Notch One To The Bulls

We got our bounce. Now let’s wait a bit to see if it sticks, and if real buyers will show up.

The Dow and S&P 500 closed their strong Thursday rallies right at the resistance marks of their key 200-day moving averages.

The Nasdaq’s positioning just above the key average bodes well for a sustained rally, with its tech-heavy components often serving as leadership for bull runs. Same can be said for semiconductors (SMH), retail (XRT) and financials (XLF.)

But before we get ahead of ourselves let’s remember we’re sticking to our Sell Bias until we get a Follow Through Day (FTD), where beginning Monday we want to see at least one of the major averages post about a 2% rally on volume greater than the day before.

Reason we wait before going on FTD watch is to give time for shorts to clear, so as not to confuse it with real buying.

Thursday’s volume, lesser than Wednesday’s and just a little better than average, doesn’t give us much to go bullish on.

Nonetheless, broad-based participation across all sectors was strong, and certainly tilts to the Bulls favor.

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