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 DAILY AFTER-MARKET UPDATE
Tuesday, December 16, 2008 | 6:54PM

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Indices       NYSE       Nasdaq    
Dow +359.61 8,924.14 +4.20%   Volume 6,774,660,500 +35% Volume 2,267,949,250 +34%
Nasdaq +81.55 1,589.89 +5.41% Advancers  3,274 83% Advancers  2,278 74%
S&P 500 +44.61 913.18 +5.14% Decliners  604 15% Decliners  660 22%
Russ. 2000 +30.28 482.85 +6.69% 52 Wk Highs 28   52 Wk Highs 3  
S&P 600 +15.42 258.20 +6.35% 52 Wk Lows 114   52 Wk Lows 99  

 

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 CLOSING  MARKET COMMENTARY  
Indices Rise Above 50-Day Lines For First Time This Quarter - Adam Sarhan, Contributing Writer, www.CANSLIM.net

The major averages shook off the latest bout of negative economic news, then soared in the afternoon following the Federal Reserve's slashing of its benchmark interest rate to a record low of +0.25%. Volume totals expanded on the NYSE and on the Nasdaq exchange, offering some indication that large institutional investors were accumulating stocks. Even though volume was heavier than Monday's already light levels, however, Tuesday's totals were still below average. Advancers trumped decliners by more than a 5-to-1 ratio on the NYSE and over a 3-to-1 ratio on the Nasdaq exchange.  There was only 1 high-ranked company from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, snapping a two-day streak of zero high ranked 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

 

Before Tuesday's opening bell, Goldman Sachs Group Inc. (GS +14.35%), the 139-year-old investment powerhouse, reported its first quarterly loss since going public in 1999. For the quarter ending November 30, 2008, Goldman said it lost $2.12 billion, or $4.97 a share. This was sharply lower than the $3.22 billion, or $7.01 a share, earned in the same period last year. The fact that shares surged on heavy volume after the lower-than-expected results, shrugging off the bad news, was a somewhat encouraging sign. Other financial stocks also rallied, helping to bode well for this still suspect rally.

Traders digested the latest round of weaker than expected economic data. The Commerce Department said that new housing starts and permits tanked to a record low. Housing starts plunged -18.9% to a seasonally adjusted annual rate of 625,000 units from 771,000 units in October. That was lower than the Street's forecast of 740,000. New building permits, which give a sense of future home construction, also plummeted 15.6% to 616,000 units from 730,000 units in October. That was also much lower than the Street's forecast of 700,000. The Commerce Department began keeping monthly records for building permits in 1960, and in 1959 for housing starts. Again, the fact that the market shrugged off and rallied on negative news is an encouraging sign.

Around 2:20 P.M. EST, while saying it will employ "all available tools" to spur economic growth, the Fed announced it was cutting its target rate for overnight loans between banks to a range of zero to +0.25%. The decision came amid simultaneous recessions in the US, Europe and Japan that collectively sparked a world-wide bear market and sent the benchmark S&P 500 index down almost -45% since its 2007 record high. The Fed lowered its overnight lending rate, the rate banks charge each other for short term loans, by 75 basis points to +0.25%. In their post meeting comments, the ongoing recession is likely to warrant exceptionally low levels of the federal funds rate "for some time." The Fed has already announced it will purchase agency debt and mortgage-backed securities, and said they are ready to expand the program.

The major US averages surged after the Fed slashed rates but leadership, an important characteristic of a sustained rally, failed to follow suit. The large gains helped all of the major averages close above their respective short term 50-day moving average (DMA) lines for the first time this quarter. Growth investors are now concerned with two points: if the major averages can continue trading above their 50 DMA lines and if a new batch of leadership can emerge.  Leadership has been, and still remains, the missing element yet to emerge. This is best evidenced by the egregiously low number of high-ranked stocks appearing on the CANSLIM.net breakouts page coupled with the ominously low number of overall new highs printed each day.

PICTURED: The Dow Jones Industrial Average closed above its 50 DMA line for the first time this quarter!


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
Financial Group Posts Big Gains After Fed Eases - Kenneth J. Gruneisen, Founder & Contributing Writer, www.CANSLIM.net

Financial shares were among Tuesday's biggest gainers as the Broker/Dealer ($XBD +9.81%) and Bank ($BKX +10.38%) indexes rose sharply.  The Retail Index ($RLX +5.31%) also underpinned the major averages' big gains.  Strength in the tech sector helped the Nasdaq Composite Index outperform its large cap peers as the Biotechnology ($BTK +5.08%), Internet ($DOT +5.17%), and Networking ($NWX +4.42%) indexes posted large gains.  The usually defensive areas also rallied, led by the Gold & Silver Index ($XAU +7.29%), with additional gains from the Integrated Oil ($XOI +5.07%) and Oil Services ($OSX +2.79%) indexes and the Healthcare ($HMO +4.11%) group.

Charts courtesy www.stockcharts.com

PICTURED: The Semiconductor Index ($SOX +5.87%) rose above its 50-day moving average (DMA) line, contributing to the tech-heavy Nasdaq Composite Index's large gain - which helped it also close (not shown) just a couple of points above its short-term average.

 
Industry Index Symbol Close Change % Change YTD % Change
Bank $BKX   45.73  +4.30  +10.38%  -47.74% 
Broker/Dealer $XBD   76.93  +6.87  +9.81%  -62.21% 
Gold & Silver $XAU   120.83  +8.21  +7.29%  -30.29% 
Semiconductor $SOX   221.51  +12.29  +5.87%  -45.64% 
Retail $RLX   285.36  +14.38  +5.31%  -29.91% 
Internet $DOT   181.65  +8.93  +5.17%  -35.66% 
Biotech $BTK   626.87  +30.31  +5.08%  -20.00% 
Integrated Oil $XOI   991.34  +47.88  +5.07%  -36.56% 
Networking $NWX   145.29  +6.15  +4.42%  -44.32% 
Healthcare $HMO   870.08  +34.36  +4.11%  -58.93% 
Oil Services $OSX   127.62  +3.46  +2.79%  -57.82% 


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.

Multiple Sell Signals Prompted Profit Taking; Serious Damage Followed - 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.

Mastercard Inc Cl A (MA +$8.81 or +6.32% to $148.10) is not a currently featured stock, but it may be worth another look for any important lessons that can be learned from this previous market leader that has experienced a technical breakdown after a considerable run up.  Although MA rallied above its 50-day moving average (DMA) line today, its gain was backed by suspiciously light volume (revealing no serious institutional buying demand), and the stock now faces a tremendous amount of resistance due to overhead supply, making it unlikely to be a market leader in the near term.

MA made its last appearance in the CANSLIM.net After Market Update's Featured Stock Update section on 6/20/08, with many details about its prior CANSLIM.net coverage provided under the headline "Distributional Action Negated Recent Breakout" with an annotated graph (read here).  In the weeks immediately following, the major averages' rally ended and a serious market correction began!  Since 3 out of 4 stocks go right along with the direction of the broader market, it was not surprising that additional sell signals soon prompted investors to unload their MA shares. Its technical deterioration below an upward trendline and prior chart lows was noted (use the "view all notes" links to review), and the stock has traded as much as -55.75% lower since 7/02/08 when it was dropped from the Featured Stocks list.  MA had traded up as much as +73.18% after it was first featured on Wednesday, October 31, 2007 in the CANSLIM.net Mid Day Breakouts Report (read here).

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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 Tuesday, December 16, 2008 at 4:32:00 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  		$30.00 +1.67 1240468
(83.33%) 		11/29/2005 $19.62 PP = $29.82
Y

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MB = $31.31
Most Recent Note - 12/16/2008 6:52:45 PM
Y - Lacked the necessary volume conviction (minimum +50% above average) to trigger a proper technical buy signal as it rallied for a considerable gain today and closed above its pivot point. 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 has recently encountered distributional pressure. 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
STRA - NASDAQ
Strayer Education Inc
DIVERSIFIED SERVICES - Education & Training Services  		$207.27 +6.20 223596
(79.18%) 		11/25/2008 $226.62 PP = $235.60
G

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MB = $247.38
Most Recent Note - 12/16/2008 6:49:07 PM
G - Gain today on lighter volume as it closed just above its 50 DMA line after finding support near its 200 DMA line. Raised concern 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  		$26.30 +0.62 89995
(99.33%) 		8/24/2007 $16.91 PP = $28.61
G

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MB = $30.04
Most Recent Note - 12/16/2008 6:47:45 PM
G - Gain on average volume today while consolidating. Well above its 50 DMA line and recent chart lows near $24, important support levels to watch now. Color code was recently changed to green based on weaker action, as 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. 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.
View all notes | Alert me of new notes | CANSLIM.net Company Profile
ESI - NYSE
I T T Educational Svcs
DIVERSIFIED SERVICES - Education & Training Services  		$85.98 +5.15 881825
(64.53%) 		4/1/2003 $28.45 PP = $90.09
G

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MB = $94.59
Most Recent Note - 12/16/2008 6:46:30 PM
G - Bounced today near its 50 DMA line with a gain on quiet volume. Mentioned by CANSLIM.net founder Kenneth Gruneisen in a 12/15/08 interview on WBBM 780AM - to hear this segment click here. Color code was changed to green based on recent weakness, and gains above its pivot point are necessary for its outlook to meaningfully improve. 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.
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AFAM - NASDAQ
Almost Family Inc
HEALTH SERVICES - Home Health Care  		$44.99 +0.92 312485
(76.65%) 		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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