Read the following excerpt from Investors Business Daily:
“You hear it so much, it’s almost become the naysayer’s mantra: “You can’t time the market.” Short and punchy? Sure. And also completely false. The market’s price-and-volume action gives clear signs of the market’s direction. A follow-through day gives you the biggest of head starts — timing the market’s bottom. A follow-through occurs at the earliest stages of a fledgling rally. After a significant market correction, the market will look to regain its footing. Any up day then counts as Day 1 of an attempted rally. The next two sessions, Days 2 and 3, don’t need to show much in the way of gains. As long as they don’t undercut Day 1’s low, the rally remains intact. For a follow-through to occur, you want it to land between Day 4 and Day 7 of the attempted rally. On any one of those days, you’re looking for one or more of the major indexes — the Nasdaq, S&P 500 or Dow — to rise 1.7% or more in higher volume than the previous day.”
Jonah Keri, Investor’s Business Daily
All Major Bull Rallies Begin With A Follow-Through Day
Tuesday July 27, 7:00 pm ET
You will never hear a trend follower speak like this. If someone tells you he can “time the bottom”, reach and check to see if you still have your wallet.