Fas/faz - 5/4

Discussion in 'ETFs' started by scot.mcpherson, May 4, 2009.

  1. Ah shit, I was looking at FAS when I made that remark.

    So EKO had a good plan.
    #11     May 4, 2009
  2. I sometimes hold FAZ overnight or take quick gains. I just think the financials have over extended and now becoming expensive on pure analysis. So I think the FAZ can make good money on the pull back. I'm trying to build a position on the SKF and the FAZ. What do you guyz think?

    P.S. I also gotta keep in mind that the market can stay irrational than I can stay solvent
    #12     May 4, 2009
  3. I was wondering what you were looking at when you said buy at 8.50.

    S&P 900 looks to be insight. what's next?
    #13     May 4, 2009
  4. The P.S. is key.

    My opinion is that these 3xerz have such good percentage swings that it's not necessary to call tops/bottms.

    Instead, it makes more sense to me to wait for an intermediate term trend, as in 2-3 hrs, to make a decision to go long/short.

    Then as it trends in my direction - hopefully - I switch to a longer term chart, as in 5-7 hrs, to make a decision to hold overnight or not, while still using the midterm for an exit point near EOD.
    #14     May 4, 2009
  5. I think its a good plan so long as timing is right, with each day FAZ loses the potential to gain a crap ton. Sure if the market pulls back hardcore, you could make 50% or maybe even 100% IF you timed it right and got a good price, otherwise as the baseline of FAZ continues to fall, you lose the potential profits because eventually that theoretical peak in FAZ will be less than what you paid for. That's why its a serious short term holder.

    Please keep in mind even the perspectus for FAS/FAZ ETFs say literally that this ETF is for day traders or short term swing traders only. And it is right.

    Yes I remember when FAZ hit 150, but it was already 71 at its previous low. It hit 88 in january, but its previous low before then was in the 40s, when the march 6th market bottom hit we got back into the 100s with FAZ, but the previous lows again were in the 50s. So you can see there is little chance for making it "lucky".

    If you buy FAZ today, and the price goes down to a baseline $4 for instance, you'll be lucky if you even get you original investment back during the next serious downturn.

    Buy it on the lows, and sell it at THE NEXT HIGH, don't hold out for a better high, it "could" happen but is not likely.
    #15     May 4, 2009
  6. Yeah, I confused myself, since I'm still looking at FAS. I generally look at FAS, cuz I also watch ES, and so they "synch", and it's easier to see HH,LL when they're in unison, and see any divergences like ES making a HH, but FAS making a LH.

    Then, if I take a FAZ position, I switch to a FAZ chart.

    But the statement holds true. If FAS was to make a LH around 8.50, then I'd take the inverse postion - FAZ.
    #16     May 4, 2009

  7. Good word.
    #17     May 4, 2009
  8. I see a potential repeat of last wednesday occuring. Very similar pattern.

    The market has really been strange the couple weeks.

    The market is pulling another rabbit about of its hat and getting another HH when it should be pulling back down to set the week up.
    #18     May 4, 2009
  9. This is what i was looking for, and what i was trying to show with the black lines earlier..

    A LH on the mid-term chart.

    With VIX and TRIN edging up again.

    So I took a 1/2 size in FAZ.
    #19     May 4, 2009
  10. chart
    #20     May 4, 2009