The Financials: FAS vs. FAZ
The fight between FAS and FAZ is one of the hottest ones going on right now. With that in mind, I thought the battle was worth its own thread. So let's discuss financials here! :)
I found the following article fascinating. If you're interested in the financials ETFs the entire article (a fairly long one) is well worth the read.
http://www.dailymarkets.com/stocks/2...ulls-vs-bears/
"...but for now, just absord the fact that each intersection the RSI and the FS%K creates, it is either a buy or a sell. If the FS%K is moving ABOVE the RSI, it’s a buy; if the FS%K is moving BELOW the RSI, it’s a sell. Below is a list of times, dates, and average candle prices for timed, majorly connected FAS/FAZ trades:- 10:30am, 2-5-09: FAS buy @ $8.05, FAZ sell @ $57.02
- 2:45pm, 2-5-09: FAS sell @ $9.45, FAZ buy @ $47.82
- 1:30pm, 2-9-09: FAS sell @ $11.26, FAZ buy @ $38.78
- 3:45pm, 2-10-09: FAS buy @ $8.22, FAZ sell @ $49.45
- 1:00pm, 2-11-09: FAS sell @ $8.81, FAZ buy @ $45.09
- 2:15pm, 2-11-09: FAS buy @ $8.44, FAZ sell @ $47.40
- 3:45pm, 2-11-09: FAS sell @ $8.84 (pre-close sell)
- 9:30am, 2-12-09: FAZ buy @ $47.88 (off-the-open buy)
- 3:00pm, 2-12-09: FAS buy @ $7.61, FAZ sell @ $50.42
- 11:00am, 2-13-09: FAS sell @ $8.38, FAZ buy @ $46.79
From here, the indicators didn’t signal anymore trades. The purple trade (#2) was an indicator head fake, for FAS shouldn’t have been sold and no way should FAZ have been bought. If you would have analyzed the charts prior to using indicators, however, you would have realized this and not relied on the indicator to trade for you in this situation. Using these indicators with your volume spikes and your price comparisons, you could have made a ton of money off of FAS and FAZ in this 10-Day time span.
As for the beginning of next week, weekend news will no doubt play a significant role as to how Tuesday’s open will trend. For now, I would use FAS’ descending triangle pattern and FAZ’s ascending triangle pattern in order to have somewhat of a backbone to trade off of in relation to this deadly ETF/iETF combination.
Hope this helps you on your journey to tearing up the market and not letting it tear up you.
UPDATE: The link seen below is a mock $100,000 trading portfolio that backtested the RSI-%K Trading Strategy for FAS and FAZ. The Trading Strategy itself is still in the works, but it took in some nice profits through the 10 Day time span discussed above:
http://spreadsheets.google.com/pub?key=peX30LFa4TaQ3ikIlqwTtMw
"
Lady
Re: The Financials: FAS vs. FAZ
Wow, there's a big old head and shoulders pattern on that FAS chart. It's a small pattern (time-wise) but it looks bearish. H&S target is about $3.50
Re: The Financials: FAS vs. FAZ
FAZ, the financial 3x bear, has just been going nuts the last couple of months. Doubling its worth and then some. So what happens to FAS and FAZ if (when...) the government nationalizes the banks?
IMHO the most likely scenario is that FAZ keeps climbing gradually higher as the banks are slowly absorbed into the government system with bail-outs in exchange for preferred stock options.
But if a second scenario materializes, what happens to FAS and FAZ then? This is not a rhetorical question. I'd really love to get your opinions! What do you think?
Lady
Re: The Financials: FAS vs. FAZ
Quote:
Originally Posted by
etftalk
Wow, there's a big old head and shoulders pattern on that FAS chart. It's a small pattern (time-wise) but it looks bearish. H&S target is about $3.50
FYI, FAS was 7.93 when I wrote that a week ago, and yesterday the low was 3.92. I love when technical analysis works.
Re: The Financials: FAS vs. FAZ
Quote:
Originally Posted by
XL-entLady
But if a second scenario materializes, what happens to FAS and FAZ then? This is not a rhetorical question. I'd really love to get your opinions! What do you think?
I won't venure a guess since I am not sure what happens when the gov't owns the stock.
But did anyone hear Cramer yesterday saying something to the affect of; those who buy ETF's like SKF (short financials) are a big part of the problem and the SEC should stop these short funds?
Re: The Financials: FAS vs. FAZ
Morning Lady. "nother question. FS%K? What's that? Haven't run across that indicator before? is it only available on your paid StockCharts site?
Re: The Financials: FAS vs. FAZ
Quote:
Originally Posted by
alevin
Morning Lady. "nother question. FS%K? What's that? Haven't run across that indicator before? is it only available on your paid StockCharts site?
That one doesn't ring a bell. There is a K line in Stochastics, but the FS part ....:confused: Where did you see the indicator?
Lady
Re: The Financials: FAS vs. FAZ
Quote:
Originally Posted by
XL-entLady
"...but for now, just absord the fact that each intersection the RSI and
the FS%K creates, it is either a buy or a sell. If
the FS%K is moving ABOVE the RSI, it’s a buy; if
the FS%K is moving BELOW the RSI, it’s a sell.
UPDATE: The link seen below is a mock $100,000 trading portfolio that backtested the RSI
-%K Trading Strategy for FAS and FAZ. The Trading Strategy itself is still in the works, but it took in some nice profits through the 10 Day time span discussed above:
http://spreadsheets.google.com/pub?key=peX30LFa4TaQ3ikIlqwTtMw
"
Lady
OK, I got it now, I think. The shorthand in your article was too cryptic. :embarrest: Second question. I don't know how to put RSI and Fast-Sto on the same chart, can I just look at them same time on separate charts and see what he's talking about?
Re: The Financials: FAS vs. FAZ
Quote:
Originally Posted by
alevin
OK, I got it now, I think. The shorthand in your article was too cryptic. :embarrest: Second question. I don't know how to put RSI and Fast-Sto on the same chart, can I just look at them same time on separate charts and see what he's talking about?
Okay, I see where your question is coming from now. I think this guy uses TradeStation, which allows you to make your own blended oscillators on the charts.
In order to get the same effect, I use StochRSI on stockcharts.com. I can't remember if that is an option I had before I started paying for the stockcharts upgrade or not. But it's an indicator that I really love, and it would keep me out of trouble more often if I'd use it like I'm supposed to!
And if you don't have the StochRSI option, you can just put RSI and Fast-Sto on the same chart and use the information that way. Let me know what you think, okay? :)
Lady
Re: The Financials: FAS vs. FAZ
Today's action in FAS/FAZ was interesting to watch. In case your wondering, the wify has friends in from out of town, so I'm hiding in my room (translation, too much time on my computer.)
FAS Financial Bull 3x 4.02+0.29(+7.67%)
FAZ Financial Bear 3x 56.09-5.41(-8.80%)
Here is an unweighted look at today's closes
http://i138.photobucket.com/albums/q...untitled-5.png