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: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.
- 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
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
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Lady