[isatrader]

The IBD 50 Index (ticker: FFTY) is a good example of why it's been a challenging year for using the stage analysis method. As stage analysis tends to focus on leading growth stocks like what this index covers, which as you can see from this five year chart tend to underperform during Stage 1, 3 and 4 periods, but outperform strongly during a Stage 2 period. So I think this is a good index to add into the weight of evidence, as it gives some extra useful information about the state of the market. As we only want to be aggressively long during Stage 2 .