The major averages fluctuated between positive and negative territory on Wednesday, days after the market fell into a correction. The indices ended with modest gains while volume was reported slightly lighter on the NYSE and the Nasdaq volume total rose - both totals were below average volume totals. Advancers led decliners by a 3-to-2 ratio on the NYSE and by nearly a 2-to-1 ratio on the Nasdaq exchange. There were only 6 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 up from the 5 issues that appeared on the prior session. New 52-week highs outnumbered new 52-week lows on both exchanges, and new lows were in the single digits.

The US dollar tumbled on Wednesday which helped the major averages and a slew of commodities (i.e. gold and crude oil) rally. CANSLIM.net's Market Commentary has noted multiple times in the past about how important it is in today's modern age to keep an eye on other markets since they are so interdependent. Energy shares were among the day's strongest advancers since crude oil managed to recover much that it lost earlier in the week.

China's stock market fell another -5% which extended its decline from its 2009 high to over -20% which is the classic definition of a bear market. Normally, bear markets occur whenever a market or individual stock fall -20% from its most recent high. It is also important to note that China was one of the first of the globe's stock markets to recover from last year's brutal sell off.  The fact it is back in "bear market" territory suggests that it may also lead the way lower again.

So far, the U.S. and Chinese governments have pledged more than $13 trillion (the entire size of the US economy) to combat the worst financial crisis since the Great Depression. This massive influx of government aid played a pivotal role in fueling the major rally we have seen in stock markets around the globe. Remember to remain cautious until a new batch of high ranked leadership emerges and the market manages to produce a sound follow-through day.

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PICTURED: The S&P 500 Index's 2 most recent gains came with below average volume, evidence indicative of very little institutional buying demand since the market correction began.  Remember to remain cautious until a new batch of high ranked leadership emerges and the market manages to produce a sound follow-through day.

Charts courtesy www.stockcharts.com

PICTURED: The Retail Index ($RLX +0.65%) is consolidating above prior chart highs.

Capella Education Co. (CPLA +$0.38 or +0.60% to $63.35) is consolidating above prior chart highs now which are likely to serve as a support level. Just -2.5% from its 52-week high, volume has been mostly quiet during its healthy consolidation, and there is virtually no resistance due to overhead supply.  Its gap up gain on 7/28/09 with more than +50% above average volume helped it rise above its pivot point and trigger a technical buy signal. However, since first featured in yellow in the 7/09/09 Mid-Day BreakOuts Report (read here) its Relative Strength rank has slumped to a mediocre 60 (see the red circle), under the 80+ guideline, a sign that it has recently been lagging. By comparison, Bank Of America Corp (BAC -0.89%) is now -57.6% off its 52 week high, yet it currently is being rewarded with a 90 Relative Strength rank. This anomaly is due to the fact the newspapers' relative strength ranking system puts greater emphasis on the most recent 6 month period, and CPLA has moved mostly sideways in that time frame, meanwhile many badly beaten down stocks like BAC have rallied back considerably from their extreme lows in the past 6 months.

This is a strong performing leader in the Commercial Services-Schools Group. While the group has shown some leadership, concern is raised by the fact it currently has a D for a Relative Strength Rating. CPLA's small supply of only 13.9 million shares in the float could contribute to greater price volatility in the event of institutional accumulation or distribution. The number of top-rated funds owning an interest rose from 91 in Sept '08, to 136 as of June '09, which is reassuring with respect to the I criteria. It has a very good earnings history that satisfies the C & A criteria.

A follow through day of constructive gains with heavier volume from the major averages, and from this issue, would be very crucial reassurances confirming heavy buying demand from the large institutional investors - demand which can fuel a sustained rally.  Meanwhile, subsequent deterioration back under its pivot point would negate its breakout, raise concerns, and trigger a technical sell signal.

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.