Stocks across the globe were led lower by a decline in China which sent the Shanghai Composite back into a bear market (defined by a decline of at least -20% from a recent high). Decliners trumped advancers by a nearly 3-to-1 ratio on the NYSE and on the Nasdaq exchange. Volume totals were reported higher on the NYSE and very near the prior session total on the Nasdaq exchange. There were only 8 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 22 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.

Overnight, the Shanghai Composite Index tumbled -6.7%, which was the largest single-day decline since June 2008. The loss officially sent that index back into a bear market. Over the weekend, Japan's Democratic Party won a major election which marked an end to the single-party government that lasted almost unbroken for half a century. The reason why it is important to pay attention to Asia is because Asian markets were one of the first indexes to rally earlier this year. Therefore, the fact that they are breaking down, coupled with the recent "stalling" action in the US, does not bode well for the bulls.

Since the March lows, the S&P 500 Index has advanced each month, which is the longest stretch of monthly gains since January 2007. The six month rally sent the benchmark S&P 500 soaring over +50% which is one of the strongest 6 month rallies in history. History shows us that the strongest moves (both up and down) occur during bear markets which makes it very interesting to see how the major averages perform over the next few months. History also shows us that both September and October can often be lousy months for the market. Only time will tell how the markets perform in the month ahead. As always, remain alert and only commit your capital to the best names breaking out of sound price bases. Otherwise, cash is safe place to be. For more information about the market be sure to check out September 2009 edition of CANSLIM.net News which will be published tonight!

PICTURED: The Dow Jones Industrial Average closed in the upper half of its daily range after finding support near its prior chart highs.

Charts courtesy www.stockcharts.com

PICTURED: The Retail Index ($RLX -1.57%) is consolidating above prior chart highs and its 50-day moving average (DMA) line.

Salesforce.com, Inc. (CRM -$0.38 or -0.73% to $51.84) has been stubbornly holding its ground while consolidating in a very tight range since its "breakaway gap" for a considerable gain on 8/21/09 with more than 5 times average volume. The stock's exceptional action was discussed further in the "Ken's Mailbag" Q&A with a member in the 8/21/09 After Market Update (read here). A Stock Bulletin was published with detailed analysis and an annotated graph on 8/16/09 (read here). Stock Bulletins are not part of a routine daily or monthly report that we publish for CANSLIM.net's paying members, they are occasionally prepared as the market action dictates. The most action-worthy new ideas show up more often highlighted in yellow in the CANSLIM.net Mid-Day BreakOuts Report, or in the monthly issue of CANSLIM.net News. Market conditions in many recent months have been such that far fewer ideas than we would like have been worthy of the full blown coverage typically provided on stocks in the monthly newsletter, let alone special bulletins.  The last bulletin published prior to CRM was more than a year ago - 6/04/2008 Almost Family (AFAM).

CRM's breakaway gap was part of the important batch of new leadership helping the market snap out of a brief correction in mid-August and get back into a "confirmed rally", which is good news concerning the investment system's M criteria. As we have noted in the past, a "breakaway gap" is one valid exception to the rule which limits investors from buying stocks at more than 5% above their prior chart high or pivot point. We have in the past seen the newspaper and experts teaching the Certification suggest that in a very bullish market environment it is permissible to buy stocks as much as 10% above their prior highs when a stock stages a powerful breakaway gap. As it continues to consolidate, CRM may offer investors more ideal chances to accumulate shares on lighter volume pullbacks, or a base-on-base type pattern might form in future weeks.

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.