The major averages ended modestly higher and continued the week's trading in an unusually tight range.  Decliners led advancers narrowly on the NYSE, yet advancers narrowly outnumbered decliners on the Nasdaq exchange. Volume totals were reported mixed, lower on the NYSE and higher on the Nasdaq versus the prior session. There were 23 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 31 issues that appeared on the prior session. New 52-week highs solidly outnumbered new 52-week lows on both exchanges while new lows were in the single digits again.

Before Wednesday's opening bell the government reported that durable goods rose +4.9% last month but the core component which strips out the highly volatile non-defense component (mainly transportation), slid -0.3%. The smaller than expected rise in core orders left many investors questioning the underlying health of the economy. Even a stronger than expected housing report failed to offset this concern. The Commerce Department said that new home sales jumped +9.6% in July which was the largest gain in four years to an annual rate of +433,000. The stronger than expected housing report reinforces our notion that the bear market in housing is over. This conclusion is made by studying the price/volume action in the housing stocks. Even though technically there action might be impressive one would need to see their fundamentals improve markedly before these stocks meet the guidelines of this powerful investment system.

Leadership is an important component of any healthy and sustained rally, and at this point the list of leading high-ranked stocks is narrow, but they are holding up well. Stocks such as Aeropostale Inc. (ARO -1.44%) triggered a fresh technical buy signal late last week and appeared in yellow in the CANSLIM.net Mid Day Breakouts Report on Friday August 21, 2009 (here) with the following note: "Y - This high-ranked leader in the Retail - Clothing/shoe group gapped up and hit a new all-time high today, rising from a flat base pattern. It has a good annual earnings history (the A criteria), and the 2 latest quarterly comparisons showed +81% and +84% earnings increases, well above the investment system's +25% guideline." At the time the stock was trading between its $38.84 pivot point and $40.78 max buy price, which is the ideal time to accumulate a position under the guidelines of the investment system. Other leading stocks are acting well as they quietly pause to consolidate their recent moves above their respective moving averages or near prior chart highs. Remember there is no reason to force a trade, instead remain patient and wait for an expansion in leadership before accumulating any new positions or adding to current winners.

Charts courtesy www.stockcharts.com

PICTURED: The Broker/Dealer Index is consolidating just shy of its 2009 highs.

Green Mountain Coffee Roasters (GMCR -1.09 or -1.84% to $59.40) has been cooling off, and its outlook is increasingly questionable the longer it stays trading under its 50-day moving average (DMA) line which is now downward sloping and a source of near-term technical resistance. The next support is at prior chart lows in the $54-53 area, where violations would trigger additional sell signals and raise more serious concerns. As previously noted, "its gap down and considerable loss on 8/17/09 on heavy volume triggered technical sell signals." Sell signals were noted since the stock's last appearance in this section under the headline "Increase In Share Supply May Be A Hindrance" on 8/14/2009 when it was observed that, "Strong leaders tend to keep on leading, however those who are watching for early sell signals should look out for a violation of the multi-month upward trendline, any subsequent deterioration under prior highs in the $62-63 area, or a violation of its 50-day moving average (DMA) line (now $61.68). 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."

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.