The broader market is looking strong as heavy buy-volume supports the major indexes above their 50-day averages.
But we take caution over the massive overhead resistance, that’s potential sellers looking to unload shares as the market returns to higher levels of the past.
As we’ve mentioned, we’re suspicious of any rally that lacks a good Follow Through Day, which is the case now.
The parameters of what makes a good FTD have been altered for today’s more volatile market.
Where 2% used to mark a good FTD, we now prefer to see 3% to 4%.
But with or without an FTD we still need to see Leadership show a strong hand to support new breakouts.
Our latest breakout from a top earner, Green Mountain Coffee (GMCR), is looking questionable.
GMCR is the only candidate we have in breakout mode.