As mentioned last week, the window is open for a confirmation day:
"Historically, that would be evidenced by a significant follow-through
rally four to nine days after the first big move up after a longer
downturn. Requirements include the major indices rallying 1% to 2%, and
on greater-than-average volume, in that five-day window. It opens next
Lets have a look at today’s action, with the Dow up 182, the Nasdaq up over 41 points (2%) on 3 to 1 volume and the S&P500 gaining almost 21.
Although the buyers showed up today, they unfortunately forgot to buy in size. The NYSE ran 1.58B shares, while the Nasdaq had 1.49B shares Based on the weak volume, today does not count as a William O’Neil’s confirmation day.
That doesn’t mean that markets cannot build on this move, but so far, the burden of proof remains on buyers to prove this move up is the real deal.
They have not done that yet.
UPDATE: July 25, 2006 6:54am
This update combines the ideas from a few recent posts: On the one hand, we are still in the window ofr a confirmation day. On the other hand, the technicals are unimpressive and my working assumption is there are more lows before the next rally.
This is still a Missouri market ("Show Me"), and its guity until proven otherwise.
Hence, our strong opinions, weakly held.
Category: Technical Analysis