Follow Through Day 10/2/2015 - Cansliming
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03 Oct Follow Through Day 10/2/2015

The stock market is an interesting place and odds are if you are reading this then you already know that! Well the events of the past few days have culminated in a follow through day today, Markets were up significantly and volume has increased signaling a follow through day. Funny things about follow through day’s they do not always work out, however since we never know what follow through day is going to work we have to take the signal and run with it.

We went long today, hopefully you bought something too. This particular market though is coming to an inflection point, we have the higher low that we created 4 days ago yet we are fast approaching a decending trendline that started with the market top on 7-20-2015. Since most decending trendlines are broken to the upside we will hopefully continue this trend and break out towards highs. However if you look around at individual stocks breakouts and solid formations are scarse. If you take history into account the market may float around (chop) for a while.

October is historically a great month in the markets and it may not be a coincidence that on 10-2 we have a follow through day! Earnings will tell though, we will be coming into earnings soon and that will tell part of the tale. Like I stated earlier if you look at stocks they are not looking so well, a vast majority of stocks are below their 50 day moving average and many have bear crosses, where the 50 day crosses below the 200 day, this is not a good sign. After such a long uptrend of course we want things to continue however the charts arent supporting a wide breadth bull market. While we may not get that we may have sector bull markets, just be aware of what you are trading, pay attention to sectors, the leaders in those sectors and the overall trend of supporting indicators such as transports and keep in mind resistance areas as we head upward, 200 day, 50 day and trendlines all can stop uptrends dead in their tracks if there is no institutional support.

If you do find some diamonds out there watch them, look for relative strength that is abnormally high and take profits according to your rules, maybe even sooner if things look shaky.

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