Another One Day Wonder??

Trader Talk

The major stock indexes enjoyed a solid rally today - as expected - on news the FED left interest rates unchanged - also inline with expectations. Volume was heavier than yesterday, though not overall that impressive.

Officially, the NASDAQ advanced 2.8% on 2.4 billion shares, while the Dow Industrials rose 2.9% on NYSE volume of 5.5 billion shares. The leadership profile remains negative, with 117 stocks making new highs versus 229 stocks making new lows.

The short term momentum oscillators are on the cusp of turning positive, while the AlphaKing Trading Indicator remains in sell mode. We have no new trades at this time.

Stock market bulls followed their usual pattern of pushing hard on FED announcement days, and while the gains were quite impressive, it remains to be seen whether this is a movie we have seen many times before of late (which means we drop hard going forward,) or this is the start of something different. The key here, like the key to all stock market bottom attempts worth noting, is the presence or absence of a 2%+ high volume follow-though advance going forward to confirm today's accumulation day. In the recent past, 2%+ days have landed in singular form, and new lows have landed shortly-thereafter.

If this indeed is going to go down as an it's-different-this-time bull nirvana event, then the big follow-through should land very soon. The internal wave count says pretty much the same thing: no follow-through and the super-bear pattern remains intact for the short, medium, and long term. A big follow through and the short term potential would call for a run toward the 200 day MA. Thus we are firmly in the land of indecision that will soon lead to an extremely important and meaningful outcome. Every breakout to new highs has been proceeded by a failed double-top attempt, while the bear market pattern of lower lows and lower highs are littered with double top and near-double top successes. Tomorrow should go a long way to answering this trend/momentum dilemma.

Kevin Wilde, Chief Trading Strategist AlphaKing.com.

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