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Funds Signal Support

Hey Market Pilot,

An exchange traded fund (ETF) that I like to keep tabs on is the IBD 50 (FFTY). Part of the reason I follow it is because it moves in a similar fashion to the Russell 2000 ETF (IWM). When trading, we could use all the clues we can get our hands on. 

Back around August, I made a specific video for the Moxie Indicator™ subscribers about one particular clue I was seeing in the FFTY. That ETF started to shape up, test support, and move strongly before the IWM. I studied it and brought what I had deduced to the subscribers so they could watch along with me to see if the pattern played out.

What I had witnessed was my typical setup that I teach all the time of price coming down and testing moving average (MA) support. In the screenshot below you can see the FFTY daily on the right where it tests the 50 simple moving average (SMA) — where I drew the arrow. The IWM is on the left and basically did the same thing which was what we were looking for.

After that test, the FFTY quickly shot up and jumped outside of its third average true range (ATR). The IWM is currently doing the same. After a few days of back-and-forth, the FFTY had a sharp pullback to below the daily 50 SMA. I don’t know if the IWM will pullback that much or not, but if the similarities continue, we should expect a stiff pullback in one form or another. That pullback should be into support and buyable.

So keep a lookout for it, and be ready for both the drop and the pop.

Your Profit Pilot, TG

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