Hello travel traders
Good morning from Hyderabad India. Nov 6th is a big day for the USA. it is sunny at about 10:00 am here.
Part 1 can be found here
FFTY is the growth stocks ETF. It is passively managed fund and tracks the IBD 50 – The best growth stocks in the market. the holdings are updated weekly
you see, Growth stocks break down about 2 – 2 1/2 times that of market. as the market is falling they hold up well for 3-4 days and are resilient. But they start collapsing the faster as the bear market sets in. Why? because market drops 4 times faster then it goes up – because markets climb the wall of worry and fall of the cliff.
Look at the bearish engulfing candle stick pattern at the tops – a solid red candle after a small green one.
Along with $S5FI this is a reliable portent.
For market bottoms Growth stocks are first to break out after a follow through day.
Follow-through signals are more likely to fail if distribution days occur in the first few days of a new uptrend. This is one key red flag. A distribution day, which points to institutional selling, involves a drop of 0.2% or more in the Nasdaq or the S&P 500 in higher volume.
Generally, a distribution day within a few days of a follow-through leads to a failed rally. The risk drops off sharply after the fifth day.
A second red flag? In the early stages of a new uptrend, strong action among leading stocks is crucial. Top-rated stocks should be breaking out of bases in big volume. This is a clear sign that professional investors are stepping back in to buy stocks.
have a wonderful day and please vote!