The major averages rallied during the first half of the week but the bears showed up in the latter half and erased most of the gains and sent stocks lower. Volume, a critical component of institutional demand, was heavier than Thursday's levels on the NYSE but lighter on the Nasdaq exchange which was unexpected since a series of options expired on Friday. Decliners led advancers by about a 3-to-2 ratio on the NYSE and by a 5-to-4 ratio on the Nasdaq exchange. There were only 12 high-ranked companies from the CANSLIM.net Leaders List making a new 52-week high and appearing on the CANSLIM.net BreakOuts Page, slightly up from the 10 issues that appeared on the prior session. In terms of new leadership, it was encouraging to see new 52-week highs outnumber new 52-week lows on the NYSE and Nasdaq exchange.

Stocks enjoyed healthy gains on Monday which helped send the benchmark S&P 500 index above near term resistance (1,100) and to fresh 2009 highs! The US dollar fell after Asian government's pledged to standby their economic stimulus packages. The 21-member Asia-Pacific Economic Cooperation group, which currently comprises over half of the global economy (approximately +54%), announced that they will maintain their massive economic stimulus packages well into 2010. The greenback fell to a fresh 15-month low which sent a host of dollar denominated assets higher: mainly stocks and commodities! Turning to the economic front, the US government said retail sales grew +1.4% in October. Several of the country's largest credit card issuers rallied after reporting charge backs (i.e. bad loans) fell for a 6th straight month. Elsewhere, Federal Reserve Chairman Ben Bernanke gave a speech to the Economic Club in New York and said economic “headwinds” remain in the economy. He also said that, “Significant economic challenges remain" He went on to say, "The flow of credit remains constrained, economic activity weak and unemployment much too high. Future setbacks are possible.” He also noted that we are in a much better place in Q4 2009 then where we in the same period last year.

On Tuesday, stocks opened lower but closed higher even as the dollar rallied. Inflation concerns eased after the government released a weaker than expected producer price index (PPI). The headline reading increased +0.3% last month after sliding -0.6% in September. October's reading was lower than the Street's estimate of a +0.5% rebound. However, the "big" news in the report was that the core rate, which excludes food and energy, unexpectedly fell -0.6%, following a -0.1% decline in September. A separate report showed that the country's manufacturing sector continued to grow, albeit at a very slow rate. At 1:00PM EST, the National Association of Home Builders released their housing market index which was unchanged at 17 in November which gave investors some clue on how the housing starts will fare when the government releases that report tomorrow.

The bears showed up on Wednesday and spent the rest of the week sending stocks lower. A slew of economic data was released which led many to question the health of this recovery. The Labor Department released a stronger-than-expected consumer price index (CPI) which ignited inflationary concerns. Headline CPI rose +0.3% which was higher than the Street's forecast for a +0.2% gain.  Core CPI, which excludes food and energy, was unchanged from last month's reading of a +0.2% gain. However, core prices also topped the Street's estimate for a +0.1% gain and is the component of the report that the Federal Reserve tends to focus on. The uptick in consumer prices sparked concern that companies will have little room to raise prices this holiday season (which curbs earnings) due to the fact that unemployment is at a 26-year high of +10.2% and wages fell -5.2% in September from the same period last year. The Commerce Department released a separate report which showed that housing starts unexpectedly tanked last month. Housing starts (a.k.a registrations for new construction for residential housing units), slid -10.6% in October which was well below estimates. Permits for new construction slid -28.9% from the same period last year which led many to question the sustainability of the housing recovery.

Charts courtesy www.stockcharts.com

PICTURED 1: The Healthcare Index ($HMO +0.09%) was a standout on Friday as it firmly held its ground, as shown on its 6-month chart. Its ability to continue making progress above its September highs, or not, may send investors a telling message. As seen in the table below, its YTD gain of about +35% does not put it among 2009's best percentage gainers.

Green Mountain Coffee Roasters (GMCR -$0.12 or -0.18% to $65.01) has slumped badly since its last appearance in the FSU section on November 11, 2009 under the headline "Choppy Action Has Not Allowed Sound Base To Form." It gapped down on 12/12/09 after reporting strong quarterly results for the period ended Sept 30, 2009, suffering a considerable loss on heavy volume, closing below its 50 DMA line. It negated its recent breakout from a cup-with-high-handle pattern and slumped below its July highs, triggering technical sell signals.  It has also slumped under a longer-term upward trendline. It would need to rally back above its recent chart highs near $76 for its outlook to improve.

Do not be confused by the 3-for-2 split that occurred in the interim, as GMCR has traded up as much as +204% since appearing with an annotated graph under the headline "It May Soon Be Time To Go Green" when featured in the January 2009 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.