Here's my take on follow through days from my many many years with them.
It is true that 70 - 80% of the time they are tradeable. When they fail, they do so quickly, and usually because they lack power from leaders. A good example was 8/6/07 and 6/30/06. In both cases you would have been presented with almost nothing to buy at or after the FT day. So just merely sticking to quality stocks would have kept you from committing alot of money. That's why if I see the FT and tons of breakouts follow, I don't fear loading the boat since most of the big mooses do come out early and I want to be on the train. If the breakouts don't follow, then I am very quick to sell any laggards right away, and leaders right after.
This is not a fat pitch market. Without my experience I would not want to be involved here either with the insane volatility. But, I know what I'm up against and how much I am exposed for, so I don't fear it. Trust thyself.
It is touch and go here, but so far the leaders have not come under major distribution. They have reacted accordingly to a volatile market, but have lacked volume to the downside. Which makes me believe this rally may have some more legs to it. There are quality stocks that are completing their 7th week of a base, pulling back to pivots, and other that need a little more time. If what we've seen is only a shakeout, then the shakeout may have served its intended purpose and could give longer life to the rally.
I did sell all my laggards going into the FED, but there was no where to hide on Tuesday. If you're in a winner, you