The major averages bounced back and snapped a four day losing streak which had briefly sent most of the popular averages below their respective 50-day moving average (DMA) lines. Volume was reported lower on the NYSE and Nasdaq exchange, indicating large institutional investors were not aggressively buying stocks while the indices posted gains. Advancers trumped decliners by over a 4-to-1 ratio on the NYSE and by over a 2-to-1 ratio on the Nasdaq exchange. There was only 1 high-ranked company from the CANSLIM.net Leaders List making a new 52-week high and appearing on the CANSLIM.net BreakOuts Page, higher than the 0 issues that appeared on the prior session. In terms of new leadership, the action was hardly anything to get excited over. New 52-week highs still outnumbered new 52-week lows on the NYSE, however new lows outnumbered new highs on Nasdaq exchange for a second consecutive day.

It was very encouraging to see the major averages quickly bounce back and defend their 50 DMA lines. However, volume, a critical component of institutional sponsorship, was lighter than Wednesday's heavy levels which was not ideal. This was the market's largest single-day advance since July and signaled Day 1 of a new rally attempt. This means that the earliest a possible follow-through day could emerge would be Tuesday, November 3, 2009 assuming the day's lows are not breached. That said, the market is still in a correction which means defense is the better part of valor.

The US dollar gapped down, which paved the way for the bulls to step in and clean up. A slew of large cap stocks and other recently beaten down names soared after the government reported GDP rose +3.5% last quarter which topped the Street's estimates. The median estimate was for a +3.2% rally according to the latest Bloomberg survey. The stronger than expected GDP reading helped allay concerns that the eight-month rally in equities was overdone and outpaced the prospects for a sustained economic recovery.

PICTURED: The S&P 500 Index bounced off support (50 DMA line and 8-month upward trendline) however volume was lighter than prior session.

Charts courtesy www.stockcharts.com

PICTURED: The Internet Index ($IIX +2.41%) rallied after its latest test of support at its 50-day moving average (DMA) line.

Green Mountain Coffee Roasters (GMCR +$1.30 or +1.90% to $68.48) halted its slide right at its 50-day moving average line with today's gain on lighter volume following two damaging losses on higher volume. It has negated its recent breakout from a cup-with-high-handle pattern and slumped below its July highs. Disciplined investors always limit losses at any time a stock falls more than 7-8% from their buy price. If any add-on purchases were made after GMCR's later stage breakouts, those positions might need to be sold, meanwhile, shares of the stock bought at earlier levels might still be justifiable to hold. Any deterioration under recent chart lows would raise concerns, and subsequent losses under its 50 DMA line would trigger technical sell signals as more worrisome signs of weakness.

Do not be confused by the 3-for-2 split that occurred in the interim, as GMCR has traded up as much as +204% since appearing with an annotated graph under the headline "It May Soon Be Time To Go Green" when featured in the January 2009 CANSLIM.net News (read here). 

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.