O'Neil's specific definition of a market uptrend confirmation: a major index gaining 1.25%+ in higher volume than the prior day, occurring on day 4 or later of a rally attempt from a correction low.
Deeper Explanation
O'Neil developed the Follow-Through Day (FTD) concept from studying every major market bottom in the preceding century. His finding: every significant bull market began with an FTD within the first two weeks of the rally attempt. No FTD — no confirmed bull market; momentum investors should not buy aggressively. An FTD can fail — markets can pull back and require a new FTD — but every major bull market was preceded by at least one FTD. The FTD is the signal to begin deploying capital into momentum setups; the absence of an FTD is the signal to remain in cash regardless of how attractive individual stock setups appear.
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