The major averages ended lower on the last trading day of the year. Volume, an important indicator of institutional sponsorship, was reported lighter than Wednesday's totals which indicated large institutions were not aggressively buying or selling stocks. Decliners led advancers by a 2-to-1 ratio on the NYSE and by a 3-to-2 ratio on the Nasdaq exchange. There were 24 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, higher than the total of 18 issues that appeared on the prior session. New 52-week highs solidly outnumbered new 52-week lows on the NYSE and on the Nasdaq exchange.

Economic Data- Weekly Jobless Claims:
At 8:30AM EST, the Labor Department said initial jobless claims fell -28,000 to 452,000 in the week ending December 19. The report topped the Street's 460,000 estimate and supports the notion that the ailing jobs market is improving. Continuing claims fell 127,000 in the week ended December 12 to 5.076 million. Every Thursday, the Labor Department releases the report which compiles data showing the number of individuals who filed for unemployment insurance for the first time. Remember, the report is counter intuitive because an increasing number means more people are filing for unemployment claims and suggests a deteriorating labor market. The converse is also true, lower readings is a sign of strength. Investors tend to look at the four-week moving average because it smoothes out weekly volatility.

Performance Data For The Decade & 2009

2000's Performance Data:
The 2000's will go down in history as a blasé decade for the stock market. Over the past 10 years the major averages are actually down ,which is a historical anomaly. During that period, the tech-heavy Nasdaq Composite Index is the standout loser- shedding a whopping -44% while the benchmark S&P 500 lost -24% and the Dow Industrials gave up -9%.

Multi Decade Consolidation:
Over the past 100 years, there have been multiple times when the stock market spent nearly two decades moving sideways before a new massive multi-decade bull market was born. The first 10 year consolidation occurred between 1906-1916 and was followed by the roaring 20's and then the Great Depression. The next notable consolidation occurred between 1966-1982 (16 years) before the massive bull market of the 1980s and 1990s was born. Are we in the middle of one of those protracted consolidations? Yes, evidenced by the fact that the major averages have been trading in one massive base over the past 10 years.

Emerging markets enjoyed hefty gains over the last decade. Brazil's stock market surged a whopping +301% while China's soared +72%. Other emerging markets enjoyed huge moves during the past 10 years as capital continues to flow into these younger areas as their economies continue to enjoy tremendous growth!

2009 Performance:
For the year, tech-heavy Nasdaq Composite led its peers, surging a whopping +45%. The small cap Russell 2000 index jumped +25%, while the benchmark S&P 500 and Dow Jones Industrial Average rose +24% and +19% respectively this year. Since the March lows, the Russell 2000 vaulted +85% while the Nasdaq composite surged a whopping +81%. The S&P 500 and Dow Industrials rose +70% and +64%, respectively. On a percentage basis, the past nine months have been one of the strongest in history which bodes well for the bulls.

Market Action: Price & Volume
Looking at the market, the action remains constructive. The Dow Jones Industrial Average, small cap Russell 2000 Index, S&P 500 Index and Nasdaq Composite and NYSE Composite indices are all trading just below their respective 2009 highs which bodes well for this rally. The inverse relationship with the US dollar has eased in recent weeks as both stocks and the greenback have rallied in tandem. Ideally, one would like to see leadership and volume expand over the next few weeks as the major averages continue advancing.

PICTURED: The Dow Jones Industrial Average is down -9% over the past decade.

Charts courtesy www.stockcharts.com

PICTURED: The Internet Index ($IIX -1.04%) was one of the best gainers as it led the groups routinely followed in this Industry Group Watch section with the best gain for 2009.

Smartheat Inc (HEAT -$0.16 or -1.09% to $14.52) is consolidating well above prior chart highs and its 50-day moving average (DMA) line coinciding in the $12.60 area as important support levels. The investment system rules say a stock should be held a minimum of 8 weeks after rising more than +20% in the first 2-3 weeks from being bought. HEAT traded as much as +43.9% higher since first featured in yellow in the 11/17/09 mid-day report (read here) when technically rising from a "double bottom" base, reaching a new all-time high.

The number of top-rated funds owning an interest in its shares rose from 3 in Jun '09 to 27 in Sept '09, which is reassuring concerning the I criteria. The 3 latest quarters show sales revenues and earnings increases well above the +25% guideline, satisfying the C criteria. There is limited history for this small Chinese firm in the Pollution Control - Equipment group, however its reported annual earnings (A criteria) history has been strong.

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.