Stocks got whacked on Thursday sending all of the major averages below Monday's lows as the dollar rallied. Volume was heavier than the prior session on the NYSE and Nasdaq exchange which signaled large institutions were aggressively selling stocks. Decliners trumped advancers by over a 7-to-1 ratio on the NYSE and over a 6-to-1 ratio on the Nasdaq exchange. There were only 3 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 10 issues that appeared on the prior session. New 52-week highs outnumbered new 52-week lows on the NYSE but trailed on the Nasdaq exchange.

The bears showed up and sent all the leading industry groups lower as the dollar rallied. The Gold & Silver Index ($XAU -5.33%) led the way down, followed by losses from the Semiconductor Index ($SOX -4.44%) and Bank Index ($BKX -3.94%). Energy-related shares lost ground as the Oil Services Index ($OSX -3.92%) and Integrated Oil Index ($XOI -3.63%) slid. The Broker/Dealer Index ($XBD -3.75%), Biotechnology Index ($BTK -2.55%) and Networking Index ($NWX -2.44%) all ended with steep losses. The Internet Index ($IIX -2.43%), Healthcare Index ($HMO -2.37%) and Retail Index ($RLX -1.73%) also ended in the red.

Charts courtesy www.stockcharts.com

PICTURED: The Gold & Silver Index ($XAU -5.33%) suffered a big loss after encountering resistance near its longer term 200 DMA line.

ArcSight, Inc. (ARST -$1.81 or -7.32% to $22.93) gapped down today, trading near its December lows and sinking toward its 200-day moving average (DMA) line. It would need to rebound above its 50 DMA line for its outlook to improve. Meanwhile, further deterioration below its prior lows or 200 DMA line would trigger additional sell signals. Distributional pressure negated its latest breakout. In the 1/21/10 Featured Stock Update (FSU) section (read here) we cautioned that its "close under its 12/31/09 close could prove to be a more ominous sign."

On January 4, 2010 it had gapped up and triggered a technical buy signal as it blasted above its latest pivot point. However, it failed to follow through with additional gains, then losses with above average volume negated its breakout and led to a close back in its prior base, raising concerns.  In addition to the recent technical weakness, its Earnings Per Share (EPS) rank has fallen to 76 from 84 when it appeared in this FSU section on 1/04/10 under the headline "Breakout With Triple Average Volume Triggers Fresh Buy Signal."  The Computer Software - Security firm has continued putting up solid sales revenues and earnings results since first featured in yellow at $19.91 in the 9/01/09 mid-day report with an annotated daily graph (read here).  However, its waning EPS rank of late suggests that on a relative basis it has been lagging while other companies have been showing more explosive earnings growth during the current earnings season.  ARST needs more time to potentially form a new sound base.  Meanwhile, its weak action and market conditions (M criteria) leave disciplined investors waiting for a follow through day before any new buying efforts are justifiable under the investment system guidelines. 

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.