There are some important characteristics about this follow through that make the staying power of this rally more compelling. The market began its institutional accumulation on Friday with significantly higher volume. It then traded lower for the following 2 trading sessions on very low volume and followed through with significantly more accumulation volume yesterday. This is a classic 4 day rally attempt and success that has lead to some of the strongest and lasting rallies in history. Although there is no guarantee that this rally will be one of those great rallies, it has potential.
To ensure this rally's survival, the NASDAQ and leading stocks must continue to lead the market. The DOW and S&P 500 should follow through in the near future, adding to the overall market strength.
The NASDAQ July low of slightly below 2100 points and subsequent August retest of this low may prove to be the last time this index ever trades at these levels.
