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Mike
06-21-2011, 02:21 PM
The NASDAQ is up over 1.75% this morning so far. Bill O'Neil mentioned on Saturday that in his view that up 1.75% on volume higher than the day before would be about right for a follow-through day. I know Dr. Chris Kacher is operating with a lower threshhold.

We look for a FTD on day-4 or later in a possible rally. By strictly counting blue bars (up bars) based on close-to-close daily bars we are just in day 2 today. However if you look at the red bar on 6/16 you will see the drop and close above the lows of the day. This can also count as day-1. With this in mind, today is day-4 rally count.

The leadership charts are damaged, not what you hope for a good set up for a sustained rally. Some stocks like LULU and FOSL are moving into hew high ground however. Both seem to have surpassed their upside price targets. ILMN chart looks okay. On the IBD50 the following stocks could achieve pocket pivot volume signature: MELI, BIIB, HS, TSCO, JAZZ, FTNT

It is my understanding that the Fed pumped twice their planned $4.5 billion POMO yesterday. Is this a little extra juice to prime a rally? Tomorrow the Fed speaks, this could be step two of a planned juice the market push by the Fed.

All in all this rally attempt might be tried with an expectation that the run up could be short lived. Moving up to the 50-day over the next week or two is about perfect to complete the head and shoulders pattern. The 50-day becomes the dividing line for the longer term picture.