featured in this report as yellow and now may no longer be buyable under the guidelines.

NOTE : ADDED FEATURES: Click the company name to view each selection's CANSLIM.net Stock Profile including a full summary of recent and previous analysis by our experts. On the CANSLIM.net Featured Stocks Page you can now click the column headings to alternately sort all currently Featured Stocks in ascending/descending order.
Daily Graphs Online Denotes link to Daily Graphs Online®

Last Updated Monday, December 15, 2008 at 4:49:00 PM by Kenneth Gruneisen and the expert staff at CANSLIM.net

Export to Excel (Most recent data)

Symbol/Exchange
Company Name
Industry Group 		Last Chg. Vol
(% DAV)		 Date when First Featured Price when First Featured Latest Pivot Point
Featured		 Status Resources
Latest Max Buy Price
THOR - NASDAQ
Thoratec Corp
HEALTH SERVICES - Medical Instruments & Supplies  		$28.33 -0.83 892663
(60.06%) 		11/29/2005 $19.62 PP = $29.82
Y

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MB = $31.31
Most Recent Note - 12/15/2008 5:45:52 PM
Y - Mentioned by CANSLIM.net founder Kenneth Gruneisen in a 12/15/08 interview on WBBM 780AM - to hear this segment click here. This high-ranked Medical - Products firm reached a new all-time high on 12/08/08, but it has since encountered some distributional pressure, and it has not triggered a convincing technical buy signal with a gain and solid close above its pivot point. Caution is especially urged based on other failed breakouts and general market weakness. THOR was featured in yellow in the 12/05/08 Mid-Day Breakouts Report (read here). Annual earnings (the A criteria) history is unimpressive, however, its 2 most recent quarters showed giant sales and earnings increases that make it an interesting turn around story. THOR has rebounded impressively after being featured in the past, then subsequently dropped from the CANSLIM.net Featured Stocks list on 2/2/2006. - Kenneth J. Gruneisen, CAN SLIM® Certified, Registered Principal, Source Capital Group, Inc. (Members FINRA, SIPC)
>>> The latest Featured Stock Update appearance was 12/12/2008 including detailed analysis and an annotated graph. To View, click here.
View all notes | Alert me of new notes | CANSLIM.net Company Profile
ESI - NYSE
I T T Educational Svcs
DIVERSIFIED SERVICES - Education & Training Services  		$80.83 -1.20 831421
(59.66%) 		4/1/2003 $28.45 PP = $90.09
G

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MB = $94.59
Most Recent Note - 12/15/2008 5:46:15 PM
G - Mentioned by CANSLIM.net founder Kenneth Gruneisen in a 12/15/08 interview on WBBM 780AM - to hear this segment click here. Quietly consolidating near its 50 DMA line, its color code is changed to green based on recent losses that have it now trading well below its pivot point. Featured in the December 2008 CANSLIM.net News (read here). Technically, buyable breakouts must first rise above their pivot point with gains backed by at least +50% above average volume to trigger a buy signal. ESI recently cleared its pivot point, but did so on lackluster volume, which means that a proper technical buy signal has yet to be triggered. - Kenneth J. Gruneisen, CAN SLIM® Certified, Registered Principal, Source Capital Group, Inc. (Members FINRA, SIPC)
>>> The latest Featured Stock Update appearance was 12/11/2008 including detailed analysis and an annotated graph. To View, click here.
View all notes | Alert me of new notes | CANSLIM.net Company Profile
STRA - NASDAQ
Strayer Education Inc
DIVERSIFIED SERVICES - Education & Training Services  		$201.07 -6.84 269813
(96.16%) 		11/25/2008 $226.62 PP = $235.60
G

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MB = $247.38
Most Recent Note - 12/15/2008 5:44:35 PM
G - Loss today on average volume pressured it under its 50 DMA line and near its 200 DMA line. Raised concern last week after recently encountering worrisome distributional pressure. Color code was changed to green based on weak action, and it would need to rally back for gains and new high closes on heavier volume for its outlook to improve. It recently traded above its pivot point, but failed to confirm a solid technical buy signal. Earnings and sales revenues increases have been steady year after year, and quarter after quarter (good A & C criteria). The "high" dollar amount per share would be considered a non-factor, yet the small supply (the S criteria) of only 14.2 million shares outstanding can contribute to great volatility in price should the institutional crowd rush in or out. - Kenneth J. Gruneisen, CAN SLIM® Certified, Registered Principal, Source Capital Group, Inc. (Members FINRA, SIPC)
>>> The latest Featured Stock Update appearance was 12/8/2008 including detailed analysis and an annotated graph. To View, click here.
View all notes | Alert me of new notes | CANSLIM.net Company Profile
NCIT - NASDAQ
N C I Inc Cl A
COMPUTER SOFTWARE & SERVICES - Information Technology Service  		$25.68 -0.05 41261
(45.69%) 		8/24/2007 $16.91 PP = $28.61
G

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MB = $30.04
Most Recent Note - 12/15/2008 5:39:17 PM
G - Consolidating above its 50 DMA line. Color code was changed to green again based on weaker action. It has slumped considerably since the gain on 12/05/08 with more than +50% above average volume helped it close above its pivot point, which technically met the criteria to trigger a buy signal. Its 50 DMA line and recent chart lows near $24 are important support levels to watch. One shortcoming previously noted is the company's up and down annual (the A criteria) earnings history. Members can review recent analysis via the "View All Notes" link. - Kenneth J. Gruneisen, CAN SLIM® Certified, Registered Principal, Source Capital Group, Inc. (Members FINRA, SIPC)
>>> The latest Featured Stock Update appearance was 12/9/2008 including detailed analysis and an annotated graph. To View, click here.
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AFAM - NASDAQ
Almost Family Inc
HEALTH SERVICES - Home Health Care  		$44.07 -1.03 301691
(74.40%) 		5/21/2008 $24.27 PP = $42.80
G

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MB = $44.94
Most Recent Note - 12/15/2008 5:35:28 PM
G - Consolidating above support at its 50 DMA line. Recent gains with above average volume helped it approach prior chart highs, but it has not formed a sound new base. Prior 50 DMA violation on 11/20/08 triggered technical sell signals. - Kenneth J. Gruneisen, CAN SLIM® Certified, Registered Principal, Source Capital Group, Inc. (Members FINRA, SIPC)
>>> The latest Featured Stock Update appearance was 12/4/2008 including detailed analysis and an annotated graph. To View, click here.
View all notes | Alert me of new notes | CANSLIM.net Company Profile

  ABBREVIATION KEY
 C = Current Quarterly Earnings | A = Annual Earnings Comparisons | N = New High / New Product or Service in Demand | S = Shares Outstanding | L = Leader in a Leading Group | I = Institutional Ownership | M = Market Direction | PP = Pivot Point | MB = Maximum Buy Price Under the Guidelines |



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. Investors with a significant financial interest in equities may inquire about opening an account by calling the office locally at (954) 785-1990 or 1-888-237-8399 or emailing to kgruneisen@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 reports.

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.

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THESE ARE NOT BUY RECOMMENDATIONS!  Comments contained in the body of this report are technical opinions only. The material herein has been obtained from sources believed to be reliable and accurate, however, its accuracy and completeness cannot be guaranteed. CANSLIM.net is not an investment advisor, hence it does not endorse or recommend any securities or other investments. 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. All trademarks, service marks and trade names appearing in this report are the property of their respective owners, and are likewise used for identification purposes only.

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