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Thursday, January 31, 2008

Follow Through Day?

Today's big move on higher volume than yesterday should count as a follow through day. IBD has not mentioned a rally attempt, so I will wait for their assessment tomorrow. There have been 3 other follow through days since the August panic, and 2 of them led to decent rallies, so we do have a chance of a good rally here.

1385 was tested again today, and failed again, but we closed above the 1370 resistance level, so that is positive. This is going to be a heavily news driven economy, so watch carefully for anything that can cause hiccups here (such as Paulson giving a news conference wearing a blue chiffon dress).

Almost the same picture on the Nasdaq. Today also qualifies as a follow through by my calculation. We failed to get above 2408, but there is strong support just above 2300.

The Russell 2000 doesn't count in IBD's methodology, and stockcharts doesn't have volume data. The volume on the IWM was lower today than yesterday, so it wouldn't qualify anyway.

GLD looks ready for another pullback here. This could take off again at any time, as the dollar looks like it's ready for another free-fall.

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