Please review this post from May; it summarizes key ingredients of an upside trend day. All of these were present in yesterday's session. This earlier post also provides a number of trend day signposts; see also this 2009 post.
In the chart above, I track yesterday's ES futures versus the number of stocks trading across all exchanges that are making fresh day session highs minus those making fresh day session lows. (Data were obtained via e-Signal). This is an interesting measure, as it begins tracking new highs/lows from the market open. For that reason, values tend to be elevated during the early minutes of trading relative to later in the day. During uptrend days, we see two things:
* The difference between new intraday highs and lows stays positive throughout the trading session;
* We get spikes in new highs well into the trading session, as a large proportion of stocks are trending.
Conversely, during rotational days, we'll see some stocks making fresh highs for the day session and some making fresh lows. As the market oscillates, the difference between intraday new highs and lows will cycle from positive to negative and back again.
Along with the indicators outlined in the above posts, the intraday new highs/lows give a good sense for whether there is a directional bias to the day's trade. With a bit of testing, relatively early in the session, we can identify the probability that we are operating in a trend environment or a rangebound one. This not only benefits daytraders, but also aids the entry and exit execution of longer timeframe participants.
Further Reading: Catching Trend Days in the Stock Market
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