Investor’s Business Daily recorded Wednesday’s move in the Nasdaq as a Follow Through Day. I felt it was suspect from the beginning as the volume on the index was slack on the day. 

Rob Hanna is doing some excellent testing on the FTD, as well as just having an excellent blog. Check out the testing he has done on the FTD here: Follow Through Days.

Note on the Nasdaq chart above what I was saying about the volume. Nothing special, certainly, and today’s volume was greater.

The indexes are starting to develop some triangle patterns, which are good for me, as I trade them well.

The Dow Jones continues to impress me the most. Volume was light today, meaning today may wind up being just a healthy pullback, but I’m not holding my breath.

I was caught leaning long today, as I was looking for the indexes to attempt a higher-high after the recent higher-low. While I knew we were overbought going into the morning, I fully expected more strength today, especially after IBD proclaimed yesterday as a follow through day. While the higher-high is still possible, my bet is we test support first. If support is broken, then of course all eyes will be on the January low.

I intend to keep adding shorts, and will add a select long position as I find them. Today I added a short position in (DE: 28.77 0.00%) and yesterday I added a short in (FCX: 17.60 0.00%). Yesterday I added to my (CPHD: 11.17 0.00%) position and got a starter long position in (URBN: 12.82 0.00%).

As I mentioned earlier, I like trading the triangle pattern, and if the indexes continue working on the triangle, I will likely become more emboldened to aggressively get longer, or shorter, depending on how the triangle plays out.

(DE: 28.77 0.00%) reported yesterday, and while the report was good, they guided Q2 lower.