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FFTY - I have two counts but prefer the bearish one

FFTY is an ETF with a basket of stocks following the IBD 50 index IBD favors companies that are generating outstanding profit growth, big sales increases, wide profit margins and a high return on equity. There are two ways to count this chart.

The first one is bullish shown below.

The problem with that count is wave ( 4 ) does not have A-B-C subdivision and got too low. In particular it retraced 76.4% of wave ( 3 ) up. The lowest wave ( 4 ) I am prepared top tolerate is 66.7% ( 2/3) retracement of the preceding rally in wave ( 3 ) up Then we should look at an alternative bearish count below.

FFTY - "Bullish" Daily chart updated on 3-02-2020

That count looks much more reasonable to me. We see a clean completed Five Wave Up fractal that topped at 38.79 in October 2019. Then the sharp drop into the Dec 2018 bottom that retraced 2/3 of the rally that started in 2016 was the first leg down in a macro corrective (A)-(B)-(C) down structure. The following rally topped in Feb 2020 and it failed to make a higher high!

Then we are left with the final move down in wave ( C ) down.

That ( C ) down is supposed to be subdivided into five waves down. And the February drop is only wave 1 down. We may expect a pullback in wave 2 up targeting 34 – 35 area before the next move down in wave 3 down.

FFTY - "Bearish" Daily chart updated on 3-02-2020

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