The major averages got smacked on Monday as the US dollar rallied and commodity prices plunged. Volume totals were reported higher on both major US exchanges which added another distribution day to the count. Decliners trumped advancers by over 5-to-1 ratio on the NYSE and by nearly a 4-to-1 ratio on the Nasdaq exchange. There were only 2 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 3 issues that appeared on the prior session.  A further expansion in the new highs list would offer encouraging news for growth oriented investors. 

The major averages fell below important support levels on Monday which is a serious warning sign for this 15-week rally. Tepid data from New York’s manufacturing sector also weighed on stocks. The Federal Reserve Bank of New York released its general economic index on Monday. The index, which measures manufacturing activity in the New York region, fell to -9.4. Readings below zero signal a contraction. In addition, the report fell short of the Street's -4.6 estimate which bodes poorly for the health of the overall economy.

The US dollar rallied after the International Monetary Fund (IMF) raised its outlook for the US economy. The Russian Finance Minister Alexei Kudrin also made the case for a stronger dollar after he said the greenback is in “good shape.” Even though the news sent the US dollar higher, it adversely affected US equities and sent a slew of commodity prices lower. Over the weekend, the Group of Eight (G8) finance ministers met in Italy to discuss the global economy. The group focused on cutting soaring budget deficits and reducing bank bailouts.

PICTURED: The S&P 500 closed below support (930) today.

Commodity shares fell sharply as the US dollar rallied on Monday. The Gold & Silver ($XAU -3.60%), Oil Services ($OSX -3.22%), and Integrated Oil ($XOI -2.76%) indexes slumped sharply. Financial shares got hit sending the Bank ($BKX -2.54%) and Broker/Dealer ($XBD -1.85%) groups lower. The Biotech ($BTK -3.56%) and Healthcare ($HMO -2.95%) groups also suffered large losses as the major averages breached support. The Networking ($NWX -2.35%), Internet ($IIX -2.25%) and Semiconductor ($SOX -1.56%) groups also ended in the red which invariably weighed on the tech sector. Losses in the Retail index ($RLX -1.36%) also added to the major averages' negative bias.

Charts courtesy www.stockcharts.com 

PICTURED: The Gold & Silver ($XAU -3.60%) index negated its latest breakout today.

Synaptics Inc. (SYNA -$0.81 or -2.11% to $37.65) pulled back and found support after retesting its prior chart highs near $36. It was encouraging to see this stock close in the upper half of its range today after successfully retesting support. Synaptics closed above its "max buy" level, so it is still too extended to be considered buyable under the proper guidelines at this point. It was first featured in yellow in the May 18, 2009 mid-day report (read here). The number of top-rated funds owning its shares rose from 123 in June '08 to 188 in March '09, which is good news concerning the I criteria. Strong earnings and sales revenues growth in the 4 latest quarterly comparisons satisfies the C criteria. Its annual earnings (the A criteria) history showed a downturn in 2006, leaving concerns, but it followed that up with strong growth the next 2 years.

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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.