Wednesday's broad market rally has a lot of Bulls convinced their party's not over.
We're still bearish until we see a Follow Through Day, with one of the indexes posting about a 2% gain on volume greater than the previous day, which would let us know institutions are on board.
Markets have a knack for sucking in dumb money. Wednesday's rally didn't have the volume behind it to give weight to the Bulls cause.
We want more convincing before announcing the Bear dead.
While the rally from last Thursday's low is strong, it may all be for nothing until a better gauge of the situation can be read.
Breakouts from technical bases from Consumer Staple stocks like Hasbro (NASDAQ:HAS), Pepsico (NYSE:PEP) and Altria (NYSE:MO) will tempt others poised to do the same.
A new high from IBM (NYSE:IBM), which came just shy of a base breakout Wednesday, would also add to the enthusiasm as a bellwether for other tech stocks.
Where a couple days ago the majority of S&P 100 stocks looked poised to follow through on breakdowns through support levels, they're now threatening to reverse those indications.
Growth Stocks are also showing some zing with breakouts from "A" rated names like Maidenform Brands (NYSE:MFB) and Affymax (OTCPK:AFFY).
Success of these breakouts would pave the way for more to follow. A negative close from AFFY a day after it broke out threatens to deduct from these odds.
We'll have a better feel for what may lay ahead when we see what kind of closes we get at the end of the week.
Stay tuned as we await for the Bull to show us more stable footing.
Disclosure: Short CMC