This is one of those terms (FTD) that throw people for a loop when they hear it. Most think that it means it is time to go into the market buying stocks. However, a FTD has to be accompanied by a few things to be a real FTD for me. First the selloff must lead into the FTD on low volume. We did not have low volume on the pullback this year. Second when I see a FTD the first thing I look for is the explosion in volume. How much volume was in on the FTD? Today, it was around a 16% to 18% increase in the indexes and while that is close to what I look for, it was no where near the 20% increase in volume that I like to see.

For a perfect example of what I am talking about go back to 2003 and take a look at that FTD. The volume was huge and the price gains were enormous following a lower volume selloff. We do not have that this time and the fact that medical stocks are still the only stocks leading has me still not convinced we have a real follow through day here. Even if we do there will be plenty of time to jump on the bandwaggon and make a lot of money. Just study my 2003 and 2000 winners before the top. They showed up well past the initial follow-through day and still made me and a few investors very wealthy. It will happen again. Trust me. So if this is for real we will have plenty of time to get involved. And as you subscribers know I will be in the stocks that will be moving the most during the next bullish phase of this market.

The best news about all of this is watching oil come in. I am so happy for the rest of us that oil can continue to pullback and the fact that the charts look like they have definitely topped and that nothing is going to help them rise again. Many of us were able to profit on the bull market in oil stocks but it finally appears to be over. That is good news, not bad. Oil has fallen, I bliever, 25 points to $122.

If there is a chance we have seen a bottom it could in fact happen. We have had mutliple weeks of newsletter writers coming in with a bearish viewpoint than a bullish viewpoint. I believe it is seven weeks in a row according to IBD. That is a very long time for these usual perma-bulls to be bearish.

And this is so important that I am taking it straight out of IBD to show you exactly how bad it is. This is from today’s IBD’s Big Picture: Also, 15% of stocks in IBD’s database own Accumulation/Distribution Ratings of E, the worst possible grade. Typically you want to see that figure above 8% at the time of a follow-through, as it’s a sign of severe investor pessimism.

Remember one important tenet of follow-through days: Every bull market in Wall Street history started with a follow-through. But not every follow-through launches a new bull market.

This is just confirmation of my analysis that is trying to make sure that you do not do anything stupid and get too bullish too soon.