Unlike last month, today we had an O'Neil follow through day on all 4 indexes IBD tracks for that purpose (SPX, Nasdaq, NYSE composite, and DJIA). Volume was not hugely impressive, but greater than yesterday, and the percentage gain was more than enough to qualify. It appeared that today was going to be copy of yesterday, with another morning rally and a failure at 1105, but this time we didn't fail, and once 1105 gave way it was melt up time.
Giving impetus to the follow through was a big move in the SOX, the semiconductor index, which got through it's 50dma today with ease. Price doesn't do this chart justice; look at the price relative line, now at a new high.
Well, we start a new "confirmed rally", which means I will be sending out some more scouts. The last batch I sent out came back with arrows in their back sides. This follow through, having occured on four indexes simultaneously, probably has better chance of success, but we are in a period of seasonal weakness. We also have a potential head and shoulders pattern developing, with the right shoulder in the formative stage right now. So, short term I'm bullish, long term it's wait and see.
I will have the new highs update shortly.