The major averages ended higher, adding to the best quarterly advance for the S&P 500 Index since 1998! The small-cap indices lagged. As expected, volume totals were lower compared to Friday's artificially high levels (Russell Indexes' re-balancing). Advancers led decliners by nearly a 2-to-1 ratio on the NYSE and trailed by a 4-to-5 ratio on the Nasdaq exchange. There were 17 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, one less than the 18 issues that appeared on the prior session.  There has been a welcome improvement in recent days, while an even greater expansion in the new highs list in the weeks ahead would offer more encouraging news for growth oriented investors.

The benchmark S&P 500 Index has surged over +16% in the second quarter, which is one of its strongest quarterly advances in 11 years! The other major averages have also enjoyed huge moves up from their March lows and are currently perched below longer-term resistance levels. Last week's CANSLIM.net Second Quarter Webcast took a close look at how the market topped in October 2007 and all of the important events occurring in 2008 and this far in 2009. More specifically, the webcast showed viewers exactly what has happened since the March 12, 2009 follow-through day. To view the webcast On-Demand click (here).

Economists now believe that the worst of the recession is behind us, which has set the stage for the powerful rally we have experienced in the second quarter. A flurry of stronger than expected economic data also provided fuel for the market's robust rally. The Federal Reserve Bank of Boston President Eric Rosengren said, US GDP "is expected to start being positive in the second half of this year." When questioned about unemployment he said, "The unemployment rate is likely to lag so that the peak in the unemployment rate is likely to be sometime early next year." Rosengren spoke in Brussels today.

Charts courtesy www.stockcharts.com

PICTURED: The Bank Index ($BKX +1.59%) closed Moday's session just above its 50-day moving average (DMA) line with a 5th consecutive small gain.

HMS Holdings Corp (HMSY +$0.15 or +0.37% to $40.90) posted a fourth consecutive gain, on lighter volume today, helped it reach a new all-time high and close above its "max buy" level. Its color code was changed to green after rising up more than +5% from its latest base. Disciplined investors avoid chasing stocks that are too extended from a sound base.

Prior chart highs near $38 are an important support level to watch, where deterioration into its prior base would raise concerns. A gap up gain on 6/16/09 with heavy volume triggered a technical buy signal. No overhead supply is left to hinder the progress for this Commercial Services - Healthcare firm.  During its latest base its daily volume totals dried up, yet the volume behind its breakout to new highs (the N criteria) day was nearly two and a half times its average volume total.  The heavy volume and gap up also provided a nice reassurance of institutional (the I criteria) buying demand.

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.