A follow through day is a gain in major indexes for 1.25 % or more in high volume. The market did just that today.Â
IBD says this
The midterm election results and a 2.6% gain for the Nasdaq composite delivered a nice present for stock market bulls Wednesday. The Nasdaq 100 did even better, up 3.1%, helped by strong moves fromÂ FANG stocksAmazon.com(AMZN), up nearly 7%, and Netflix(NFLX), up 5%.
The Nasdaq composite followed through on the seventh day of its rally attempt as several top-rated growth stocks made explosive moves in the stock market today. The S&P 500 also followed through with conviction, and the Dow Jones industrial average surged also, both with gains of 2.1%.
lets look at if other stocks in S&P 500 are participating in the action yesterday .
Look at the chart below – 13 % increase in the number of S&P 500 stocks above their 50 days SMA!!
i have gotten into the market from all cash position yesterday.
Red flag Research shows that a distribution day in any of the first three sessions after a follow-through day can foretell a failed rally. A distribution day that comes later is easier for a rally to overcome. THE RISK DROPS OFF SHARPLY from the 6th day or so
Red flag 2 : top rated stocks action :: in early stages of new uptrend strong action of leading stocks is CRUCIAL. Top rated stocks should be breaking out of bases in big volume.
A confirmed uptrend can weather an occasional sell-off every week or two and still show the fight to keep rising.
THERE WERE 7 distribution days many times in 2017 yet it rose 37% !!
I have gotten in the market yesterday. Good deepavali gift!!