The NASDAQ Composite rallied yesterday after a weak opening to create yet another test for supply.  Volume was good, but not nearly as strong as the selling volume the previous day.

The breadth indicators were also not as strong, coming in at 1.24 to 1 compared to downside internals of nearly 3 to 1 the previous day. The second chart below of the S&P 1500 Market Weighted index shows the relationship between the two days. On Tuesday, the S&P 1500 recorded a three to one down day which was not matched to the upside on the bounce yesterday. You can also see that the total volume was much less. Just as we saw two days ago, with a test for supply we need to wait for the follow-through day to confirm the test. Monday’s test for supply was negated by Tuesday’s weakness as Monday’s candle was engulfed to the downside.

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