Thursday was a relatively quiet day on Wall Street, yet the major averages posted small gains as investors digested the large price swings from earlier in the week. Volume totals reported on the NYSE and Nasdaq exchange were lower than the prior session totals and below average.  Advancers led decliners by nearly a 2-to-1 ratio on the NYSE and by narrower 5-to-4 ratio on the Nasdaq exchange. There were 17 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, one more than the 16 issues that appeared on the prior session. On both exchanges new 52-week highs still significantly outnumbered 52-week lows, and new lows were in the single digits again.

The market traded back and forth between positive and negative territory for most of the session as stocks digested Tuesday's sharp moved down followed by Wednesday's sharp move higher. Retail giant, Wal-Mart Stores Inc. (WMT +2.71%) jumped above its downward sloping 200-day moving average (DMA) line after it reported a stronger-than-expected earnings report. This helped offset an unexpected slump in retail sales which serves as a strong proxy for the broader economy. On that note, retail sales slid -0.1% in July which was the first decline in three months and below the Street's estimates. 

Elsewhere on the economic front, initial jobless claims were also worse than economists expected which weighed on the notion that the US economic recovery is strong. The Labor Department said that the number of Americans filing initial claims for jobless benefits rose to 558,000. Since the recession officially began in December 2007 US employers slashed -6.7 million jobs in an attempt to cut costs and survive this economic contraction.

PICTURED: The weekly chart of the S&P 500 Index shows that volume has increased in recent weeks as the market advanced.

Charts courtesy www.stockcharts.com

PICTURED: The Internet Index ($IIX +0.50%) has been trading in a very tight range for the past few weeks and today it appears to have closed at a new 2009 high.  Yesterday's IGW section showed the Networking Index ($NWX +3.45%) hitting a new 2009 high (read here).  We will be keeping an eye out for new leadership.  For growth oriented investors, the tech sector's ongoing strength is very encouraging news.

Netease.com Inc (NTES -$4.81 or -10.31% to $41.84) gapped down today after reporting results for the quarter ended June 30, 2009 which showed a +50% earnings per share increase. The market's negative reaction was likely due to the fact that sales revenues were reported at -1% versus the year ago period, which was a continuation of its steady sequential deceleration in sales revenues increases from +79%, +59%, +42% in the Jun, Sep, Dec '08 comparisons and +24% in Mar '09. Gaps are often a dead giveaway that large institutional investors are rushing in one direction. In this case, the weak technical action may be considered an early sell signal while it is diving toward the nearest chart support at its pivot point, 50 DMA line, and prior chart highs, all of which come into play in the $39 area. 

It is an especially ominous sign, after a considerable run up, when a stock experiences its biggest point loss on the highest volume ever.  Today's action fits that description, which raises a big red flag!  The prior NTES appearance in this FSU section on 8/10/09 was framed up under the headline "Chinese Internet Content Firm Is Extended From Sound Base" and included the remark that, "Caution is advised because it is extended from its latest base" (read here).  Disciplined investors know to avoid chasing any stock and buying it more than +5% above its pivot point.  Those investors who were reckless and made sloppy buys should take note that, even after today's considerable loss, the stock still ended the day above the "max buy" level that was cited in prior reports.

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.