The major averages edged higher after a stronger than expected retail sales report and positive comments from Fed Chairman Ben Bernanke. Volume totals on the exchanges were reported heavier than Monday's session, which showed that institutional investors were accumulating stocks. Advancers led decliners by over a 2-to-1 ratio on the NYSE and by almost a 3-to-2 ratio on the Nasdaq exchange. There were 28 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 13 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 yet again.

Retail sales experienced their largest gain in three years and rose +2.7% in August. This blew away the July's reading of a -0.2% drop and the Street's forecast for a +1.9% rise. Excluding automobile sales, which were inflated due to the government's "Cash for Clunkers" program, retail sales rose +1.1%, which also topped forecasts. A separate report which measures manufacturing in the New York area was released and also topped estimates. These are the latest in a series of stronger than expected economic data which suggests the brunt of the recession has passed. Elsewhere, Ben Bernanke said it is "very likely" that the recession is over.

Stocks advanced for the seventh time in eight days on the flurry of stronger than expected economic data. Also billionaire investor Warren Buffett endorsed the notion of buying stocks when he announced that Berkshire Hathaway (BRKA +1.27%) is buying equities at these levels.  Mr. Buffett told a conference in California that Berkshire Hathaway is “buying stocks right as we speak” and he’s getting a “lot for my money” in equities.

Tuesday marked the one-year anniversary of Lehman Brothers Holdings Inc.’s bankruptcy filing accelerated the credit crunch, helped drag the global economy into its worst recession since World War II and sent the S&P 500 to a 12-year low in March 2009. Thankfully, the major averages have rallied sharply since then and the worst of the recession appears to be behind us, if not completely over. The market is a forward looking mechanism and the fact that it has rallied sharply off the March lows (and each pullback has been very mild) suggests brighter days lie ahead.

Charts courtesy www.stockcharts.com

PICTURED: The Gold & Silver Index ($XAU +2.43%) rallied for a new 2009 high close on Tuesday.

Salesforce.com, Inc.'s (CRM -$0.79 or -1.03% to $56.68) loss today on higher volume was a sign of distribution. Prior highs near $55 are an initial support level to watch on pullbacks, while it is now extended from a sound base. It recently rose from a "3-weeks tight" type pattern, and it stubbornly held its ground 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).

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.