December 5, 2010
Hello and Happy Holidays Robert,
We have been as clear as possible in the reports concerning the characteristics of the market's rally attempt. You may call the coverage ambiguous, but I believe that is simply a consequence of the fact we are telling it as precisely as it can be told. When the latest pullback was termed a "correction" we had not initially labeled it as such in the CANSLIM.net commentary, but after the paper called it a correction we went forward looking at it as such and we were watching for a follow through day. Wednesday this week appeared to be a follow through day but we pointed out its shortcoming was volume.
The paper initially said that it was not a follow through day, but by the end of the week IBD changed the Market Outlook to "Confirmed Uptrend".... without having had a "follow through day" (by strict definition). From this weekend's newspaper:
"The market has been showing strength lately on a number of fronts. Given those facts and the new high on Friday, the market has resumed its uptrend, even if the classic sign of a bottom has eluded the major indexes.
Market leaders generally have held up well, and a few breakouts have emerged. The number of new 52-week highs is robust. The IBD Mutual Fund Index — a proxy for hundreds of growth stocks — is making new highs.
Normally, IBD would look for a rally confirmation in the form of a follow-through. That's a big increase in at least one major index in higher volume as the index starts to advance.
That signal has yet to occur even as indexes hit or approach new highs. But the picture that has emerged is that of an ordinary market pullback, rather than a full-fledged correction.
The NYSE's 1.4% surge in higher trade Thursday indicated institutional buying. A wave of month-end trading late Tuesday skewed what otherwise would have been a clear follow-through on Wednesday."
To sum it up, the read on it now is that the last pullback was ordinary and not really a serious "correction", which could be argued to mean that looking for a follow-through day as a green light was not a requirement. That is why we have said - "Carefully manage your stock holdings on a case-by-case basis, with quick reflexes if selling becomes necessary, or if new buy candidates with all key criteria appear as action-worthy choices."
Although we have reported at CANSLIM.net on the market action as thoroughly as we have over the years, many people have assumed that we were keeping statistics and tracking things which we were not explicitly tallying. I would suggest contacting the newspaper and seeing if they can provide the information you are looking for. I apologize for not getting an answer to you on that sooner, and for not being in the position to be able to provide the summary of dates you hoped to find.
Kenneth J. Gruneisen
Founder & Contributing Writer for CANSLIM.net