The major averages collectively charged to new 2009 highs which sent the Dow Jones Industrial Average above the psychologically important 10,000 level for the first time since October 2008. It was very encouraging to see volume expand versus the prior session as the major averages hit fresh 2009 highs. The higher volume behind the gains is a powerful sign of institutional accumulation, meaning that mutual funds and other large and very influential investors were more avidly buying stocks. Advancers trumped decliners by about a 3-to-1 ratio on the NYSE and on the Nasdaq exchange. There were 74 high-ranked companies (39% of the total) from the CANSLIM.net Leaders List, which currently includes 189 stocks, making a new 52-week high and appearing on the CANSLIM.net BreakOuts Page. That was sharply higher from the 20 issues that appeared on the prior session. New 52-week highs substantially outnumbered new 52-week lows on both major exchanges, and new lows were again in the single digits.

The market was propelled higher after JPMorgan Chase & Co (JPM +3.29%) and Intel Corp (INTC +1.66%) reported stronger-than-expected Q3 earnings data. JPMorgan jumped to a fresh 2009 on heavy volume after the company reported a surprisingly strong third quarter. Earnings surged +173% to $0.82 per share, up from $0.30 from the same period last year. Meanwhile, sales rose +31% as the company enjoyed healthy gains from fixed-income revenue. Intel, the world’s largest chip manufacturer, also hit a fresh 2009 high after topping the Street's views by as much as $1 billion. Neither of the above mentioned well-known blue chips has the solid earnings track record or high ranks necessary to make it onto the Leaders List.  However, the strength in JPM and other financial shares bodes well (see more in the Industry Group Watch section).

In other bullish news, while the US dollar continued to fall, retail stocks caught a bid after the government reported that retail sales fell less than economists expected last month. The series of stronger than expected results and healthier economic data supported the thesis that the global economy will recover from its largest decline since World War II. A flurry of stocks began breaking out of sound bases which also helps the market's (the M criteria) latest rally. 

PICTURED: The Dow Jones Industrial Average vaulted above resistance and closed above 10,000 as it charged higher with gains on heavier volume!

Financial shares were among the key players spearheading Wednesday's rally as the Bank Index ($BKX +3.19%) and Broker/Dealer Index ($XBD +3.33%) rallied to new 2009 highs and underpinned the major averages' unanimous gains.  The tech sector was led higher by the Networking Index ($NWX +2.22%) and Biotechnology Index ($BTK +2.18%), followed by smaller gains from the Internet Index ($IIX +1.28%) and Semiconductor Index ($SOX +1.37%).  The Retail Index ($RLX +1.70%) and Healthcare Index ($HMO +1.77%) posted solid gains.  Energy-related shares also rose, boosting the Oil Services Index ($OSX +2.29%) and Integrated Oil Index ($XOI +1.89%). Meanwhile, the popular defensive "safe haven" group, the Gold & Silver Index ($XAU -0.02%), was an obvious laggard, failing to participate in the otherwise widely positive session.

Charts courtesy www.stockcharts.com

PICTURED: The Bank Index ($BKX +3.19%) rallied to a new 2009 high after recently finding support near its 50-day moving average (DMA) line and September lows (coinciding with old chart resistance). The bullish action in financial shares adds importance now to the old adage "don't fight the tape." Longtime CANSLIM.net members have seen an ongoing theme emphasized concerning the importance of the financial group as a leading indicator for the overall market outlook.

AsiaInfo Holdings, Inc. (ASIA +$3.15 or +13.25% to $23.77) showed up earlier today in yellow in the mid-day report (read here) as it blasted to a new 52-week high (the N criteria). It closed with a considerable gain backed by 5 times average volume, triggering a technical buy signal. Strong sales and earnings growth is indicative of great demand for the goods and services offered by this Chinese provider of software and IT security products. 

Concerning the L criteria, now 7 of the 12 current Featured Stocks hail from Computer-Software or Internet industry groups.  Its Relative Strength rank has improved to above the minimum 80+ guideline for buyable candidates and it has proven resilient since its last appearance in this FSU section under the headline "Weak Action Never Offered Proper Buy Signal" on 8/17/09. Based on its inability to make progress above its pivot point back then, we observed that "disciplined investors avoided taking action that would have exposed them to any losses." Disciplined entries and exits are critical to investors' success with the investment system. ASIA was featured in the August 2009 CANSLIM.net News (read here). At the time it was dropped from the Featured Stocks list we suggested that, "Technically, it would have to rally above its 50 DMA and rally above recent chart highs in the $20 area for its outlook to improve." Bullish action in recent weeks helped it do just that, and its outlook now is very favorable.  Pullbacks near prior chart highs in the $21-22 area might offer patient investors another chance to accumulate shares without chasing it more than +5% above its pivot point.

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.