Mark Gordon looks at the health of the new rally that began on June 2nd 2010. The markets began their first day of an "attempted rally" on May 25th when the Nasdaq reversed and closed 3.3% off its lows for the day. On Day 2 the Nasdaq finished lower, but on Day 3 the index jumped 3.7% but the move came a day too soon to be counted. We start looking for "confirmation" on or after Day 4. Confirmation comes when a major index (Dow, Nasdaq, S&P 500) jumpes 1.7% or greater on a pickup in volume. This happened on Day 6 when the Nasdaq gained 2.6% on a slight increase in volume.

Today, Friday Jun 4th, the Nasdaq suffered a "distribution day" or a down day on a pickup in volume from the previous session. This is a sign that institutional investors are dumping stock and does not bode well for this fledgling rally. There are "monster" leaders like AAPL, BIDU, SNDK, NFLX that are holding up well however. This still gives us hope that this rally will take hold. The next few days and weeks will be telling.