The major indexes went into full rally mode to close out a day that saw the FOMC say it would keep rates low for a couple more years as severe challenges remain to the economy.
High volume, though not quite as high as yesterday’s sell off, gives some evidence a turning point may have occured.
We’ll start looking for signs of institutional buying on Friday, or a Follow Through Day, which would give further evidence of a potential bottom.
No guessing here. These Follow Through Days we’re looking for involve about a 2% up move in one of the major indexes accompanied by volume greater than the day before. We wait a few days to give the short sellers time to cover so as not to confuse it with real buying.
Disciples of William O’Neil’s CANSLIM methodology know exactly what this is. We’ve seen the indicator work often enough to watch for it ourselves.
Hi-dee-ho and hamburger!