The major averages jumped above important psychological resistance levels after a slew of stronger than expected earnings and economic data were released. Volume totals on the NYSE and on the Nasdaq exchange were reported higher compared to Tuesday's totals which suggests increased institutional accumulation. Advancers trumped decliners by over a 3-to-1 ratio on the NYSE and by nearly a 4-to-1 ratio on the Nasdaq exchange. New 52-week highs trumped new lows on both exchanges and new highs on the NYSE hit the highest level since January 2004. There were 86 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, nicely higher than the 46 issues that appeared on the prior session. A healthy crop of new leaders making new highs bodes well for any market rally. Regular readers know we have repeatedly noted in this commentary -"the recent expansion in leadership has been a welcome improvement."

Intel Corp (INTC +3.29%), JP Morgan Chase & Co (JPM +4.05%) and railroad giant CSX Corp. (CSX +4.09%) all topped estimates and reported solid Q1 results. All three stocks gapped up on Wednesday which helped the benchmark S&P 500 and the tech-heavy Nasdaq Composite close above their psychologically important resistance levels for the first time since September 2008 (when Lehman failed). At this point, all the major averages have closed above their latest important psychological resistance levels: Dow Jones Industrial Average topped 11,000, the S&P 500 Index surpassed 1,200, and the Nasdaq Composite Index closed above 2,500 which bodes well for this 7-week rally.

The Consumer Price Index (CPI) was very mild and below expectations which suggests inflation remains tame as the economy continues to recover. Retail sales jumped in March which helped a slew of retailers hit fresh 52-week highs. Elsewhere, the Fed released its Beige Book which showed the economy continues to improve across much of the nation. Economic data from Asia was also positive: Korea reported a large drop in unemployment, Singapore reported strong GDP growth in Q1 and many believe China will report a large increase in GDP when they report their numbers on Thursday. The one negative data point was that US mortgage applications tanked, which reiterates how fragile the ailing housing recovery is. However, it was very encouraging to see a slew of housing stocks surge in recent weeks and months which reiterates our stance "the worst" has been seen in the housing market.

The benchmark S&P 500 Index currently has 5 distribution days while the Nasdaq Composite and Dow Jones Industrial Average have 4 since the March 1, 2010 follow-though-day (FTD). These distribution days have not been damaging which is a welcomed sign. Trade accordingly.

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Charts courtesy www.stockcharts.com

PICTURED: The Semiconductor Index ($SOX +4.30%) gapped up today, and the chip group's improving leadership was evidenced by a total of 9 stocks from "semiconductor" groups meeting the mid-day report (read here) screening parameters.  Leadership from the tech sector has been a critical contributor in some of history's best bull markets, so this strong action is encouraging news for growth oriented investors. 

Grand Canyon Education (LOPE -$0.19 or -0.69% to $27.16) ended with a small loss today, closing just below its pivot point and -4.6% off its 52-week high. It was featured in the 4/13/10 mid-day report (read here) and finished that session near the middle of its intra-day range with a gain above its pivot point backed by more than 4 times average volume. The considerable gain triggered a technical buy after a "3-weeks tight" type pattern. That type of advanced chart pattern occasionally forms after an earlier breakout produces considerable gains.  In this case, volume cooled while it stubbornly held its gains, which suggests that very few sellers were rushing to the exits.  Its current Up/Down Volume Ratio of 1.6 is an unbiased indicator that it has recently been under accumulation.  The number of top-rated funds owning shares rose from 42 in Jun '09 to 62 Mar '10, providing a nice reassurance concerning the I criteria of the fact-based investment system.  Meanwhile, great leadership in the Commercial Services - Schools group is a nice reassurance for the L criteria. LOPE was noted in the 3/24/10 mid-day report appearance, "Patient investors may watch for an ideal entry point on pullbacks toward prior highs, of whenever a new base forms." 

Color Codes Explained :
Y - Better candidates highlighted by our staff of experts.
G - Previously featured in past reports as yellow but may no longer be buyable under the guidelines.