The major averages unanimously rallied to new 2009 highs with gains backed by higher volume indicative of institutional buying demand. Gains from 25 out of 30 components boosted the the Dow Jones Industrial Average.  The volume totals on the NYSE and on the Nasdaq exchange were was reported higher than the prior session totals. Advancing issues led decliners on the NYSE by a 3-to-1 ratio and on the Nasdaq exchange by a better than 2-to-1 ratio. There were 42 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, more than double the 20 issues that appeared on the prior session. On both exchanges new 52-week highs were in the triple digits while new 52-week lows were in the single digits.

Visa (V +0.64%) and MasterCard (MA +2.95%) both reported upside earnings that provided support to the financial sector, however both firms' sales revenues increases have shown a distinct deceleration which is worrisome.  Meanwhile, positive earnings surprises from Noble (NBL +35.89%) and Apache (APA +5.61%) and a +5.8% rebound in oil prices to $67.00 per barrel gave the energy sector a lift. That followed a big -6% drop in crude prices on the previous session. The CRB Commodity Index posted a +3.9% gain, its best single-session percentage gain since March.  Better-than-expected earnings and a lack of negative headlines helped provoke more broad-based buying efforts. As sidelined cash was put to work, the latest gains could also be attributed to short covering.

The financial sector helped underpin the major averages' gains after insurance firms including Aflac (AFL +6.66%), Hartford (HIG +13.57%), Lincoln National (LNC +12.41%) reported quarterly results. None of the above mentioned companies in this commentary have the strong underlying fundamentals necessary for consideration under the investment system's guidelines, however.

The market's positive bias was bolstered by news that the four-week moving average for initial jobless claims fell to its lowest level in months, although weekly claims climbed more than expected. Continuing claims declined more than expected for another straight week. Continuing claims now stand at levels not seen since April, but many economists caution that the labor market remains far from good.

The advance second quarter GDP announcement is due Friday morning at 8:30AM ET and may serve as a catalyst for more decisive action to close out the week.  The current estimates are calling for an annualized decline of -1.5% following the -5.5% annualized decline registered in the first quarter.

Charts courtesy www.stockcharts.com

PICTURED: The Bank Index ($BKX +3.41%) posted a 7th consecutive gain and rallied above its recent highs and its 200-day moving average (DMA) line, heading toward its May high.  A bullish crossover of its 50 & 200 DMA lines may be close at hand, and that would be a bullish indication.

Green Mountain Coffee Roasters (GMCR +$2.87 or +4.36% to $68.77) positively reversed today and rallied to new highs after initially gapping down following another strong financial report for the latest quarter ended June 30, 2009. It had held its ground stubbornly since July 20th, when its rally above its latest pivot point to a new all-time high with three times average volume triggered a technical buy signal. Using the "view all notes" link, one can see that from July 17-22 it was color coded yellow (Y- at the front of the notes) after the latest pivot point was identified. Its color code was changed to green after it rose more than +5% above its pivot point, indicating that it was getting extended from an ideal entry point within the investment system's guidelines.  Greater than usual volume and volatility are common around earnings news, and today's shakeout offered a brief window of opportunity to buy shares without chasing the stock.

If you have "force fed" your winners over time, accumulating at multiple buy points, always be disciplined about limiting losses by selling any higher priced shares you may have bought if the stock falls more than -7% from the price you paid for them. You might decide to hold shares owned at a lower cost basis, but be prompt to lock in profits whenever clear technical sell signals occur. Strong leaders tend to keep on leading, however any subsequent deterioration under prior highs in the $62-63 area would negate its latest breakout. Prior highs are initial chart support to watch above its 50-day moving average (DMA) line. Do not be confused by the 3:2 stock split effective 6/09/09. GMCR has traded as much as +176.28% since appearing with an annotated graph under the headline "It May Soon Be Time To Go Green" when featured in the January 2009 CANSLIM.net News (read here). 

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.