Wednesday, July 23, 2008
Quick Note On Follow Through Day
Investors Business Daily did not declare Tuesday a Follow Through Day. It did qualify under the original 1% rules, though. I conducted most of my studies using the old 1% rules. One primary reason is that moving the requiremnt to a 1.7% move, several large rallies would have been missed. There are a couple of things to note when the market puts in an “Original Follow Through Day” (OFTD) like today. First, based on the 64 OFTD’s I found in my study between 1971 and January of 2008, the expectation over the next week was positive. Second, however the market moved over course of the next week was a predictor of the success or failure of the FTD about 2/3 of the time. You may refer here for more details on these statistics.