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AFTER MARKET UPDATE - WEDNESDAY, NOVEMBER 7TH, 2012
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Indices NYSE Nasdaq
DOW  -312.95 12,932.73 -2.36% Volume 878,090,380 +30% Volume 1,996,449,330 +15%
NASDAQ -74.64 2,937.29 -2.48% Advancers 557 17% Advancers 377 15%
S&P 500 -33.86 1,394.53 -2.37% Decliners 2,550 80% Decliners 2,120 83%
Russell 2000 -21.29 804.52 -2.58% 52 Wk Highs 76   52 Wk Highs 26  
S&P 600 -3.94 457.34 -0.85% 52 Wk Lows 77   52 Wk Lows 97  

Major Averages Undercut Recent Lows Continuing Correction

The major averages violated their recent lows with large losses on Wednesday which ended their nascent rally attempts. The Dow Jones Industrial Average and the  Nasdaq Composite Index violated their respective 200-day moving average (DMA) lines as the previously noted market correction worsened.  The volume totals were reported higher on the NYSE and on the Nasdaq exchange versus the prior session's totals, proof that institutional selling pressure was on the rise behind the market's damaging losses. Breadth was very negative as decliners led advancers by more than a 4-1 margin on the NYSE and by more than 5-1 on the Nasdaq exchange. The total number of stocks hitting new 52-week lows outnumbered new 52-week highs on the NYSE and on the Nasdaq exchange. There were 16 high-ranked companies from the CANSLIM.net Leaders List making new 52-week highs and appearing on the CANSLIM.net BreakOuts Page, down abruptly from the prior session total of 48 stocks. There were gains for only 2 of the 17 high-ranked companies currently included on the Featured Stocks Page.

 

The results of the U.S. Presidential election now known, major averages extended their declines and the previously noted market correction turned uglier. Investor focus shifted to the upcoming fiscal cliff of tax increases and spending cuts that go into effect in 2013 unless Congress reaches a compromise on the budget. Renewed concerns surrounding Europe also weighed on the market after cautious comments by ECB President Mario Draghi on the region's economy. The reduced growth outlook by the European Commission for the euro-area hurt the market's sentiment.

Financials were the worst performing group. Morgan Stanley (MS -8.41%) and Bank of America Corp (BAC -6.99%) fell. Energy stocks also dragged the market lower. Shares of Exxon Mobil Corp (XOM -3.08%) were down as crude oil declined more than -4.0%. Over in tech, Apple Inc (AAPL -3.75%) fell, putting the stock -20.0% below its mid-September record high. Time Warner (TWC -0.98%) edged lower even after the media company posted better-than-expected quarterly results. Tenet Healthcare Corp (THC +9.58%) was a notable gainer as shares of the hospital operator rallied after reporting better-than-expected quarterly results.

During market corrections the M criteria argues against new buying efforts and urges investors to take a defensive stance to protect precious capital. That stance can change back to a bullish stance where buying is encouraged when at least one of the three major averages produces a solid follow-through day (FTD).  A FTD confirming a new rally requires substantial gains on higher (ideally above average) volume, coupled with healthy leadership and a respectable number of stocks hitting new 52-week highs. Historic studies have shown that a FTD occurring between Days 4-7 of a new rally effort has often signaled the beginning of the most substantial market rallies.

Investors should always limit losses if ever any stock falls more than -7% from their purchase price. Following strict sell rules is precisely how this fact-based investment system prompts investors to reduce exposure and protect cash during market downturns. Keep a watchlist of strong acting stocks with all-key criteria in anticipation of the next confirmed uptrend.  See the noteworthy candidates included on the Featured Stocks Page.

Watch for an announcement via email concerning the next WEBCAST. The webcast will also be available via an updated link highlighted at the top of the Premium Member Homepage

PICTURED 1: The Dow Jones Industrial Average violated its 200-day moving average (DMA) line raising more serious concerns. In this commentary we will continue to watch closely for confirming gains within the ideal window for a proper FTD, meanwhile caution and patience are required.

PICTURED 2: The Nasdaq Composite Index violated its 200-day moving average (DMA) line raising more serious concerns.


Kenneth J. Gruneisen started out as a licensed stockbroker in August 1987, a couple of months prior to the historic stock market crash that took the Dow Jones Industrial Average down -22.6% in a single day. He has published daily fact-based fundamental and technical analysis on high-ranked stocks online for two decades. Through FACTBASEDINVESTING.COM, Kenneth provides educational articles, news, market commentary, and other information regarding proven investment systems that work in good times and bad.

Comments contained in the body of this report are technical opinions only and are not necessarily those of Gruneisen Growth Corp. The material herein has been obtained from sources believed to be reliable and accurate, however, its accuracy and completeness cannot be guaranteed. Our firm, employees, and customers may effect transactions, including transactions contrary to any recommendation herein, or have positions in the securities mentioned herein or options with respect thereto. Any recommendation contained in this report may not be suitable for all investors and it is not to be deemed an offer or solicitation on our part with respect to the purchase or sale of any securities.


Financial Groups' Losses Led Major Averages Lower

Weakness in influential financial shares pressured the Bank Index ($BKX -4.56%) and Broker/Dealer Index ($XBD -4.26%), a worrisome sign for the broader market.  Energy-related shares fell hard and the Oil Services Index ($OSX -2.82%)   and the Integrated Oil Index ($XOI -2.79%) tumbled. The tech sector saw unanimous losses from the Semiconductor Index ($SOX -2.70%), Biotechnology Index ($BTK -2.25%), Internet Index ($IIX -1.80%), and the Networking Index ($NWX -0.60%).  The Healthcare Index ($HMO -0.35%) edged lower, meanwhile the Gold & Silver Index ($XAU +0.86%) and the Retail Index ($RLX +1.07%) were standout gainers.

Charts courtesy www.stockcharts.com

PICTURED: The Bank Index ($BKX -4.56%) violated its 50-day moving average (DMA) line.


Industry Index Symbol Close Change % Change YTD % Change
Oil Services $OSX  214.58 -6.22 -2.82% -0.79%
Healthcare $HMO  2,517.33 -8.86 -0.35% +10.33%
Integrated Oil $XOI  1,219.84 -35.05 -2.79% -0.75%
Semiconductor $SOX  373.27 -10.35 -2.70% +2.42%
Networking $NWX  199.85 -1.20 -0.60% -7.12%
Internet $IIX  306.44 -5.61 -1.80% +8.77%
Broker/Dealer $XBD  83.65 -3.72 -4.26% +0.46%
Retail $RLX  656.79 +6.93 +1.07% +25.53%
Gold & Silver $XAU  182.39 +1.56 +0.86% +0.97%
Bank $BKX  48.39 -2.31 -4.56% +22.88%
Biotech $BTK  1,431.45 -32.88 -2.25% +31.15%


Weak Action Negated Prior Breakout and Violated 50-Day Average

Bio-Reference Laboratories, Inc. (BRLI -$1.14 or -3.91% to $28.00) retreated today from its 50-day moving average (DMA) line which may now act as a resistance level after damaging distributional action in recent weeks. Its Accumulation/Distribution Rating has fallen to a D (see red circle) from a B+ when last shown in this FSU section on 10/08/12 with an annotated daily graph under the headline, "Prior Highs Define Initial Support Level Following Breakout". It had triggered a technical buy signal as it tallied a considerable volume-driven gain above its pivot point cited in the 10/03/12 mid-day report (read here), but recent volume-driven losses soon negated the breakout as it slumped back below prior resistance in the $30 area defining initial support to watch. It also violated its 50-day moving average (DMA) line. In addition to those signs of technical deterioration being noted as raising concerns, disciplined investors know to always limit losses if ever any stock falls more than -7% from their purchase price.

Recent bullish action and strong fundamentals helped it return to the Featured Stocks list, however it will be dropped from that list of noteworthy leaders tonight due to its technical deterioration.  The company has maintained a good annual earnings history (A criteria) and quarterly earnings increases were above the +25% minimum guideline (C criteria) in the 3 latest comparisons through Jul '12 while prior comparisons were borderline or below the guideline. BRLI now has 27.7 million shares outstanding (S criteria). The number of top-rated funds owning its shares rose from 214 in Dec '11 to 261 in Sep '12 which is reassuring in regard to the I criteria of the investment system.


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.

***Last / Change / Volume data in this table is the closing quote data***
Symbol/Exchange
Company Name
Industry Group
PRICE CHANGE
(%Change)
Day High Volume
(% DAV)
(% 50 day avg vol)
52 Wk Hi
% From Hi
Featured
Date
Price
Featured
Pivot Featured
Max Buy
ASPS - NASDAQ
Altisource Ptf Sltns Sa
REAL ESTATE - Property Management/Developmen  
$111.94 +5.34
5.01%

$114.43

295,346
138.27% of 50 DAV
50 DAV is 213,600
$129.72
-13.71%
9/24/2012 $87.24 PP = $92.39
MB = $97.01
Most Recent Note - 11/7/2012 1:23:24 PM
G - Rallying today with higher volume following a spurt of losses with above average volume. Important support to watch is at its 50 DMA line.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/12/2012. Click here.

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BRLI - NASDAQ
Bio Reference Labs Inc
HEALTH SERVICES - Medical Laboratories and Researc  
$28.00 -1.14
-3.91%

$29.03

300,135
88.25% of 50 DAV
50 DAV is 340,100
$32.86
-14.79%
10/3/2012 $30.90 PP = $30.25
MB = $31.76
Most Recent Note - 11/7/2012 4:53:48 PM
Retreated from its 50 DMA line today which may now act as a resistance level after damaging distributional action in recent weeks. Based on weakness it will be dropped from the Featured Stocks list tonight. See the latest FSU analysis for more details and a new annotated graph.
>>> The latest Featured Stock Update with an annotated graph appeared on 11/7/2012. Click here.

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CFNL - NASDAQ
Cardinal Financial Corp
BANKING - Regional - Southeast Banks  
$15.80 -0.31
-1.92%

$16.05

312,834
260.48% of 50 DAV
50 DAV is 120,100
$16.21
-2.53%
8/17/2012 $12.84 PP = $13.31
MB = $13.98
Most Recent Note - 11/7/2012 12:01:58 PM
G - Perched near its 52-week high today, holding its ground stubbornly after getting extended from its prior base. Prior high ($14.79 on 9/24/12) defines initial support to watch above its 50 DMA line on pullbacks.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/25/2012. Click here.

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CMCSA - NASDAQ
Comcast Corp Cl A
MEDIA - CATV Systems  
$36.58 -0.59
-1.59%

$36.93

17,394,201
139.49% of 50 DAV
50 DAV is 12,469,600
$37.96
-3.64%
6/11/2012 $29.94 PP = $30.98
MB = $32.53
Most Recent Note - 11/7/2012 3:57:39 PM
G - Pulling back from its 52-week high today for a 3rd consecutive small loss with slightly above average volume. Reported earnings +39% on +15% sales revenues for the Sep '12 quarter, a reassuring follow-up to the previously noted sub par quarter. Upward trendline and 50 DMA line define near term support where violations would trigger technical sell signals.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/24/2012. Click here.

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DVA - NYSE
Davita Healthcare Prtns
HEALTH SERVICES - Specialized Health Services  
$112.82 -2.16
-1.88%

$114.99

1,149,493
139.81% of 50 DAV
50 DAV is 822,200
$116.50
-3.16%
9/5/2012 $102.92 PP = $100.62
MB = $105.65
Most Recent Note - 11/6/2012 1:03:29 PM
G - Hitting another new 52-week high today with volume running at an above average pace while getting more extended from its latest sound base. Prior highs near $100 and its 50 DMA line define near-term support to watch on pullbacks where violations may trigger technical sell signals. Fundamental concerns were raised after it reported earnings +3% on +12% sales for the Sep '12 quarter, below the guidelines of the fact-based system.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/10/2012. Click here.

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Symbol/Exchange
Company Name
Industry Group
PRICE CHANGE
(%Change)
Day High Volume
(% DAV)
(% 50 day avg vol)
52 Wk Hi
% From Hi
Featured
Date
Price
Featured
Pivot Featured
Max Buy
GPX - NYSE
G P Strategies Corp
DIVERSIFIED SERVICES - Education and Training Services  
$20.47 -0.36
-1.73%

$20.64

40,102
68.67% of 50 DAV
50 DAV is 58,400
$20.93
-2.20%
10/8/2012 $20.00 PP = $20.77
MB = $21.81
Most Recent Note - 11/6/2012 4:19:43 PM
G - Today's 4th consecutive gain with above average volume helped it hit a new 52-week high. Recently reported earnings +0% on +12% sales revenues for the Sep '12 quarter, below the +25% minimum earnings guideline, raising fundamental concerns.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/16/2012. Click here.

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LKQ - NASDAQ
L K Q Corp
WHOLESALE - Auto Parts  
$21.46 -0.36
-1.65%

$21.69

1,437,554
90.88% of 50 DAV
50 DAV is 1,581,900
$21.95
-2.23%
8/9/2012 $18.97 PP = $18.72
MB = $19.66
Most Recent Note - 11/6/2012 4:21:45 PM
G - Rallied with near average volume today for best-ever close. No resistance remains due to overhead supply. Showed impressive resilience and strength after reporting earnings +6% on +30% sales revenues for the Sep '12 quarter. Results below the +25% minimum earnings guideline (C criteria) raised fundamental concerns.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/19/2012. Click here.

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MIDD - NASDAQ
Middleby Corp
MANUFACTURING - Diversified Machinery  
$124.65 +4.25
3.53%

$126.50

161,203
202.52% of 50 DAV
50 DAV is 79,600
$127.89
-2.53%
10/8/2012 $118.46 PP = $122.67
MB = $128.80
Most Recent Note - 11/7/2012 4:01:04 PM
Y - Rallied near its 52-week high with above average volume behind today's 2nd consecutive gain, rising back above its pivot point after finding prompt support at its 50 DMA line. Reported earnings +23% on +18% sales for the Sep '12 quarter, below the +25% minimum earnings guideline (C criteria). The M criteria remains an overriding concern until a FTD confirms a new rally.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/22/2012. Click here.

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N - NYSE
Netsuite Inc
DIVERSIFIED SERVICES - Business/Management Services  
$61.34 -1.55
-2.46%

$62.51

246,901
47.63% of 50 DAV
50 DAV is 518,400
$67.02
-8.48%
8/20/2012 $55.88 PP = $59.32
MB = $62.29
Most Recent Note - 11/6/2012 1:04:46 PM
G - Reported earnings +60% on +31% sales revenues for the Sep '12 quarter. Consolidating since a considerable 10/26/12 gap up and volume-driven gain from below its 50 DMA line for new 52-week and all-time highs. It did not form a sound new base pattern. Until the major averages are back in a confirmed rally the M criteria argues against any new buying efforts.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/26/2012. Click here.

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OSIS - NASDAQ
O S I Systems Inc
ELECTRONICS - Semiconductor Equipment and Mate  
$78.56 -1.94
-2.41%

$79.46

83,351
73.44% of 50 DAV
50 DAV is 113,500
$81.23
-3.29%
9/5/2012 $74.39 PP = $75.10
MB = $78.86
Most Recent Note - 11/7/2012 1:21:13 PM
G - Pulling back from its 52-week high today with a loss on light volume. Recently found prompt support at its 50 DMA line, and it is still slightly extended from its prior base.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/18/2012. Click here.

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Symbol/Exchange
Company Name
Industry Group
PRICE CHANGE
(%Change)
Day High Volume
(% DAV)
(% 50 day avg vol)
52 Wk Hi
% From Hi
Featured
Date
Price
Featured
Pivot Featured
Max Buy
RAX - NYSE
Rackspace Hosting Inc
INTERNET - Internet Software and; Services  
$62.95 -3.13
-4.74%

$65.63

4,172,714
251.29% of 50 DAV
50 DAV is 1,660,500
$69.81
-9.83%
11/6/2012 $65.44 PP = $69.91
MB = $73.41
Most Recent Note - 11/7/2012 1:16:41 PM
G - Color code is changed to green while slumping well below its 50 DMA line with a damaging volume-driven loss today raising concerns. Fundamentals (C and A criteria) remain strong. See the latest FSU analysis for more details and a new annotated graph. A recent streak of 10 consecutive weekly gains helped it rebound impressively from below its 200 DMA line following a deep consolidation since dropped from the Featured Stocks list on 5/14/12.
>>> The latest Featured Stock Update with an annotated graph appeared on 11/6/2012. Click here.

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RNF - NYSE
Rentech Nitrogen Ptnr Lp
CHEMICALS - Agricultural Chemicals  
$38.15 -1.00
-2.55%

$38.95

316,413
82.90% of 50 DAV
50 DAV is 381,700
$41.15
-7.29%
11/1/2012 $39.11 PP = $40.15
MB = $42.16
Most Recent Note - 11/7/2012 3:45:24 PM
Y - Pulling back today with higher volume, enduring distributional pressure amid a negative market (M criteria). After hitting a new 52-week high on 11/02/12 a "negative reversal" for a loss with above average volume broke a streak of 5 consecutive gains.
>>> The latest Featured Stock Update with an annotated graph appeared on 11/2/2012. Click here.

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TDG - NYSE
Transdigm Group Inc
AEROSPACE/DEFENSE - Aerospace/Defense Products and; Services  
$138.00 -2.12
-1.51%

$139.17

311,001
61.50% of 50 DAV
50 DAV is 505,700
$140.49
-1.77%
8/16/2012 $132.23 PP = $136.44
MB = $143.26
Most Recent Note - 11/6/2012 4:28:00 PM
G - Hit a new high (following a 10/23/12 special dividend) with today's gain on light volume. When noted on 10/23/12 it undercut its 50 DMA line, yet it promptly rebounded back above that important short-term average.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/23/2012. Click here.

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ULTA - NASDAQ
Ulta Salon Cosm & Frag
SPECIALTY RETAIL - Specialty Retail, Other  
$93.05 -1.01
-1.07%

$94.42

459,068
63.74% of 50 DAV
50 DAV is 720,200
$103.52
-10.11%
9/4/2012 $93.17 PP = $98.52
MB = $103.45
Most Recent Note - 11/5/2012 4:55:59 PM
G - Its 200 DMA line defines near-term support to watch while its waning Relative Strength Rating has raised concerns. See the latest FSU analysis for more details and a new annotated graph.
>>> The latest Featured Stock Update with an annotated graph appeared on 11/5/2012. Click here.

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ULTI - NASDAQ
Ultimate Software Group
INTERNET - Internet Software and Services  
$91.96 -2.54
-2.69%

$93.53

195,514
122.43% of 50 DAV
50 DAV is 159,700
$106.40
-13.57%
10/31/2012 $101.36 PP = $105.00
MB = $110.25
Most Recent Note - 11/7/2012 3:50:20 PM
Gapped down today, slumping further below its 50 DMA line and undercutting prior lows raising more serious concerns. Reported earnings +61% on +22% sales revenues for the Sep '12 quarter. A rebound above its 50 DMA is needed to improve its technical stance. Based on weakness it will be dropped from the Featured Stocks list tonight.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/31/2012. Click here.

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Symbol/Exchange
Company Name
Industry Group
PRICE CHANGE
(%Change)
Day High Volume
(% DAV)
(% 50 day avg vol)
52 Wk Hi
% From Hi
Featured
Date
Price
Featured
Pivot Featured
Max Buy
VSI - NYSE
Vitamin Shoppe Inc
SPECIALTY RETAIL - Specialty Retail, Other  
$60.11 -1.56
-2.53%

$60.88

485,963
172.94% of 50 DAV
50 DAV is 281,000
$61.89
-2.88%
10/15/2012 $57.82 PP = $60.08
MB = $63.08
Most Recent Note - 11/7/2012 1:19:53 PM
Y - Gapped down today. A considerable gap up and volume-driven gain on the prior session helped it rally back above its 50 DMA line after it released better than expected earnings +35% on +14% sales revenues for the Sep '12 quarter. Keep in mind the M criteria which argues against new buying efforts until the market is back in a confirmed rally.
>>> The latest Featured Stock Update with an annotated graph appeared on 10/15/2012. Click here.

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WPI - NYSE
Watson Pharmaceuticals
DRUGS - Drugs - Generic  
$86.99 -0.45
-0.51%

$89.07

748,689
80.93% of 50 DAV
50 DAV is 925,100
$90.00
-3.34%
8/24/2012 $82.90 PP = $81.10
MB = $85.16
Most Recent Note - 11/7/2012 3:55:28 PM
G - Consolidating just -2.9% off its 52-week high today after recently finding support at its 50 DMA line. Reported earnings +24% on +19% sales revenues for the Sep '12 quarter, a notch below the +25% minimum guideline (C criteria). It has not formed a sound base and it is extended from a proper buy point under the fact-based system's guidelines.
>>> The latest Featured Stock Update with an annotated graph appeared on 11/1/2012. Click here.

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Kenneth J. Gruneisen founded Gruneisen Growth Corp. (2003), which prior to May 11, 2015, operated CANSLIM.net and CANSLIM.com both under license from Data Analysis Inc. / Investor's Business Daily. Kenneth has passed the CAN SLIM® Master's Exam. Gruneisen Growth Corp. now continues over two decades of fact based market analysis via FactBasedInvesting.com.

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