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MARKET COMMENTARY - Thursday, September 18, 2014
The major averages finished higher on Wednesday. The Dow closed at fresh record high of 17,156 as it gained 24 points. The S&P 500 rose 2 points to 2,001. Volume totals were reported mixed, higher than the prior session total on the NYSE and lighter on the Nasdaq exchange. Breadth was slightly positive as advancers narrowly led decliners on the NYSE and by a 5-4 margin on the NASDAQ exchange. Leadership improved again as there were 41 high-ranked companies from the CANSLIM.net Leaders List that made new 52-week highs and appeared on the CANSLIM.net BreakOuts Page, up from the prior session total of 17 stocks. New 52-week highs totals also improved and outnumbered new lows on the Nasdaq exchange and on the NYSE. There were gains for 11 of the 13 high-ranked companies currently included on the Featured Stocks Page. The broader market (M criteria) overcame recent distributional pressure while leadership (stocks hitting new 52-week highs) remained healthy. Remember that disciplined investors buy stocks with superior fundamentals only after they have triggered a proper technical buy signal.
PICTURED: The Nasdaq Composite Index increased 9 points to 4,562. The tech-heavy index is consolidating above prior highs and above its 50-day moving average (DMA) line defining near-term support to watch.
Stocks rose for a second day as the FOMC statement revealed that the Fed retained its guidance that interest rates will remain low for a "considerable time" after its quantitative easing program ends in October. In addition, Chairwoman Janet Yellen reiterated during her press conference that any move in rates will be "data-dependent" and not based on a calendar projection.
On the economic front, a gauge of homebuilder confidence unexpectedly jumped to the best level since November 2005 while a separate report showed consumer prices fell last month for the first time since April 2013.
Overall, seven of the 10 S&P 500 sectors advanced. Materials and financials were the best performing groups. DuPont (DD +5%) jumped after an activist investor called for a break-up of the company. Bank of America (BAC +0.6%) rose. Industrials also helped lift the market. FedEx (FDX +3.3%) rose after reporting better-than-expected earnings results. Energy stocks retreated as WTI crude fell from a two-week high, and Schlumberger (SLB -1.6%) fell.
Treasuries declined following the FOMC statement. The 10-year note fell 5/32 to yield 2.61%.
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The Broker/Dealer Index ($XBD +0.93%) and the Bank Index ($BKX +0.65%) rose as financials underpinned the major averages rally on Wednesday. The Biotechnology Index ($BTK +0.38%) and the Semiconductor Index ($SOX +0.73%) tallied modest gains while the Networking Index ($NWX -0.12%) and the Retail Index ($RLX -0.09%) inched lower. Energy-related shares retreated as the Oil Services Index ($OSX -1.35%) outpaced the Integrated Oil Index ($XOI -0.32%) to the downside.
Charts courtesy www.stockcharts.com
PICTURED: The Gold & Silver Index ($XAU -2.13%) slumped further below its 200-day moving average (DMA) line with a large loss.