The major averages ended mixed on Thursday after healthy economic data helped raise hopes the recession has bottomed. Volume totals were reported exceptionally lower on both major US exchanges. Advancers led decliners by a little less than a 3-to-2 ratio on the NYSE, but the mix was closer to even on the Nasdaq exchange. There were 8 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, higher than the 5 issues that appeared on the prior session.  A further expansion in the new highs list would offer encouraging news for growth oriented investors. 

The market opened higher as the Labor Department said continuing jobless claims slid by 148,000 to 6.69 million, which was the first decline since January. The report also showed that weekly initial claims increased 3,000 to 608,000. After the open, the Conference Board released its index of leading economic indicators which rose +1.2%. The Philly Fed Survey, a separate report, showed that manufacturing shrank at the slowest rate in nine months in the Philadelphia area.   

Treasury Secretary Timothy Geithner defended the administration’s plan to extend powers to the Federal Reserve. The plan will increase the Fed's power, but lawmakers were skeptical whether the plan will give the Fed too much power. The administration's plan calls for the Fed to review consumer financial products such as hedge funds and private equity firms. Congress continues to prepare legislation to overhaul the financial services industry.

The 15-week rally remains intact, but under pressure. Leadership remains scant, which continues to be the bane for this current rally. It is of the utmost importance for a fresh batch of leadership to emerge in order for any sustained move higher. This rally appears to be losing steam as it is aging, and investors must remains cautious and extremely selective until a fresh round of accumulation occurs. Furthermore, if the major averages continue to fall, this rally could quickly end, and raising cash would be a wise strategy.

PICTURED: The Nasdaq Composite Index closed above prior chart highs and near an upward trendline (not shown) which are important technical support levels well above its 50-day moving average line.

Charts courtesy www.stockcharts.com 
 

PICTURED: The Healthcare Index ($HMO +6.78%) recently found support near its 200-day moving average (DMA) line, and a big gain on Thursday helped it rally back above its 50 DMA line.

Longtop Financl Tech Ads (LFT +$0.29 or +1.12% to $26.29) held its ground today with a small gain on lighter volume.  That followed a "positive reversal" which was another encouraging sign of institutional support after a brief violation of its 50-day moving average (DMA) line.  However, it recently has encountered another dose of worrisome distributional pressure, and it needs more time to form a sound new base pattern -as noted under the headline "More Time Needed For Another Sound Base To Form" in its prior FSU appearance (read here).

Any subsequent losses leading to deterioration below its short-term average would raise additional concerns and trigger a more worrisome technical sell signal. Keep in mind that its progress could be hindered by future share offerings. This Chinese Computer Software firm recently filed a registration of approximately 16 million shares for resale, and it also revealed a planned acquisition of another Chinese service provider.

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.