The major averages ended mixed for a third consecutive session after positive retail sales and weekly jobless claims were released. Volume, an important indicator of institutional sponsorship, was reported slightly higher than Wednesday's totals which indicated large institutions were not aggressively dumping stocks. Advancers led decliners by a 3-to-2 ratio on the NYSE and by a 4-to-3 ratio on the Nasdaq exchange. There were 32 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, lower than the total of 57 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, and new lows were again in the single digits.

At 8:30AM EST, the Labor Department said new claims for unemployment benefits rose less than forecast to +434,000 in the week ending January 2, 2010. 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 the labor market is waning. The converse is also true, lower readings is a sign of strength. Investors tend to look at the four-week moving average because it smooths out weekly volatility. Investors are now focused on December's employment report which is slated to be released before Friday's opening bell. Analysts believe that last month's reading will be unchanged which bodes well for the ailing jobs market. So far, since the recession began, US employers slashed over 7 million jobs as the unemployment rate hit a two decade high of 10.2% last quarter.

Before Thursday's open, chain stores across the country released retail sales figures for December. On average, retail sales were reported higher at many chain stores last month which helped send their share prices higher today. The stronger than expected data also bodes well for last quarter's GDP. High-end jeweler Tiffany & Co. (TIF +4.29%) surged to a new 52-week high on heavy volume after reporting solid results and raising guidance. Even low-end retailers rallied, TJX Cos (TJX +5.11%) which operates TJ MAXX and Marshalls, gapped above its 50 day moving average line on monstrous trade. Sears Holdings (SHLD +11.60%) gapped to its highest price since September 2008 after the largest US department-store chain’s fourth-quarter profit topped analysts’ estimates as its Kmart division sold more toys, clothing and home goods during the holiday season. Even Bed Bath & Beyond (BBBY +6.91%) gapped higher, hitting its highest price since February 2007, after the country's largest home-furnishings retailer raised guidance for 2010 and reported stronger than expected third-quarter earnings.

Stocks remain strong as investors digested the latest round of economic data. The benchmark S&P 500, Dow Jones Industrial Average, NYSE composite, mid-cap S&P 400, small-cap Russell 2000 and small-cap S&P 600 indices all enjoyed fresh recovery closing highs! The current rally is ending its 44th week (since the March 12, 2009 follow-through day) and on all accounts still looks very strong. In addition, most bull markets last for approximately 36 months, so the fact that we are beginning our 10th month suggests we have more room to go. December's jobs report will likely set the stage for the next near term move for the major averages. Until support is broken (50 DMA lines for the major averages) this rally deserves the bullish benefit of the doubt.

PICTURED: For the new year, the S&P 500 Index is up +2.3%. Getting off to a good start generally bodes well for the market, however investors should continue to monitor the major averages and the action in the market's leading stocks for the best read on the M criteria.  Stay tuned to the daily CANSLIM.net reports to keep yourself well informed throughout 2010.  We invite your feedback and any suggestions you may have on how CANSLIM.net can make your day-to-day application of the proven investment system easier.  Please take time to use the inquiry form if there is anything you think we should know.  Thank you!

Charts courtesy www.stockcharts.com

PICTURED 1: The Oil Services Index's ($OSX +0.01%) recent sprint higher helped it close above its October 2009 high closes, which could signal further upside in the group.

Baidu.com, Inc. (BIDU -$7.87 or -1.91% to $404.63) fell today on lighter than average volume.  The prior session's gain was marked by higher volume than any up session since 11/09/09, but it ended near the session low after encountering resistance at its 50-day moving average (DMA) line. Gains back above its 50 DMA line are needed for its outlook to improve. Since quietly rallying to new highs in November it has stalled. The longer it struggles below its 50 DMA line, the worse its outlook becomes. This Chinese provider of Internet search and content services could continue basing for a longer period.  Patience is important, because without convincing gains leading to a fresh breakout there is little assurance it is capable of sustaining a meaningful rally higher. 

Technically, it has built a sloppy base over the past 11 weeks, and gains above its previously cited pivot point with at least +50% above average volume could trigger a new buy signal. BIDU proved resilient near its 50 DMA line after its 10/27/09 gap down, which  was a sign of great institutional support.  It is reassuring that the number of top-rated funds owning BIDU's shares rose from 103 in Dec '08 to 171 in Sep '09, solid evidence its shares were being accumulated by the institutional (I criteria) crowd. 

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.