The major averages fluctuated between positive and negative territory, but the relatively quiet day on Wall Street ended on a high note for all of the major averages. Volume was reported lighter than Friday's session, which showed that institutional investors were not especially decisive behind their buying efforts as stocks rose. Advancers led decliners by a 2-to-1 ratio on the NYSE and by a 3-to-2 ratio on the Nasdaq exchange. There were only 13 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, half the total of 26 issues that appeared on the prior session. New 52-week highs still outnumbered new 52-week lows on both exchanges while new lows were in the single digits yet again.

Monday marked the anniversary of Lehman Brothers' infamous bankruptcy which triggered last year's violent stock market sell off and claimed scores of large financial institutions. The multi-billion dollar questions is: Was it a good idea to let Lehman fail? There is no doubt that this will be a question that will be debated for decades as investors continue to argue various points. President Obama spoke on Wall Street and reviewed everything that happened since the financial crisis began and outlined his plans for a massive financial overhaul. In the past, Obama has called on Congress to pass a major restructuring for how financial institutions are regulated. Many believe that the major problem that led to the credit crisis and was a massive deregulation of the financial system under the Bush administration. However, we believe that the primary reason why so many banks failed has been due to their reckless approach to risk.

There are countless studies which show that one of the most important components to being a successful investor the proper adherence to a strong money management system. That is why one of the most important components of this powerful investment system is to always limit your losses, no excuses. If there is any one factor that will destroy a portfolio it is to let your losses grow. The key factors that will lead to positive results in the market are limiting your losses and letting your winners run. The way that this rule is put in practice is by knowing when to sell. Investors are best served when they buy based on the combination of strong fundamentals and technicals, and then sell based on the technicals. Fundamentals often tend to lag a stock's technical condition, and deteriorating fundamentals later come to light later to help explain weak technical chart action after the fact.

PICTURED: The Nasdaq Composite ended at a new 2009 high close, overcoming early weakness to post a gain on lighter volume.

The Broker/Dealer Index ($XBD +2.11%) rallied to new 2009 highs as it and the Bank Index ($BKX +0.81%) were among Monday's influential gaining groups.  A modest gain from the Retail Index ($RLX +0.48%) also helped the market's positive bias. Last Friday's IGW section showed charts of the influential XBD and RLX, each perched at 2009 highs (read here).

The Biotechnology Index ($BTK +2.43%) was a standout gainer on Monday, meanwhile the Healthcare Index ($HMO +0.39%) just edged higher.  Energy shares rose, lifting the Oil Services Index ($OSX +1.04%) to a better gain than the modest improvement shown by the Integrated Oil Index ($XOI +0.30%). The Gold & Silver Index ($XAU -1.22%) lost ground, making it a laggard on the session.  The Networking Index ($NWX -0.40%) also posted a small loss, lagging behind the modest gains from the Internet Index ($IIX +0.27%) and the Semiconductor Index ($SOX +0.45%).

Charts courtesy www.stockcharts.com

PICTURED: The Biotechnology Index ($BTK +2.43%) rallied to a new 2009 high close.

Netease.com Inc (NTES -$0.89 or -2.09% to $42.57) has seen volume totals drying up while recently consolidating in a healthy fashion above support at its 50-day moving average (DMA) line. However, gains with heavy volume really have not shown up since mid-July, revealing a lack of buying demand from the institutional crowd. Meanwhile the light volume totals of late may also be seen as a somewhat encouraging sign that distributional pressure has subsided since shortly after it was shown in this section on 8/13/09 (when 8.7 million shares traded) under the headline "Gap Down Loss on Heavy Volume Triggers Sell Signal" (read here).  The market's negative reaction was due to the fact that sales revenues for the quarter ended June 30, 2009 were reported at -1% versus the year ago period, which was a continuation of its steady sequential deceleration in sales revenues increases from +79%, +59%, +42% in the Jun, Sep, Dec '08 comparisons and +24% in Mar '09.

Gaps are often a dead giveaway that large institutional investors (the I criteria) are rushing in one direction, and it was described as "an especially ominous sign, after a considerable run up, when a stock experiences its biggest point loss on the highest volume ever."   However, NTES has made an admirable stand above important chart support since the prior review in this FSU section.  Below its 50 DMA line, the nearby chart support at prior highs and a longer-term upward trendline help to define an important support level in the $38 area where any violation would raise more serious concerns and trigger more worrisome technical sell signals. The high-ranked Internet - Content firm traded up as much as +74.8% following its appearance in the April 2009 issue of the monthly newsletter, 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.