The Financials: FAS vs. FAZ

[JTH]

And so the saga continues

I'm watching FAS for an exit out of FAZ. For those holding FAZ in the 20s, I imagine life is looking pretty good right now. As for myself, I'm just looking objectively for a good exit.

Hourly Chart 16 days. If we can close below the solid green trendline, then I'll be voting for a gap fill and possible run to 5.40
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Looking at On Balance Volume. We have Lower Highs.
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Looking at the ADX trend strength. We have Lower Highs and have moved into the "choppy" area.
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[JTH]

I suppose I could hold on for another 20 years and let my kids use the money to pay off the debt the government has passed onto them?

Ugly, ugly, ugly chart...

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[etftalk]

FAZ closed at the high of the day. Good sign (for the bears)

[Gumby]

FAZ closed at the high of the day. Good sign (for the bears)

Go Bears!

[JTH]

So some folks let go of their FAZ this morning. I can't say I blame them, it's been on the wrong side of the trade since the 666

[etftalk]

Financials are actually lagging now. Probably a good time to short (now that I sold FAZ).

There is that strong positive seasonality for Thursday (pre-Good Friday) and a negative bias for Monday (post Easter). That said, I'm not a big fan of using seasonality right now. The other market forces are too great.

I'd like to see how the market opens on Monday, but if we rally today and / or Thursday, I might start getting short again for Monday. The greed in me hates to miss a gap down open - if that is what we get. I don't mind missing a gap higher because I think it would be short-lived.

[XL-entLady]

I knew the math was bad. I didn't know it was this bad.

"Much has been written about the math behind leveraged ETFs and mutual funds, yet most investors fail to realize the true impact. ....For this example, I have chosen two inversely related leveraged funds: Direxion Financial Bull 3x Shares (NYSE: FAS) and Direxion Financial Bear 3x Shares (NYSE: FAZ). The chart below illustrates the returns for the five-month period from 11/6/2008 through 4/6/2009 for the following four scenarios:

1. Green Line: Buy and hold FAS = -86.3%
2. Red Line: Buy and hold FAZ = -76.9%
3. Yellow Line: Buy and hold equal amounts of FAS and FAZ with no rebalancing (what some might consider a perfect hedge) = -81.6%
4. Cyan Line: Buy equal amounts of FAS and FAZ and rebalance every day (a lot of work) = -25.0% (not counting transaction fees and slippage)

"

http://www.greenfaucet.com/technical...x-impact/46093

Lady

[JTH]

Thanks Lady, I hadn't realized just how bad it was until I saw your chart and did some price performance back testing myself just to confirm.

It should be about criminal what is happening.

Today's price performance.
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Last 10 days
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[XL-entLady]

One of my all-time favorite blogspots is "Slope of Hope" and today I felt his pain when he said, "I am not touching FAZ again...........ever.........."

http://www.slopeofhope.com/

Lady

[JTH]

One of my all-time favorite blogspots is "Slope of Hope" and today I felt his pain when he said, "I am not touching FAZ again...........ever.........."

http://www.slopeofhope.com/

Lady

I have no problems with FAZ as a short-term trade only. But it sure does have to be watched closely and/or have stops in place.