The major averages ended mixed and very little changed on Wednesday's session as investors digested a slew of important data: the Fed concluded its last meeting of the year, housing starts topped estimates and consumer prices matched forecasts. Volume, an important indicator of institutional sponsorship, was reported lighter than Tuesday's totals on the NYSE, yet the volume on the Nasdaq exchange was reported higher, which signaled that large institutions were more aggressively buying stocks. Advancers led decliners by about a 2-to-1 ratio on the NYSE and by nearly a 4-to-3 ratio on the Nasdaq exchange. There were 53 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, better than the total of 42 issues that appeared on the prior session. New 52-week highs substantially outnumbered new 52-week lows on the NYSE and on the Nasdaq exchange.

At 8:30AM EST, two important economic reports were released: the consumer price index (CPI) and housing starts. The Labor Department said consumer prices rose by +0.4% in November after gaining +0.3% in October. The headline number matched estimates which helped allay inflation woes. The core rate, which excludes food and energy, was unchanged last month and was below the Street's estimate for an increase of +0.1%. Elsewhere, the Commerce Department said housing starts, which are registered when construction begins on a new residential building, were in line with estimates and rose +8.9% to an annual rate of 574,000 units. Meanwhile, building permits, a sign of future construction, jumped to the highest level in a year which was an encouraging sign. The pre-market news left investors optimistic about the future because the data signaled that the economy was recovering while inflation remained somewhat contained.

At 2:15PM EST, the FOMC concluded its two-day meeting and decided to leave interest rates steady near historical lows of 0-.25%. Time Magazine named Fed Chairman, Ben Bernanke as person of the year thanks to his ability to save the country's financial system from the worst recession since the WWII. Many economists believe that the US economy will grow over +4% in the fourth quarter of 2009 which will be the fastest pace in almost four years. However, stocks sold off after the Fed's announcement because many investors believe that keeping rates this low will cause rampant inflation down the road.

On Wednesday, the major averages closed just below important resistance levels as leading stocks were mixed. The Dow Jones Industrial Average and benchmark S&P 500 Index closed below 10,500 and 1,115, their respective resistance levels. The Nasdaq Composite Index closed just above 2,200 which has served as an important level of resistance for the tech-heavy index in recent months. At this point, the action remains healthy as long as the major averages remain above their respective 50-day moving average lines. So far, the market has held up rather nicely to the slew of economic data that was released this week, which is a bullish sign. As long as this action continues, the major averages deserve the bullish benefit of the doubt.

PICTURED: The S&P 500 Index is hovering near a recent resistance level.

Weakness in the Biotechnology Index ($BTK -0.86%), Retail Index ($RLX -0.37%), and Bank Index ($BKX -0.42%) created a drag that largely offset gains elsewhere on Wednesday.  Defensive areas fared well as the Healthcare Index ($HMO +1.95%) was among the session's standout gainers, meanwhile commodity-linked groups including the Gold & Silver Index ($XAU +1.34%), Oil Services Index ($OSX +1.41%), Integrated Oil Index ($XOI +0.74%) posted gains.  The Semiconductor Index ($SOX +1.74%) led the tech sector while the Internet Index ($IIX +0.44%) and Networking Index ($NWX +0.77%) posed smaller gains.

Charts courtesy www.stockcharts.com

PICTURED: The Broker/Dealer Index ($XBD +1.96%) halted its slide just above recent low closes. It remains below its 50-day moving average (DMA) line which is now downward sloping.

ArcSight, Inc. (ARST +$0.62 or -2.08% to $24.96) posted a 5th consecutive gain today on near average volume which helped it close above its 50-day moving average (DMA) line and helped it outlook. However, its current consolidation is not considered a new sound base. Patience may allow for it to form a new cup-with-handle or other bullish base pattern in due time.  Meanwhile, deterioration below its recent chart lows ($22.15) would raise more serious concerns and trigger technical sell signals.  Concerns were raised when it recently traded below its 50-day moving average (DMA) line. The 50 DMA line is always an important technical support level to watch on pullbacks. In this case, concerns were also raised when it undercut a prior chart low ($23.01), the next technical support. 

It has shown resilience again this week after recently noted technical sell signals. However, keep in mind that ARST was considered a "late-stage" breakout possibility when featured after it had already made a considerable 5-fold rally from its November '08 low. ARST was first featured in yellow at $19.91 in the 9/01/09 mid-day report with an annotated daily graph (read here) and it was also featured with more detailed analysis in the September 2009 CANSLIM.net News with an annotated weekly graph (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.