The major averages suffered a distribution day as the US dollar advanced. Volume was heavier than the prior session on the NYSE and on the Nasdaq exchange, which was not a welcome sign since the major averages slid. Decliners led advancers by about a 2-to-1 ratio on the NYSE and by nearly a 3-to-1 ratio on the Nasdaq exchange. There were 39 high-ranked companies from the CANSLIM.net Leaders List, making a new 52-week high and appearing on the CANSLIM.net BreakOuts Page, down from the 50 issues that appeared on the prior session. New 52-week highs substantially outnumbered new 52-week lows on both major exchanges.

The US dollar rallied which sent a slew of stocks and commodities lower. The dollar rebounded from a 14-month low against the euro after a disappointing report from the housing market was released. The Commerce Department released a report which showed housing starts rose +0.5% in September to an annual rate of 590,000 and lowered August's reading. This fell short of the Street's estimate for a rate of 610,000. Permits, a sign of future construction, fell for the second time in the past three months which signaled the housing recovery is still questionable. The Labor Department released its Producer Price Index (PPI) which fell -0.6%. Bloomberg.com defines the PPI as "index that measures the average price level for a fixed basket of capital and consumer goods received by producers." This was the second decline in three months and followed a +1.7% rise in August. Core PPI which excludes food and energy slid -0.1%.

Companies continue reporting Q3 results in droves as more than 130 companies in the S&P 500 are scheduled to report their results this week! So far, earnings have topped analysts’ estimates for +79% of the companies that released results, according to Bloomberg.com. Last quarter, more than +72% exceeded the average estimate which matched the highest reading going back to 1993. It is important to note that even though earnings are likely to exceed estimates again this quarter, they are still down and barring some unforeseen event, this will be the ninth straight quarter of declining profits which is the longest streak since the Great Depression.

PICTURED: The S&P 500 Index closed above near-term support (former resistance).

Charts courtesy www.stockcharts.com

PICTURED: The Biotechnology Index's ($BTK -2.91%) loss today led to another close under its 50-day moving average (DMA) line.

SolarWinds, Inc. (SWI -$2.11 or -9.25% or $20.70) gapped down today after reporting earnings results for the quarterly period ended Sept 30, 2009.  It slumped under its old pivot point again and violated its 50 DMA line, raising concerns while closing near the session low with a considerable loss on nearly 4 times average volume. Failure to find prompt support near its short-term average and near recent chart lows in the $20.50 area would raise more serious concerns, meanwhile any further weakness could trigger a more definitive technical sell signal. This high-ranked Computer Software - Enterprise firm has had a difficult time producing gains backed by above average volume since it was recently featured in the October 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.