Stocks closed higher for the week and overcame the latest round of mild distribution as leading stocks continued to act well and the Dow Jones Industrial Average briefly touched the 11,000 mark. Volume totals on the NYSE and on the Nasdaq exchange were reported lower compared to Thursday's totals, revealing a lack of buying conviction from the institutional crowd after recent distributional pressure. Breadth was positive as advancers led decliners by a 2-to-1 ratio on the NYSE and by a 7-to-6 ratio on the Nasdaq exchange. New 52-week highs trumped new lows on both exchanges yet again. There were 48 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 from the 36 issues that appeared on the prior session.  A healthy crop of new leaders making new highs bodes well for any market rally, so the recent expansion in leadership has been a welcome post-holiday improvement. However, the rising number of distribution days has raised some concerns.

Stocks closed higher on Monday as investors returned from a long holiday weekend and the latest round of stronger-than-expected economic data was released. Monday was the first trading day after March's non-farm payrolls report was released. Stocks rallied around the world after the Labor Department reported the strongest monthly reading in payrolls since Q1 2007. Elsewhere, the ISM released its service index which topped analysts' estimates. Separately, pending home sales unexpectedly rose which bodes well for the ailing housing market. The healthy housing data helped a slew of housing stocks rally as investors believe "the worst" is over concerning the housing market's downturn.

On Tuesday, stocks ended mixed after the Australian Central Bank raised interest rates for a 5th time by a quarter point to +4.25% and Greece rejected an EU-IMF aid package. The euro tanked (greenback rallied) after Greece denied an EU-IMF backed plan to help it recovery from its worst financial crisis since WWII. Stateside, the Federal Reserve released the minutes of its latest meeting which showed a stronger, not weaker economic outlook.

Stocks suffered a mild distribution day on Wednesday after consumer credit fell and concern about Greece defaulting accelerated. The Federal Reserve said consumer borrowing slid by a larger than expected reading of $11.5 billion in February. The fear that lower consumer spending may curtail economic growth played a pivotal role in sending stocks lower on Wednesday. The major averages edged higher on Thursday after US retailers reported stronger than expected same store sales last month. In addition, the Labor Department said initial jobless claims unexpectedly rose +18,000 to +460,000 last week. In Europe, the Greece fears subsided after European Central Bank President Jean-Claude Trichet said he does not expect Greece to default. On Friday, a slew of asset classes ranging from stocks to commodities rose on speculation that deeply indebted European nations will receive an international bailout. Only time will tell whether or not this plays out.

In recent weeks, fewer high-ranked leaders have emerged from sound bases while many leaders have consolidated after earlier breakouts in a mostly healthy fashion. The benchmark S&P 500 Index currently has 5 distribution days while the Nasdaq Composite and Dow Jones Industrial Average have 4 since the March 1, 2010 follow-though-day (FTD). These distribution days have not been damaging, however the simple fact that we currently have 5 distribution days for the S&P 500 suggests a more cautious approach may be prudent. Trade accordingly.

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PICTURED: The Dow Jones Industrial Average hit the psychologically important 11,000 level.

Modest gains from the Retail Index ($RLX +0.42%) and a positive bias in the Bank Index ($BKX +0.45%) and Broker/Dealer Index ($XBD +0.51%) provided some underlying influence lifting to the major averages on Friday.  Tech shares had a positive bias as the Semiconductor Index ($SOX +1.15%) outpaced the Networking Index ($NWX +0.59%), Internet Index ($IIX +0.63%), and Biotechnology Index ($BTK +0.51%). The Integrated Oil Index ($XOI +1.41%) and Gold & Silver Index ($XAU +0.60%) posted gains, meanwhile the Healthcare Index ($HMO -0.65%) and Oil Services Index ($OSX -0.15%) lagged.

Charts courtesy www.stockcharts.com

PICTURED: The Internet Index ($IIX +0.63%) has rallied +17.8% from its February low and it is now perched at a recovery high.

Vanceinfo Tech Inc Ads (VIT +$1.42 or +6.21% to $24.28) blasted to a new 52-week high today and triggered a technical buy signal as a solid gain with heavy volume more than 4 times average helped it trade above its pivot point after a 5-week consolidation. It was color coded yellow with new pivot point and "max buy" levels noted in today's mid-day report (read here). It recently found support after undercutting prior chart highs in the $21 area. Recent lows and its 50-day moving average (DMA) line define an important support level to watch on pullbacks. Data now provided by the service used by our experts shows +25% quarterly earnings increases in the 5 most current comparisons while sales revenues increases have been very strong and steady (above +40%).

VIT rebounded impressively since it was dropped from the Featured Stocks list on 2/02/10. The 1/22/10 violation of its 50-day moving average (DMA) line had triggered a technical sell signal. It continued to struggle until finding support at its 200 DMA line. Its eventual rebound back above its 50 DMA was proof of institutional (I criteria) support and buying demand, especially as it went on rallying to overcome all resistance due to overhead supply.  When the high-ranked Computer - Tech Services firm was featured in yellow in the 12/24/09 mid-day report (read here) it had come a long way in the past year, yet it had built a sufficient length base following its steep ascent from its March low ($4.31). Its small supply of only 11.6 million shares (the S criteria) in the publicly traded float could be a factor leading to greater volatility, especially in the event of mutual funds accumulating or distributing (selling) shares. This heightens the need for caution when buying and the discipline to limit losses, as always, if any stock ever falls more than -7% from your buy price.

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.