Two weeks of solid advances for the indexes from key technical levels has been backed up with a Follow Through Day of institutional buying, giving us reason to believe recent lows may stick. For this trend to continue, we also want to see sell-volume drop off to show less aggression from bears.

The fate of our Buyer’s Caution bias will ultimately be decided by the way the semiconductors (SMH), retail (XRT) and finance (XLF) sectors trend. The trio makes for key components of sustainable rallies. While the leading SMH sector gives encouragement as it trades above its 50-day moving average, the XRT gives us pause with a slightly negative week, down .5%, and the XLF remains a relative strength loser under its 200-day moving average.

A watchful eye on Europe should also be held, as the EUR/USD has served as a leading indicator for stocks over recent weeks. Sideways action in the currency over the last couple of days has been similar to what the broad market for U.S. stocks has done.

The market’s ability to rally on negative news tells a lot about its strength.

A return in Leadership is also encouraging as Apple Inc. (AAPL), up 8% for the week to an all-time high, is paving the way for others.

Stocks with top fundamentals listed as breakout candidates on our report have also been on fire:

Mercadolibre (MELI), a second tier Matrix stock of ours, has clocked new highs for the last two weeks when it broke out of its two-year long technical base.

Lulumon Athletica (LULU), a first tier Matrix selection, broke out of a two-and-a-half-year base.

Akamai Technologies (AKAM), has been on for new highs for three weeks since breaking lose from its year-and-a-half long base. The company doesn’t have strong enough fundamentals to qualify for our Matrix, though has been listed in this report for weeks as an ‘A’ grade stock.

Chipotle Mexican Grill (CMG), also hit a new high this week. As an ‘A’ grade stock it’s held a volatile, upward trend toward its recent all-time high.

Deckers Outdoor (DECK), another ‘A’ stock, has also hit a new all-time high since breaking out of its year-and-a-half long base two weeks ago.

Aruba Networks (ARUN) and Ulta Salon (ULTA) also join the list after being listed here with the others last week.

There are a number of other growth stocks poised to do the same, as long as the market remains buyer friendly.

Technically Speaking

Major Indexes – Weekly Price Action

Major Indexes – Weekly Volume Action

Primary Indexes (ETFs) – Weekly Price Action

Sectors (ETFs) – Weekly Price Action

News To Watch This Week

Earnings:

• MONDAY – CKE Restaurants (CKR), Palm, Inc. (PALM)
• TUESDAY – Adobe Systems (ADBE), Jabil Circuit, Inc. (JBL)
• WEDNESDAY – Bed Bath & Beyond Inc. (BBBY), CarMax, Inc (KMX), Herman Miller (MLHR), Nike (NKE)
• THURSDAY – ConAgra Foods (CAG), Darden Restaurants (DRI), Lennar Corporation (LEN), Oracle (ORCL), Research In Motion Limited (RIMM)
• FRIDAY – KB Home (KBH)

Economic:

• MONDAY – none
• TUESDAY – Existing Home Sales , FHFA Housing Price Index
• WEDNESDAY – New Home Sales , Crude Inventories, FOMC Rate Decision
• THURSDAY – Durable Orders , Initial Claims , Continuing Claims
• FRIDAY – GDP Third Estimate, U Michigan Sentiment

The Word On The Street

• “We’re in the area that I call the “dead zone.” I’ve been here before, and it’s not easy to write in the dead zone. The dead zone tends to appear after a period of dramatic and clearly-defined action. After such periods the market will often act like an exhausted prize fighter who has been knocked down to the canvas. He gets to his feet, but he is unsteady on his feet, and he’s playing for time — until his head clears. He’s fending off the other fighter as best he can, and he’s depending on his experience. Will he make it to the end of the round? But what kind of shape is he in for the next round? Richard Russell of the Dow Theory Letters newsletter, as reported by benzinga.com

Sharp rallies accompanied by heavy buy-volume across the major indexes tells us institutions are showing some interest in the long side of this market.

Some of our friends in the media suggest it’s all due to less fear over European concerns, but to us it’s just good old fashioned buying.

This type of follow through off market lows has been evident in every major bull move the market move. But not all follow through has led to sustained rallies.

As the major averages poke above their 40-week moving averages we want to see them gain traction.

It’s important quality leadership step up here. While the not so bullish indication of Oil Services leadership led Tuesday’s action with a 5% rally, it’s more encouraging that we got some traditional leaders of sustainable rallies from Semiconductors (SMH), up 4.5%, Technology (IGN), up nearly 3% and Transportation (IYT), also up nearly 3%.

Further confirmation in coming sessions from other key sectors, like Retail (XRT), up more than 1%, and Finance (XLF), up more than 2%, would be positive signs for the broader market. We want to measure this action weekly as one day weighs little in the bigger picture.

And as Growth Stock buyers, we want to see recent breakouts stick from top stocks such as Mercadolibre (MELI), Chipotle Mexican Grill (CMG), Akamai Technologies (AKAM) and Deckers Outdoor Corp. (DECK.)

We have a number of other top stocks poised to follow these leaders. Much of their success will be tied to the number of their peers that can continue to chug higher.

Best,

Dan

thegrowthstockreport.com

We’re on the lookout for a Follow Through Day this week, where at least a 1.7% rally on one of the major indexes in a day, with volume greater than the day before, would tell us institutions are stepping up.

Without the heavy buyers, we’re unlikely to change the Sell Bias we’ve held for more than a month now.

The broader market’s heightened volatility around key technical support areas for the last three weeks has been tough for Bulls and Bears alike.

Trading ranges can be hell on the speculator. Where bulls can say a bottom is being hammered in, bears argue nothing has been able to inspire the major averages to hold convincingly above their 40-week moving averages.

We chose not to think so much in times like these. Eventually the market will find its traction one way or another. That’s when we’ll do our job of weighing out the evidence to gauge the sustainability for either direction.

As the majority of sectors wrestle with their 40-week averages, it’s too early to tell which way the tug of war will win out. Often these averages serve as technical support areas, where at a minimum, we might expect a more substantial bounce than what we’ve had so far.

Last week’s broad-based gain was mostly due to Thursday’s rally, with two of the hardest hit sectors, Energy and Materials leading the charge.

For any enduring rally to occur, we’d like to see sectors like Retail, Semiconductors and Financial to take charge.

Stay tuned,

Dan

thegrowthstockreport.com

Technically Speaking

Market Bias

Seller’s Edge

Major Index Price Action

Major Index Volume Action

Primary Indexes – ETFs

Sectors – ETFs

News To Watch This Week

Monday June 14 :

• Earnings : Chindex ( CHDX ), Korn/Ferry ( KFY ), La-Z-Boy ( LZB ), MDS Inc ( MDZ )
• Economic: None

Tuesday June 15 :

• Earnings : Best Buy ( BBY ), Casey’s General ( CASY ), FactSet ( FDS )
• Economic: Export Prices ex-ag, Import Prices ex-oil, Empire Manufacturing Survey, Net Long-Term TIC Flows

Wednesday, June 16 :

• Earnings: American Apparel ( APP ), Canadian Solar ( CSIQ ), FedEx ( FDX)
• Economic: Housing Starts, Building Permits, PPI, Core PPI, Capacity Utilization , Industrial Production , Crude Inventories

Thursday, June 17 :

• Earnings: Actuant ( ATU ), J.M. Smucker ( SJM ), Kroger ( KR ), Pier 1 Imports ( PIR )
• Economic: Initial Claims, Continuing Claims, CPI, Core CPI, Current Account Balance , Leading Indicators, Philadelphia Fed

Friday, June 18 :

• Earnings: None

• Economic: None

The Word On The Street

• I am preparing for Flash Crash 2…sadly the excuses used to play down Flash Crash 1 have been exposed as bogus, so I wonder what the next set of excuses are – its been a while since we used the old ‘rogue trader’ excuse so my money is on that horse. Bob Janjuah, Chief Credit Strategist at RBS
• “We have just entered Act II” of the crisis as Europe’s fiscal woes worsen and governments are pressured to curb budget deficits that may push the global economy back into recession, according to George Soros via Bloomberg.
• What differentiates this correction and the one we saw in February is that the leading indicators are unwinding this time around. That should leave us sceptical that any rally will persist for long. Albert Edwards, Soc Gen strategist
• The odds of a double-dip recession remain very low for 2010 and we would need to see a “persistent” decline in the ECRI’s Leading Indicators Index to be convinced that the risks of a double dip are here. Despite this, a slow-down is a near guarantee and that profits have likely already peaked for this cycle, according to Lakshman Achuthan, ECRI Managing Director

This Week’s Word On Discipline

“In the last analysis, our only freedom is the freedom to discipline ourselves.” –Bernard Baruch

This Market Report is our broad analysis that is the foundation for our Growth Stock Report that highlights opportunities in individual stocks.

With the major indexes poised to test their 200-day moving averages it looks like the bounce we we’re looking for is coming along.

Before jumping on the Bull wagon, we want to have confirmation via a Follow Through Day, where a rally of at least 1.7% on at least one of the major indexes with volume greater than the day before gives us indication that institutions are on board.

Sharp rallies are not uncommon in Bear markets. We’ll believe Wednesday’s action was just that until we have reason to believe otherwise.

Bounces off lows in Energy names were big drivers for the S&P 100 as Haliburton, +12%, Schlumberger, +9%, and Conocophilips, +4%, helped lead the action.

For Growth Stocks, nice moves from the likes of Deckers (DECK), Chipotle (CMG) and Mercadolibre (MELI) keep the fire alive. Breakout watch stock Ulta Salon (ULTA) held within its technical base.

New research on Growth Stocks is posted on our site today.

Best,

Dan

thegrowthstockreport.com

For a week that saw the major indexes mostly flat, the effect of negative news on the market, such as credit- ratings downgrades of Greece, Portugal and Spain, gives speculators some indication the worst may be priced in.

Sharp rallies from U.S. stocks, after hitting and undercutting key support levels last week, such as the S&P 500 testing its low of the year and the Dow regaining its psychological 10,000 mark after a dip below, coincided with an announcement from China that it wouldn’t dump its European holdings. Whether it was the levels or the announcement that triggered the surge is for you to decide.

After the Dow put in its worst May in 70 years, down 7.92%, where we go from here depends largely on how much selling pressure remains.

Bullish hammer bars on the weekly charts of the majority of stock sectors gives the market an encouraging near-term look. (See Technically Speaking below.) If the stage is set for rally, we’ll need the commitment of institutions for anything enduring to take place.

Until we get confirmation through volume that institutional buyers are willing to load up at these prices, we’re sticking to our Sell Bias. The multiple Distribution Days that turned us into bears several weeks ago will need to be countered by a Follow Through Day (FTD) to signal a reversal.

The longstanding FTD indicator, made popular by William O’Neal of Investors Business Daily, calls for at least one of the major indexes rallying at least 1.7% on volume greater than the day before. This signal has accompanied every major bull leg. But not every FTD has led to a new bull run.

Any bounce without an FTD would would likely lead to another selling opportunity. The scenario might look something like this:

Odds of the market hitting new lows this year weigh heavy with statistics-backed research, such as John Hussman’s Aunt Minnies, that suggest a bigger market correction is in the works. The scenario fits well with the a monthly Dow chart going back 15 years, where another bearish head-and-shoulder pattern looms.

Investors Intelligence’s Bull/Bear ratio of 1.35 has also tilted to the Bears, and would have further to drop to hit its traditional extremes of below .80, where capitulation would likely take place.

The landscape for our beloved Growth Stocks, which serve as indicators themselves, also confirms the bigger bearish picture with low numbers of quality stocks setting up in technical bases and breaking out. While we do have some encouraging names to follow, it’s pretty much a tight market.

Dan,

thegrowthstockreport.com

Technically Speaking

Market Bias

Seller’s Edge

Key sectors attempting bounces from support levels bode well for a bounce.

Strong trends are often marked with confirmation from semiconductors (SMH), retail (XRT), financials (XLF) and transportation (IYT), which all possess similar chart characteristics this week.
Last weeks breakdown through key support for broker dealers (IAI) looks as if the signal was canceled by the rally.

Major Indexes – ETFs

Sectors – ETFs

Four-Week Volume Trend

News To Watch This Week

Earnings:

• MONDAY – Memorial Day
• TUESDAY – none
• WEDNESDAY – Hovnanian Enterprises, Inc. (HOV), Shoe Carnival (SCVL)
• THURSDAY – America’s Car-Mart, Inc. (CRMT), Joy Global Inc. (JOYG), Quiksilver (ZQK), Ulta Salon, Cosmetics & Fragrance, Inc. (ULTA), Wimm-Bill-Dann Foods OJSC (WBD)
• FRIDAY – China Medical Technologies, Inc. (CMED)

Economic:

• MONDAY – Memorial Day
• TUESDAY – Construction Spending, ISM Index
• WEDNESDAY – Pending Home Sales, Crude Inventories, Auto Sales, Truck Sales
• THURSDAY – ADP Employment Change, Productivity-Rev., Unit Labor Costs, Initial Claims, Continuing Claims, Factory Orders, ISM Services
• FRIDAY – Nonfarm Payrolls, Unemployment Rate, Hourly Earnings, Average Workweek

The Word On The Street

• “I think they’re going to stabilize in this general area, and then we’re going to have a significant move to the upside,” Barton Biggs, who runs New York-based hedge fund Traxis Partners LP and whose flagship fund returned three times the industry average last year, said in a Bloomberg Television interview.
• In past intraday Crashes (a la 5/6’s “Flash Crash”) markets stabilize average 30 days later. It has been 21 days since the intraday decline of 9%. Since 1900, in the 6 prior instances of 9%-plus intraday crashes, markets tend to bottom by day 32. J.P. Morgan stock analyst Thomas Lee. WSJ.
• “The best place to have your money is in either sound currencies or real assets. For my money, real assets are a better place to be because, throughout history, when governments have started printing a lot of money, the money has gone into real things – whether that’s silver, or cotton, or natural gas – something that’s real that people can use. Putting into paper money at a time when paper money is being debased all over the world is usually not a good thing to do.” Jim Rogers.

As long as uncertainty prevails over Europe’s solvency issues we’ll expect to see more volatility.

Technically Speaking

Upside: Potential bounce faces resistanceat 1100-ish, the 200-day moving average, then 1170-ish, the 50-day average. Recent highs from Consumer Goods companies, like Altria (MO), Sara Lee (SLE) and Hasbro (HAS), are potential leaders.

Downside: Breakdowns in healthcare stocks like Baxter (BAX), Gilead Sciences (GILD) and Amgen (AMGN) threaten to lead the S&P down to the support of its low for the year, the 1040-ish level.

Major Indexes – ETFs

Bias	Symbol	ETF	1-Week	4-Weeks
	TLH	iShares Barclays 10 Year Treasury (9.4yr)	2%	6%
+	AGG	iShares Barclays Aggregate Bond (4.3yr)	1%	2%
+	BWX	SPDR Barcap Global Ex-U.S. Bond (6.5yr)	1%	-3%
+	BSV	Vanguard Short-Tm Bond Mix (2.6yr)	0%	1%
	LQD	iShares iBoxx Invest Grade Bond (7.1yr)	0%	0%
	SHY	Barclays Low Duration Treasury ETF (1.9yr)	0%	1%
	SHV	Barclays Short-Term Treasury (0.4)	0%	0%
	EMB	iShares JPM Emerg Markets Bond (7.0yr)	-2%	-3%
+	TIP	iShares Barclays TIPS (6.0yr)	0%	2%
+	DBA	DB Agricultural Commodities Index	0%	-4%
	HYG	iBoxx $ High Yield Corporate Bond (4.2yr)	-2%	-5%
+	IEV	iShares S&P Europe 350 Index Fund	-3%	-15%
	ACWI	iShares MSCI All-World ACWI Index	-4%	-13%
	EFA	iShares MSCI EAFE Index	-3%	-14%
	DIA	SPDR Dow Jones Industrial Average	-4%	-9%
	SPY	SPDR S&P 500 Index	-4%	-10%
+	GLD	SPDR Gold Shares	-4%	2%
	VEU	Vanguard FTSE All-World ex-US	-4%	-14%
+	MDY	S&P MidCap 400 SPDRs	-5%	-12%
+	IWM	iShares Russell 2000 Index Fund	-6%	-12%
	DBC	PowerShares DB Commodity Index	-5%	-12%
	AAXJ	iShares MSCI Asia ex-Japan	-5%	-12%
	EEM	iShares MSCI Emerging Markets	-5%	-13%
	ILF	iShares S&P Latin America	-6%	-15%
	EPP	iShares MSCI Pacific ex-Japan	-7%	-17%

Sectors – ETFs

Symbol	Symbol	ETF	1-Week	4-Weeks
+	XLP	U.S. Consumer Staples Sector SPDR	-2%	-5%
+	IYZ	iShares Dow Jones Telecomm	-3%	-7%
+	XRT	Retail Industry SPDR	-3%	-8%
+	IGV	S&P Software Industry Index	-5%	-11%
	SMH	Semiconductor HOLDRs	-2%	-11%
+	XLY	U.S. Consumer Discret Sector SPDR	-4%	-11%
	XLK	U.S. Technology Sector SPDR	-4%	-11%
	XLU	U.S. Utilities Sector SPDR	-4%	-7%
+	FDN	First Trust DJ Internet Index	-4%	11%
	KCE	SPDR KBW Capital Markets	-4%	-12%
	XLV	U.S. Health Care Sector SPDR	-4%	-8%
	PPH	Pharmaceutical HOLDRs	-4%	-8%
	XLB	U.S. Materials Sector SPDR	-4%	-13%
+	PPA	PowerShares Aerospace & Defense	-5%	-12%
+	IHI	DJ U.S. Medical Devices	-5%	-8%
+	IGN	iShares S&P U.S. Tech-Networking ETF	-5%	-11%
	IBB	iShares Nasdaq Biotechnology Index	-5%	-11%
	XLF	U.S. Financial Sector SPDR	-4%	-12%
+	IYT	iShares Dow Jones Transports	-6%	-10%
+	XLI	U.S. Industrials Sector SPDR	-6%	-11%
	KIE	SPDR KBW Insurance	-5%	-15%
	XLE	U.S. Energy Sector SPDR	-6%	-15%
	KRE	KBW Regional Bank Industry SPDR	-7%	-15%
	IGE	iShares S&P N. Amer Nat. Resources	-6%	-14%
	KBE	KBW Bank Industry Index SPDR	-6%	-13%
+	XHB	S&P Homebuilders SPDR	-7%	-15%
	OIH	Oil Services HOLDR	-7%	-23%
	XME	S&P Metals & Mining SPDR	-10%	-18%

Four-Week Volume Trend

Bias	Index	Major Accumultion	Minor Accumulation	Major Distribution	Minor Distribution
	Dow	1	0	8	0
	S&P 500	1	0	8	0
	Nasdaq	1	0	7	0
	Russell2000	1	1	6	1
Accumulation: index up with more volume than previous day. Distribution: index down with more volume than previous day. Major: > 60-day average, Minor: <.

News To Watch This Week

Earnings:

• MONDAY – Campbell Soup (CPB), Guess (GES)
• TUESDAY – Autozone Inc. (AZO), DSW Inc. (DSW), Stanley, Inc.
• WEDNESDAY –American Eagle Outfitters Inc (AEO), Dress Barn (DBRN)
• THURSDAY – Costco Wholesale Corporation (COST), H.J. Heinz Company (HNZ), J. Crew Group, Inc. (JCG), Tiffany & Co. (TIF)
• FRIDAY – Quality Systems (QSII)

Economic:

• MONDAY – Existing Home Sales
• TUESDAY – -Shiller 20-city Index, Consumer Confidence
• WEDNESDAY – Durable Orders, New Home Sales, Crude Inventories
• THURSDAY – Initial Claims , Continuing Claims, GDP – Second Estimate, GDP Deflator – Second Estimate
• FRIDAY – Personal Income, Personal Spending, PCE Prices – Core, Chicago PMI, U. Michigan Consumer Sentiment
  

Word On The Street

- “It always sounds more than a bit stupid and alarmist to predict a crash, but I did it in 2007 and nailed it. I am going to it again now. Raoul Paul, The Global Macro Investor newsletter.

- “The world should be discussing deflation, not inflation. The world should be discussing buying 30-yr. government bonds, not continually wondering like a stuck record where the first rate hike will appear. RBS’s European Rates Strategy team on what it calls Great Depression II.

- “We are in uncharted waters on account of several issues, including what is going on in Europe and other important structural regime changes. In economic terms, European developments are unambiguously bad for global growth.” Mohamed El-Erian, co-chief investment officer of PIMCO.

This Week’s Word On Discipline

“We are what we repeatedly do. Excellence, then, is not an act, but a habit.” – Aristotle

The Growth Stock Report

Market Bias

Seler’s Edge

The Growth Stock Landscape

An overall bearish tone in the market has us more focussed on the brakes rather than the accelerator.

Multiple Distribution days across the major indexes in the last couple of weeks has warned us very clearly.

Odds are the major indexes will continue trading under their 50-day moving averages as long as the selling volume dominates.

But as always, we’re alert for anything. Bear legs are notorious for sharp u-turns. Heavy selling Wednesday was followed by strong buying into the close, and it’s often the smart money that ends sessions.

We’ve been on the lookout for a high-volume rally with at least one of the indexes powering about 2% higher in a session. Without this type of follow through any rally we might get will be suspect – at least that’s what history tells us.

As many stocks break down across the market, we still see some top-quality names setting up to breakout of technical bases. While none meet our strict Matrix criteria of stellar back-to-back improving quarters, we have a number of solid growers we deem “A” grade.

The success of these breakouts will be telling of others looking to do the same. We’re not aggressive buyers just yet.

Setting up or breaking out are:

Alamo Group (AG)

Affymax Inc. (AFFY)

Ulta Salon (ULTA)

K12 Inc. (LRN)

Maidenform Brands (MFB)

Amerigroup Corp. (AGP)

Hasbro Inc. (HAS)

Patni Computer Systems (PTI)

American Greetings (AM)

Chipotle Mexican Grill (CMG)

Akamai Technologies (AKAM)

On the short side, we like the look of the following trading below their major moving averages and raised volatility:

Overseas Shipholding (OSG)

Comstock Resources (CRK)

Wellcare Health Plans (WCG)

Unit Corp. (UNT)

Terex Corp. (TEX)

Intrepid Potash (IPI)

Quicksilver Resources (KWK)

Digital River Inc. (DRIV)

Affymetrix (AFFX)

Barnes & Noble (BKS)

Just to keep a finger in the market, we’ve nibbled a bit on Affymax (AFFY), as increased volume hints to a breakout, and Hi-Tech Pharmacal(HITK), which has also seen a volume boost and threatens to reverse a bearish head-and-shoulders pattern. We love it when these patterns fail and test the faith of technical analysis geeks.

AFFY and HITK are not full positions for us. We have small profit targets, of 5% to 10%, assuming market conditions remain. They’re listed in the Special Situation section below.

Remember, certified buy signals for Growth Stocks come with moves through buy-points on high-volume.

Our one full short position is in Terex Corp. (TEX).

Here’s A Run Down On Our Open Positions:

Box Score

LONGS

SHORTS

SPECIAL SITUATION

*Bold Marks Hit

Terex Corp. (TEX)our short position got some downside fuel via heavy sell-volume under its 50-day average, though has its 200-day as support.

DISCLAIMER: We may own the stocks discussed here. Data used here is accurate to the best of our knowledge, though may be subject to error. Trading in stocks can result in losses, which in some cases may total more than invested. Prudent money management involves only risking money you can afford to lose!

GSRTrades Weekly Market Report

Market Bias

Seller’s Edge

Where We Are

Friday’s heavy selling confirms our bearish bias.

Technically Speaking

MAJOR INDEX BIAS & PERFORMANCE FOR WEEK
BIAS	Index	Chg.	%	Action
+	DJIA	+240	+2.31%	Sells off after hitting 50-day MA
+	Nasdaq	+81	+3.58%	Sells off after hitting 50-day MA
+	S&P 500	+25	+2.23%	Sells off after hitting 50-day MA
+	Russ 2K	+41	+6.28%	Closes just under 50-day MA
or = Above or Below 40-week exponential moving average. + = 50-day SMA is above the 200-day MA

FOUR-WEEK VOLUME INDICATOR
		Accumulation		Distribution
BIAS	Index	Major	Minor	Major	Minor
	DJIA	2	0	5	0
	Nasdaq	3	0	4	0
	S&P 500	1	0	6	0
	Russ 2K	2	0	4	1
Accumulation: index up with more volume than previous day. Distribution: index down with more volume than previous day. Major: > 60-day average, Minor: <.

SECTOR TREND BIAS & PERFORMANCE FOR WEEK
BIAS	Sector	%	Action
+	U.S. Dollar, $USD	+1.94%	New 52-wk High
+	Gold & Silver Miners, $XAU	+3.99%	Breaks out of 5-month base
+	Commodities, $DJAIG	-0.64%	Sells under major MAs
+	Consumers, $CMR	+1.79%	Sells off after hitting 50-day MA
+	Cyclicals, $CYC	+4.38%	Sells off after hitting 50-day MA
+	Technology, $DJUSTC	+3.47%	Sells off after hitting 50-day MA
+	Semiconductors, $SOX	+2.05%	Sells off after hitting 50-day MA
+	Software, $GSO	+7.97%	Closes on 50-day MA
+	Telecoms, $XTC	+4.09%	Sells off after hitting 50-day MA
+	Banks, $BKX	+3.06%	Closes just under 50-day MA
+	Broker Dealers, $XBD	+1.52%	Sells off after hitting 200-day MA
+	Retail, $RLX	+2.61%	Closes just under 50-day MA
+	Healthcare, $HCX	+0.68%	Sells off after hitting 200-day MA
+	Biotechnology, $BKX	+3.65%	Waivers between major MAs
+	Pharmaceutical, $DRG	-0.20%	Little changed under major MAs
+	REITs, $DJR	+3.57%	Holds above major MAs
+	Homebuilders, $DJUSHB	+1.67%	Holds above 200-day MA
+	Transportation, $TRAN	+4.41%	Holds above 50-day MA
+	Airlines, $XAL	+8.23%	Closes just under 50-day MA
+	Defense, $DFX	+3.03%	Closes just under 50-day MA
+	Energy Index, $IXE	+2.03%	Closes just under 200-day MA
or = Above or Below 40-week exponential moving average. + = 50-day MA is above the 200-day MA

News To Watch This Week

Earnings:

• MONDAY – Agilent Technologies Inc. (A), Lowe’s Companies (LOW), Sears Holdings Corp (SHLD)
• TUESDAY – Abercrombie & Fitch Co. (ANF), Dick’s Sporting Goods, Inc. (DKS), Hewlett-Packard (HPQ), Home Depot Inc (HD), The TJX Companies, Inc. (TJX), Wal-Mart Stores, Inc. (WMT)
• WEDNESDAY – Applied Materials (AMAT), Autodesk, Inc. (ADSK), BJ’s Wholesale Club (BJ), Deere & Company (DE), Gymboree (GYMB), Hormel Foods Corporation (HRL), Hot Topic (HOTT), Limited Brands (LTD), PetSmart (PETM), Target Corporation (TGT)
• THURSDAY – Dell, Inc. (DELL), Dollar Tree Stores (DLTR), Ross Stores, Inc. (ROST), Staples, Inc. (SPLS), Stein Mart, Inc. (SMRT), The Buckle (BKE), Williams-Sonoma (WSM), Zumiez Inc. (ZUMZ)
• FRIDAY – AnnTaylor Stores (ANN), Gap Inc. (GPS)

Economic:

• MONDAY – Net Long-Term TIC Flows
• TUESDAY – Building Permits, PPI, Housing Starts,
• WEDNESDAY – CPI, Crude Inventories
• THURSDAY – Continuing Claims, Initial Claims, Leading Indicators, Philadelphia Fed
• FRIDAY – none
  

This Week’s Word On Discipline

“What it lies in our power to do, it lies in our power not do.” — Aristotle

This Market Report is our broad analysis that is the foundation for our Growth Stock Report that highlights opportunities in individual stocks.

GSRTrades Weekly Market Report

Market Bias

Seller’s Edge

Where We Are

We’re sticking to our Sell Bias as we wait to better measure the aftermath of last week’s correction.

From a technical perspective, the sharp turnaround the major indexes made off their 200-day moving averages looks as if capitulation was achieved.

Whether or not selling pressure was exhausted has yet to be determined. Friday’s action after the “flash crash” gave an impression folks were still spooked over the sudden drop as heavy sell-volume piled in.

It’s not hard to imagine a lot of funds just waiting for an invitation to exit the market. Managers want to lock-in gains from the past year’s historic rally.

Our volume indicators are tilted to the sellers as multiple Distribution Days, where volume exceeds the previous day on a down day, dominates recent action.

We won’t really know how interested buyers are until we see the amount of volume is produced on an up day.

If the market is going to rebound it also needs to show some Leadership. Most of the larger stocks in the market appear poised for more selling as critical support levels were broken last week. But often it’s the case that the market rallies just when things look the worst.

After exiting most of our short positions last week we’re going to sit tight and wait for better odds to come forth.

Technically Speaking

MAJOR INDEX BIAS & PERFORMANCE FOR WEEK
BIAS	Index	Chg.	%	Action
+	DJIA	-628	-5.71%	Rebounds from 200-day MA
+	Nasdaq	-69	-7.95%	Rebounds from 200-day MA
+	NDX 100	-151	-7.56%	Rebounds from 200-day MA
+	S&P 500	-76	-6.39%	Rebounds from 200-day MA
+	S&P 100	-18	-6.21%	Rebounds from 200-day MA
+	Russ 2K	-64	-8.88%	Closes above 200-day MA
or = Above or Below 40-week exponential moving average. + = 50-day SMA is above the 200-day MA

FOUR-WEEK VOLUME INDICATOR BIAS
		Accumulation		Distribution
BIAS	Index	Major	Minor	Major	Minor
	DJIA	4	0	4	0
	Nasdaq	4	0	4	0
	S&P 500	3	0	5	0
	Russ. 2K	4	0	4	0
Accumulation: index up with more volume than previous day. Distribution: index down with more volume than previous day. Major: > 60-day average, Minor: <.

SECTOR TREND BIAS & PERFORMANCE FOR WEEK
BIAS	Sector	%	Action
+	U.S. Dollar, $USD	+3.37%	New 52-wk High
+	Gold & Silver Miners, $XAU	+3.99%	Pulls back to 50-day MA
+	Commodities, $DJAIG	-4.48%	Falls below 200-day MA
+	Consumers, $CMR	-4.60%	Rebounds from 200-day MA
+	Cyclicals, $CYC	-9.16%	Closes above 200-day MA
+	Technology, $DJUSTC	-7.61%	Rebounds from 200-day MA
+	Semiconductors, $SOX	-7.80%	Rebounds from 200-day MA
+	Software, $GSO	-7.67%	Closes on 200-day MA
+	Telecoms, $XTC	-5.72%	Closes on 200-day MA
+	Banks, $BKX	-7.21%	Closes below 50-day MA
+	Broker Dealers, $XBD	-7.31%	Crashes below 200-day MA
+	Retail, $RLX	-6.71%	Closes below 50-day MA
+	Healthcare, $HCX	-3.89%	Closes below 200-day MA
+	Biotechnology, $BKX	-12.63%	Closes above 200-day MA
+	Pharmaceutical, $DRG	-4.65%	Pulls back to 200-day MA
+	REITs, $DJR	-6.26%	Closes below 50-day MA
+	Homebuilders, $DJUSHB	-11.10%	Closes above 200-day MA
+	Transportation, $TRAN	-7.98%	Closes below 50-day MA
+	Airlines, $XAL	-9.90%	Closes above 200-day MA
+	Defense, $DFX	-7.88%	Closes below 50-day MA
+	Energy Index, $IXE	-8.31%	Closes below 200-day MA
or = Above or Below 40-week exponential moving average. + = 50-day MA is above the 200-day MA

News To Watch This Week

Earnings:

• MONDAY: Blockbuster Inc. (BBI), Denny’s Corporation (DENN), Dillard’s (DDS), Fluor Corporation (FLR), Priceline.com (PCLN), Tyson Foods (TSN), Wal-Mart Stores, Inc. (WMT)
• TUESDAY: Ctrip.com International, Ltd. (CTRP), Toyota Motor Corporation (TM), Walt Disney (DIS)
• WEDNESDAY: Cisco Systems (CSCO), DryShips Inc. (DRYS), Whole Foods Market (WFMI)
• THURSDAY: Dick’s Sporting Goods, Inc. (DKS), Kohls Corporation (KSS), Nordstrom (JWN), Urban Outfitters (URBN)
• FRIDAY: JCPenney (JCP) 

Economic:

• MONDAY: none
• TUESDAY: Wholesale Inventories    
• WEDNESDAY: Trade Balance, Crude Inventories, Treasury Budget
• THURSDAY: Initial Claims, Continuing Claims, Export Prices ex-ag., Import Prices ex-oil
• FRIDAY: Retail Sales, Capacity Utilization, Industrial Production, Mich Sentiment, Business Inventories
  
  

This Week’s Word On Discipline

“Beware of endeavoring to become a great man in a hurry. One such attempt in ten thousand may succeed. These are fearful odds.” — Benjamin Disraeli

This Market Report is our broad analysis that is the foundation for our Growth Stock Report, which highlights trading opportunities in individual stocks.

Market Bias

Seller’s Edge

Where We Are

Technically Speaking

MAJOR INDEX BIAS & PERFORMANCE FOR WEEK
BIAS	Index	Chg.	%	Action
+	DJIA	-196	-1.75%	Pulls back from high
+	Nasdaq	-69	-2.73%	Pulls back from high
+	NDX 100	-55	-2.66%	Pulls back from high
+	S&P 500	-31	-2.51%	Pulls back from high
+	S&P 100	-12	-2.24%	Pulls back from high
+	Russ 2K	-25	-3.41%	Pulls back from high
or = Above or Below 40-week exponential moving average. + = 50-day SMA is above the 200-day MA

FOUR-WEEK VOLUME INDICATOR BIAS
		Accumulation		Distribution
BIAS	Index	Major	Minor	Major	Minor
	DJIA	4	0	4	1
	Nasdaq	4	0	2	0
	S&P 500	3	0	4	0
	Russ. 2K	4	0	4	0
Accumulation: index up with more volume than previous day. Distribution: index down with more volume than previous day. Major: > 60-day average, Minor: <.

SECTOR TREND BIAS & PERFORMANCE FOR WEEK
BIAS	Sector	%	Action
+	U.S. Dollar, $DXC	+0.51%	Shy of 52-wk high
+	Gold & Silver Miners, $XAU	+3.82%	Breaks north of major MAs
+	Commodities, $DJAIG	-0.99%	Consolidates on 50-day MA
+	Consumers, $CMR	-2.26%	Pulls back from high
+	Cyclicals, $CYC	-3.17%	Pulls back from high
+	Technology, $DJUSTC	-3.30%	Pulls back from high
+	Semiconductors, $SOX	-6.08%	Pulls back from high
+	Software, $GSO	-3.39%	Pulls back from high
+	Telecoms, $XTC	-1.51%	Pulls back to 50-day MA
+	Banks, $BKX	-3.85%	Pulls back from high
+	Broker Dealers, $XBD	-3.15%	Consolidates above 50-day MA
+	Retail, $RLX	-3.93%	Pulls back from high
+	Healthcare, $HCX	-1.48%	Sells off under 50-day MA
+	Biotechnology, $BKX	+0.25%	Holds at 50-day MA
+	Pharmaceutical, $DRG	-1.90%	Pulls back to 200-day MA
+	REITs, $DJR	-1.30%	Pulls back from high
+	Homebuilders, $DJUSHB	-1.94%	Pulls back from high
+	Transportation, $TRAN	-1.69%	Pulls back from high
+	Airlines, $XAL	-2.74%	Holds at 50-day MA
+	Defense, $DFX	-1.41%	Pulls back from high
+	Energy Index, $IXE	-3.46%	Pulls back from high
or = Above or Below 40-week exponential moving average. + = 50-day MA is above the 200-day MA

News To Watch This Week

Earnings:

• MONDAY: Affymax, Inc. (AFFY), Almost Family (AFAM), BioLase Technology (BLTI), Clorox (CLX), Pitney Bowes Inc., (PBI), XTO Energy Inc. (XTO)
  
• TUESDAY: Archer Daniels Midland Company (ADM), Baker Hughes Incorporated (BHI), Cephalon, Inc. (CEPH), Dollar Financial Corp. (DLLR), DryShips Inc. (DRYS), Duke Energy Corporation (DUK), FirstEnergy (FE), j2 Global Communications (JCOM), Molson Coors Brewing Company (TAP), Peet’s Coffee & Tea (PEET), Thomson Reuters Corporation (TRI)
  
• WEDNESDAY: Boston Beer Company (SAM), Career Education (CECO), Garmin Ltd. (GRMN), Williams Companies Inc. (WMB), Wynn Resorts, Limited (WYNN)
  
• THURSDAY: Activision Blizzard, Inc. (ATVI), Bebe Stores (BEBE), Crocs, Inc. (CROX), Kraft Foods (KFT), Public Storage (PSA), Sara Lee (SLE)
  
  
• FRIDAY: Hansen Natural (HANS), UTStarcom (UTSI)
  

Economic:

• MONDAY: Personal Income, Personal Spending, Construction Spending, ISM Index, Auto Sales, Truck Sales
  
• TUESDAY: Factory Orders, Pending Home Sales
• WEDNESDAY: ADP Employment Change, ISM Services, Crude Inventories
  
• THURSDAY: Continuing Claims, Initial Claims, Productivity-Prel
  
• FRIDAY: Employment Report
  
  

This Week’s Word On Discipline

“Freedom is not procured by a full enjoyment of what is desired, but by controlling the desire.” –Epictetus

This Market Report is our broad analysis that is the foundation for our Growth Stock Report, which highlights trading opportunities in individual stocks.