Bulls Make Their Move

Recently we wrote that the market was at a critical point and that it almost had to do one of two things; either sell off as the trend reasserted itself, or break out on heavy volume. Today we witnessed the heavy volume breakout we had been waiting and hoping for. The bear trap likely captured its fair share of shorts today on the hard volume reversal. Trading conditions promise to vastly improve from this level as the market has finally revealed its hand. Follow through is important, but we would argue that this is a significant break in the downtrend and one that is likely to spur a strong recovery over coming months. This is still a rally that needs to build and create a base so don’t look for stocks to go straight up. Nevertheless this is we believe a significant technical event that offers the best promise we have seen in some time. Now then, let’s take this one day at a time. We have promise, now we desperately need follow through. All eyes will be on the bulls tomorrow.