On the surface it could be called a good day. Underneath, it is anything but. Here is my reasoning:
- Volume didn't edge out the day before. We could argue it's only day two of an attempted rally but it was options expiration on top of a fed cut. So if you take out the option expiration effect (about 25%), there was no real volume behind such a big point move. Especially after the beating the market has taken on heavy volume recently.
- Most leaders didn't even do average volume the last two days, and many ended below there mid points Friday on a supposedly strong day.
- There is almost nothing setup to the long side. Not typical at all of a market near a sustainable rally.
- Market has not been able to rally in the face of bad news. The last two days had the market rally on a Fed rate cut rumor(Thursday Afternoon), then an actual Fed rate cut(purported good news). We still need see how the market acts in the face of bad news.
The intuitions may finally be ready to take their summer breaks so the market should continue to drift upwards as we approach the end of August and Labor Day. But that's not a reason to be long unless for a trade. For now I see this as a better setup to find shorts then longs.
Just my opinion, I could be wrong, but I don't believe so.