Stocks rallied around the world after shares in China posted gains considered by certain analysts as a "follow-through day" confirming their latest rally attempt. This may be very important, since China led the world markets higher in early March, and the immensely populous country continues to be a strong engine for economic growth. In the US, volume was higher than Friday's light pre-holiday levels which is a sign of accumulation for the major averages. Advancers trumped decliners by nearly a 3-to-1 ratio on the NYSE and by about a 3-to-2 ratio on the Nasdaq exchange. There were 22 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, up from the 11 issues that appeared on the prior session. New 52-week highs still outnumbered new 52-week lows on both exchanges while new lows were in the single digits again.

Stocks rallied as the US dollar dove to a new 2009 low against the euro and a slew of other world currencies. This sent the price of commodities higher, which helped gold rise above the psychologically important $1,000 per ounce level. The falling dollar sent a slew of other commodities higher on the news.  Goldman Sachs Group Inc. (GS +2.61%) raised its forecasts on the metals complex because of "increasing evidence of a stronger-than- anticipated recovery in global industrial activity." On Tuesday, Gold futures rose to the highest price since March 2008 (when Bear Stearns failed), before pulling back to close off the session highs. Bullion reached an intra-day record high of $1,033.90 approximately 18 months ago, in March 2008, and has been advancing for the past nine consecutive years.

Interestingly, in a somewhat negative divergence, a flurry of gold stocks negatively reversed (opened higher and closed lower) on the news. Many gold and silver related stocks blasted higher last Wednesday and Thursday, making a pullback expected. Watchful traders will be measuring the pullback to gauge whether it is a short-term pullback which will eventually lead to higher prices, or if there is a material pullback which effectively ends the recent run in gold shares. Remember that gold stocks broke out before gold broke out, so the fact that the stocks in the group are pulling back before gold pulls back bodes somewhat poorly for the the yellow metal. 

The International Monetary Fund’s Dominique Strauss-Kahn said the crisis phase that toppled Lehman Brothers Holdings Inc. in September 2008 is "almost certainly behind us" which was a strong vote of confidence in the current recovery.  Ministers from the Organization of Petroleum Exporting Countries (OPEC) are scheduled to meet tomorrow in Vienna to set production targets. Saudi Arabian Oil Minister Ali al-Naimi, who has been very vocal in recent months about his view on oil, said the market is in "good shape," with crude priced near $70 per barrel.

PICTURED: The Nasdaq Composite Index enjoyed a fresh high close for 2009!

Charts courtesy www.stockcharts.com

PICTURED: The Oil Services Index ($OSX +3.16%) was a standout gainer on Tuesday as traders returned from the long holiday weekend.  After an impressive rally from its December 2008 lows, the OSX has been consolidating. Gains above the downward trendline connecting its June -August chart highs, and clearing either chart high, would be a bullish indicators for the whole group of energy-related stocks.

Baidu.com, Inc. (BIDU +$13.88 or +3.89% to $357.15) gapped up today and was featured in yellow in the mid-day report with new pivot point and max buy levels cited (read here).  It is setting up on the right side of a near 6-week flat base while rising toward its 52 week high after its latest test of support at its 50-day moving average (DMA) line.  That important short-term average line acted as firm support in July. The latest consolidation is shorter than the minimum 8-week length of a proper "double bottom" pattern. This high-ranked leader has a solid quarterly and annual earnings history, but its clear sequential deceleration in its increases is a concern which has been cited in recent reports. It could deserve the benefit of the doubt is a fresh technical buy signal is triggered.  Remember that the investment system's guidelines require for a proper technical breakout to rise above its pivot point with heavy volume that is a minimum of +50% above average, preferably much more. 

Based on weak technical action it was dropped from the Featured Stocks list on 1/11/08, when it was trading at $329, and it has rebounded very impressively from its January 2009 lows near $100.  An annotated graph showed a vivid picture of the stock's weakness then under the headline, "Weakness Hurting Chances For Featured Favorite" (read here). Take a look back at that now!  BIDU had rallied +356% since it first featured on Monday, October 30, 2006 in the CANSLIM.net Mid Day Breakouts Report (read here) with a $94.05 pivot point. Along the way it went through a multi-month consolidation under its 50 and 20 DMA lines, then later returned as a noteworthy leader featured in CANSLIM.net reports." Remember that a dropped stock can be featured again in a future CANSLIM.net report if it repairs its technical damage and forms a new pivot point.  After its initial appearance, in fact, BIDU was featured again in yellow at $225.58 in the 09/11/07 CANSLIM.net Mid-Day BreakOuts Report as it was hitting new highs from an 8-week base period (read here).  It may have looked "expensive" then, yet it subsequently zoomed to $429 by November of that year before beginning a very deep consolidation (coupled with a Bear Market). 

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.