I found today's market action positive. I viewed the distribution day immediately following last week's follow through day as an end to that rally attempt, as something like 90% of the time rallies fail if they suffer a distribution day one of the first three days after a follow through day. I don't like those odds.
Therefore I started tracking the market anew last Thursday, when it began what I considered a new rally attempt. Based on that view, today was a follow through day on all three major indices.
I think there are some compelling reasons to market can mount a successful, if short term, rally now.
First, the election is over. For better or worse, the issue is decided and the market hates indecision. Now that we will know who we have in Washington, the market can get on with pricing the new establishment in.
Second, volatility has been steadily declining from it's historic levels. The market is calming down.
Third, the S&P 500 retook the 1,000 level - there could be psychological support here.
Finally, and probably most importantly, there are some quality stocks breaking out of decent bases this time. Worth watching is that most are related to the medical field - typically defensive - but that doesn't mean some money can't be made from them.
I had a nice candidate come up on my screen tonight and I'll have a look at it tomorrow. If it acts well and I can get in near the buy point (it would need to pull back some) I'll take a run at it.
-Geoff
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