MORNING MARKET COMMENTARY   - Thursday, March 11, 2010
Advancers Outnumber Decliners Solidly As Tech Sector Provides Leadership
Adam Sarhan, Contributing Writer, www.CANSLIM.net

The major averages ended higher on the tenth anniversary of 2000's dot-com bubble. Volume totals were reported mixed and very near the prior session totals; slightly lighter on the Nasdaq exchange and slightly higher on the NYSE. Advancers led decliners by a 2-to-1 ratio on the NYSE and by nearly a 2-to-1 margin on the Nasdaq exchange. There were 50 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, down from the 62 issues that appeared on the prior session. New 52-week highs again overwhelmingly trumped new lows on both exchanges.

Ten years ago, the Nasdaq Composite Index hit a record high of 5,132.50 points which marked the top of the dot-com bubble. By October 2002, the index had plunged a whopping -78.41% before hitting a bottom and turning higher. The Nasdaq closed at 2,358.95 today which means that it is still down -54% from its record high. This illustrates how difficult the 00's were for US equities and reinforces the importance of following a proven investment system which works in both bull and bear markets to help investors achieve "above average" returns.

Stocks closed with modest gains on Wednesday after the government said the US budget deficit widened to a record last month. Government spending was the primary culprit as the government continues to try and revive the economy. Since last the March 1, follow-through-day (FTD) the market and a batch of leading stocks steadily rallied. The fact that we have not seen any serious distribution days since the FTD bodes well for this nascent rally. It is also a welcome sign to see the market continue to improve as investors digest the latest round of stronger than expected economic and earnings data.

Remember that now that a new rally has been confirmed, the window is open to start buying high quality breakouts. Trade accordingly.

PICTURED: The NYSE Composite Index is only -2% off its recovery high after a streak of 9 consecutive gains.

The tech sector's gains helped the tech-heavy Nasdaq Composite Index lead its peers as the Networking Index ($NWX +1.04%), Internet Index ($IIX +1.11%), Semiconductor Index ($SOX +2.16%) set a positive tone while the Biotechnology Index ($BTK +5.46%) was a standout gainer.  A solid gain from the Bank Index ($BKX +2.16%) and modest gains from the Broker/Dealer Index ($XBD +0.30%) and Retail Index ($RLX +0.45%) were also among the session's positive influences. The Healthcare Index ($HMO +0.53%) rose and energy-related shares' gains boosted the Oil Services Index ($OSX +0.66%) and Integrated Oil Index ($XOI +0.88%) slightly higher, meanwhile the Gold & Silver Index ($XAU -1.42%) was standout laggard.

Charts courtesy www.stockcharts.com

PICTURED: The Biotechnology Index ($BTK +5.46%) has rallied +50% from its November 2009 low.

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