Canslim.net Morning Comment & 7 Stocks You Need To Know For Tuesday

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Canslim.net Morning Comment & 7 Stocks You Need To Know For Tuesday

Posted on 05/29/2007 12:31:46 | Link | Post Comment

MORNING MARKET COMMENTARY
for Tuesday, May 29, 2007
Stocks Rally Ahead of Long Holiday Weekend
- Kenneth J. Gruneisen, CANSLIM Certified, Registered Principal, Source Capital Group, Inc. (Members NASD, SIPC)

US stocks rallied on lighter volume Friday as traders prepared for the long Memorial Day weekend. That was the opposite of what one typically would like to see - volume swelling as the major averages advance as a sign of institutional buying demand. But Friday's breadth was very clearly positive as advancers led decliners by greater than a 2-to-1 ratio on the NYSE and by nearly a 2-to-1 ratio on the Nasdaq exchanges. The total number of new 52-week highs on the NYSE and on the Nasdaq exchange shrank, but they still managed to outnumber new 52-week lows. However, there were only 14 high-ranked companies from the CANSLIM.net Leaders List that made new 52-week highs and appeared on the CANSLIM.net BreakOuts Page, down again from the 24 stocks that appeared on the prior session. Any sustained rally requires a healthy crop of fresh leaders, and recently that number reached triple digits. Leadership is suddenly vapid. (sign up is free)

STOCKS BREAKING ABOVE AND BELOW THEIR 50 DAY & 200 DAY M.A.

John Hussman's Market Climate for 5/29: "As of last week, the Market Climate for stocks remained characterized by unfavorable valuations, moderately favorable price trends, and a combination of overvalued, overbought, overbullish, rising-yield conditions that has historically produced not only returns below Treasury bills, on average, but deep, abrupt panic declines. As always, that's not a forecast or an outcome that we need to rely upon average returns below Treasury bills are sufficient reason to hedge our market exposure, but we certainly shouldn't rule out such a panic."

Dr. Brett's blog: Market Perspective 5/29: Interest Rates Up, Stocks Fall Back: "The Utilities sector took quite a hit during the week, as we now have only 34% of the stocks trading above their 50-day moving averages, down from well over 90% just recently. Rising rates appear to be the culprit. We're also seeing weakness in the real estate ETF (IYR), thanks to rising rates affecting the REITs. I would expect the market to show further weakness if those 10-year rates breach 5%. We're in a situation in which rising rates may be necessary to encourage international investors to hold dollars, given the weakness of the currency the lack of relative strength among U.S. equities, and the desire to diversify reserves on the part of China, the oil producers in the Middle East, and others."

Wall Street Breakfast in Seeking Alpha by SA Editors on May 29, 2007
What you need to know in early trading today.

24/7 Wall St. - Media Digest 5/29/2007 Reuters, WSJ, NYTimes, FT, Barron's

Upgrades / Downgrades / Initiations

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S&P FIVE-STAR RATED STOCKS ( ***** Strong Buys)

CANSLIM.net is designed to help investors develop a solid knowledge of the seven criteria of the CANSLIM™ stock selection method Investor's Business Daily founder William J. O'Neil explains in his book "How to Make Money in Stocks - A Winning System in Good Times or Bad" CANSLIM.net assists investors with the day-to-day application of this highly successful stock selection system of fundamentally strong companies that are setting up to buy or have broken out to the upside that are buyable with continuous updates throughout each trading day.A loud warning to the wise about Bear Markets: You absolutely do not buy breakouts during a bear market.

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