Friday’s high volume marked good support for the market, but not exactly a Follow Through Day.
But Investors’ Business Daily sees things differently as they have changed their criteria for an FTD by counting their New America and 85-85 indexes as giving an FTD instead of one of the major indexes.
The traditional definition:
Developed by William J. O’Neil, a Follow Through Day is an indication of a potential change of trend in place. After the market has made a new low and a rally has been attempted, a follow through day will be identified when a major index closes up 1.7% or more for the day with an increase in volume from the day before. A follow through day can only occur between four and seven days from a potential bottom.
We’ve changed our bias to Buyers’ Caution.
To be honest, we’ve been ahead of IBD’s calls in the past, and see some problems with the technical situation of the market.