The market averages posted small gains on Tuesday with lighter volume totals in comparison to the prior session totals on the NYSE and on the Nasdaq exchange.  An expansion in volume would reveal greater conviction from the institutional crowd, however the recent volume totals have been below average and quite typical of the Summer doldrums. Advancers led decliners by more than 2-to-1 on the NYSE, while on the Nasdaq exchange advancers only led by a 5-to-4 ratio. There were 12 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, doubling the 6 issues that appeared on the prior session.

Goldman Sachs (GS +0.15%) reported earnings of $4.93 per share for the second quarter, excluding a one-time preferred dividend, beating the Street consensus.  The results were based upon improvements in the firm's fixed income, currency, and commodities segments, which generated record quarterly net revenues, and the trading and principal investments segment, which saw net revenue nearly double year-over-year. Many question the sustainability of earnings from its trading and investments division.

A mixed batch of economic data gave the market little catalyst to rally. May business inventories fell a sharper-than-expected -1.0% in what was the ninth straight decline. Retail sales for June increased +0.6%, which was more than expected, helped by higher gasoline and auto purchases. Meanwhile, the June Producer Price Index increased +1.8%, which was twice the expected increase and marked the sharpest jump since late 2007. Core PPI also increased.  The latest consumer price data is due Wednesday morning.

House Democrats proposed a bill to expand health benefits in a plan that includes a public health plan option to compete against private insurers.  The technical outlook is far from favorable for the healthcare group despite its inherent upside due to demographics (a huge wave of aging baby boomers), as government price and wage controls could limit the earnings potential of many healthcare firms.

PICTURED: The IBD 100 Index's lack of progress in recent month illustrates the action in the market's highest-ranked companies.  Technically, gains above its 50 & 200-day moving average (DMA) lines eventually might be a welcome sign of improvement that bodes well, and a much-needed expansion in leadership would be a critical component.

Charts courtesy www.stockcharts.com

PICTURED: The Retail Index rallied near its 50-day moving average line which recently acted as resistance.

Netease.com Inc (NTES +$0.44 or +1.26% to $35.45) rose on light volume as it posted a fourth consecutive gain, closing above its 50-day moving average (DMA) line. It was recently noted after a worrisome violation of a multi-month upward trendline occurred, and noted again when its considerable loss on 7/08/09 with above average volume led to a close below its 50 DMA line and triggered a technical sell signal.  It found support in the neighborhood of prior chart highs near $32 which are an important technical support level to watch along with its 50 DMA line.  It negated all gains since its 5/28/09 gap up and considerable gain with +79% above average volume confirmed its last sound technical buy signal as it rose from a second-stage base. This high-ranked leader may need to spend more time consolidating before a sound new base such as a "double bottom" pattern might form and offer another ideal entry point. Meanwhile, deterioration leading it below recent lows and closing back in its previous base would raise more serious concerns and trigger additional technical sell signals.

The number of top-rated funds owning an interest in its shares increased from 18 in June '08 to 67 in March '09, which is very reassuring news in respect to the I criteria. NTES was first featured at $26.75 in the 3/31/09 CANSLIM.net Mid-Day Breakouts Report (read here).  This high-ranked Chinese Internet - Content firm was also summarized in greater detail including an annotated graph in the April 2009 issue of CANSLIM.net News (read here).

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.