The major averages ended mixed after Daimler AG (DAI +5.70%) and Citigroup (C +7.02%) reported better-than-expected results and news broke that the Securities and Exchange Commission did not unanimously approve pursuing a case against Goldman Sachs Group Inc. (GS +1.63%). As expected, volume, an important indicator of institutional sponsorship, slid compared to Friday's heavier options-related totals. Decliners led advancers by a 3-to-2 ratio on the Nasdaq exchange and by a 17-to-13 ratio on the NYSE. New 52-week highs still easily trumped new lows on both exchanges. There were only 16 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 37 issues that appeared on the prior session. A healthy crop of new leaders making new highs bodes well for any market rally, but that number abruptly contracted amid the latest bout of distribution.

Goldman Sachs ended the session higher but below its 50-day moving average (DMA) line after word spread that the SEC voted 3-2 along party lines to charge the investment giant with fraud. Citigroup gapped higher and closed near its intra-day high after reporting solid Q1 results. The company said earnings more than doubled in the first quarter and said it would not be here without the help of the US taxpayer. Auto giant, Daimler AG rallied after posting preliminary profit of 1.2 billion euros ($1.62 billion).

After Monday's close, International Business Machine (IBM +1.22%) reported stronger than expected Q1 results. The company raised its full year EPS to $11.20, from $11.12. Remember, it is important to note that the major averages have been steadily rallying since early February and a pullback of some sort should be expected. The prior commentary's observation, "Since the March 1, 2010 follow-though-day (FTD) a handful of distribution days has not been the least bit damaging to the market's confirmed rally" - was immediately followed with the 6th distribution day for the S&P 500 Index, a sign of mounting pressure on this 8-week rally. Trade accordingly. 

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PICTURED: The Nasdaq Composite Index traded under a steep upward trendline but finished the session strong.

On Monday the market overcame jitters after fraud charges last week against Goldman Sachs had rattled investors, and financial groups including the Broker/Dealer Index ($XBD +0.73%) and Bank Index ($BKX +0.99%) posted small gains.  The Healthcare Index ($HMO +2.79%) was a standout gainer, but most other groups backpedaled. The tech sector was mainly dragged lower by the Semiconductor Index ($SOX -1.04%) and small losses from the Networking Index ($NWX -0.54%) and Internet Index ($IIX -0.49%).  The Biotechnology Index ($BTK -0.14%), Gold & Silver Index ($XAU -0.12%), and the Retail Index ($RLX -0.09%) edged lower, and energy shares were quiet as the Oil Services Index ($OSX -0.09%) and Integrated Oil Index ($XOI +0.04%) were virtually unchanged.

Charts courtesy www.stockcharts.com

PICTURED: The Gold & Silver Index ($XAU -0.12%) slumped back toward its 50-day and 200-day moving average lines and the previously shown trendline which it has impressively rallied above at the start of April.

Cninsure Inc (CISG -$0.23 or -0.89% to $25.47) ended with a small loss today. Distributional pressure is weighing on the current rally, and 3 out of 4 stocks tend to follow the direction of the broader market (M criteria). Heavy distributional pressure on 4/16/10 raised concerns as the first ugly action seen in CISG since its appearance with an annotated graph under the headline, "More Extended After Gain Today With Three Times Average", in the Featured Stock Update section of the 3/23/10 After Market Update.  Prior chart highs and its 50-day moving average (DMA) line in the $24 area define an important support level.

Some investors might be bold enough to consider accumulating shares, as institutional investors often accumulate shares in healthy companies when they pull back near their short term average lines. An aggressive investor might have courage to "buy the dips" as some patient investors may have been waiting in recent weeks for an opportunity to accumulate shares under its "max buy" level.  Disciplined investors may be wise to continue waiting for another ideal entry point, and to see it the broader market (M criteria) improves.  Meanwhile, more worrisome damage to the stock's chart and additional distribution in the market would serve as more serious warning signals prompting investors to reduce exposure, rather than accumulate more shares.

CISG traded up as much as +17.4% since featured in yellow as it rose from a 20-week double bottom base with 8 times average volume and was featured in the 3/03/10 mid-day report (read here) color coded yellow with pivot point cited based on its 11/18/09 high. This China-based insurance broker has shown strong earnings and sales growth above the +25% guideline but generally decelerating over the course of recent years. The lack of leadership in the Insurance-Brokers industry group also remains a concern with respect to the investment system's L criteria.

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.