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Being Bearish Ain't Easy

|Includes:MercadoLibre, Inc. (MELI)

It's hard to be a short-term Bear with the nice bounce off the lows we had Thursday.



But before jumping on the Bull bandwagon we need to be patient and wait for confirmation of a Follow Through Day (FTD.) An FTD, which has accompanied every major bull-leg in the stock market, comes via at least a 1.7% rally on one of the major indexes on volume greater than the day before.

This show of institutional buying power would let us know the big boys are supporting these prices. We begin looking four days after a potential low, which in this case was made Tuesday, so as not to confuse it with nervous shorts covering their positions.

There were few decliners in Thursday's action. Energy stocks led the action higher, though any sustainable rally will likely have Leaders such as Tech, Finance and Retail behind it. Their progress will be watched closely in the coming sessions.

On the Growth Stock front, a high-volume base breakout from Mercadolibre (NASDAQ:MELI), a Latin online payments company, will also be watched as an indicator of success for others.

Breakouts have suffered in this market. But all it takes is a few to lead the way for more. Otherwise, we're looking for shorting opportunities with the event of a failed broader market rally.

Best,

Dan
thegrowthstockreport.com


Disclosure: Long MELI, HITK

Stocks: MELI