Follow-thru Day Arrives

Nice action in the market today. If you review my last few posts, you'll see that two important things I was looking for both happened today. First, the SPX broke convincingly above resistance at 1165 (the high from 4/26). That likely sparked additional short-covering and helped propel the market.

Second, today was the 4th day from the initial rally day I highlighted last Friday, the first day to look for a follow-thru day. We got that today, as the SPX gained +1.25% on accelerating volume. Confirmation that the recent downtrend has been reversed.

Now I don't know how high the market will climb on this rally, we'll just have to monitor the price/volume action. But I know I want to favor long positions here, as opposed to shorting stocks. I would look for SPEC 1165 (former resistance) to act as initial support, and SPEC 1190 to offer resistance. Hope you have your buy list ready...