Market Breakout – We Need Follow Through

We've seen these breakouts before. Here's how to tell if it is real.

PRE-OPEN MARKET COMMENTS THURSDAY – The reaction to the FOMC statement felt great. The market broke through a major downtrend line on a daily chart. We need to see follow through buying the rest of the week or we will fall back below it. Traders who bought the breakout will be flushed out if this happens and that will accelerate the selling pressure. I did not see anything new in the FOMC statement. The Fed said that they are close to decelerating the pace. We already know that (50 basis points in Sept and 25 the remaining two sessions of the year). I believe that much of the momentum was program driven and those moves can easily be erased.

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