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03
Jul
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When Thursday’s rise in FAZ, after a close at 5.14, looked to have topped out after hours at 5.22, I sold out:
The financials dipped from a close at XLF = 11.47 to 11.37, then rose slowly back to 11.40:
This activity took XLF near the bottom of a zone of strong support that was resistance until two months ago. XLF’s 20-hour and 20-day lower Bollinger Band are also supporting:
XLF has a history of reversing sharply in after-hours and pre-market trading, especially over weekends (not all reversals shown above). This strong tendency to reverse after the close and before the next open is also evident with FAZ:
Sure, the charts don’t necessarily preclude a possibility of continued downside for financials and gains for FAZ, because, as Idan’s videos pointed out, if XLF does drop thru that support zone, it could really plunge from there. However, if a right shoulder is indeed under construction, it is reasonable to expect a bit more chop here before a plunge thru the neckline (located approximately in the support zone), although XLF’s chart might be more appropriately seen as a nearly completed inverted (bearish) cup and handle (a legitimate chart pattern — google it sometime), which could soon head down without much chop.
Anyway, I have been doing better by trading in extended hours, where cheaper buys and higher sells are often available than in normal market hours.
UNERS, im much more conservative with targets and i said id bail on FAZ above $5 but the target for me is the UPPER BB in $5.40 range. of course it may not make it there but if hit 880 on the SPX as my chart in photos suggests im hoping FAZ will see at least $5.40.
you have a great record in trading FAZ and you should not fret over missing the top or the bottom. the key is making more profitable trades and knowing when to limit losses.
hope you had a fun holiday. it must be a somewhat somber independence day for many Americans as it seems, looking from the outside, freedoms are being stripped everyday.
THIS IS THE MOST BIZARRE THING IVE READ SINCE THE CRISIS WAS RECOGNIZED BY THE MEDIA: http://www.cnbc.com/id/31685244/site/14081545 … the reason i say the crisis “was recognized” and not “begun” is because it is hard to pinpoint the beginning of the end of the life we once knew. if i gave you $10 and then you offered that $10 as collateral to me for a $12.50 loan to get a pretty flowery shirt…. i’d tell you to suck yourself and find yourself a $10 shirt! these ideas have went from bad to worse to ludicrous. best of all these loans must be financed by the ever solvent Freddie and Fannie. aka bottomless pits.
July 4th, 2009 at 9:40 am
I trade FAZ based on HOURLY charts. Look at the FAZ 60-min chart at bottom above and compare Friday’s action with so many other closes after nice pops, especially those that abused the upper 60-min BB and drove the 60-min RSI(14) above 70 or even near it. All those red dotted lines on that chart mark places where the best move in 90-95% of such situations was to sell into an after-hours top or a continuing rise in pre-market the next trading day, so based on this empirical evidence, the odds were about 10 or 20 to 1 that selling the resisted after-hours peak in FAZ (top chart above) was the right move, or at least a very good move. I’m a tournament bridge player who also taught grad courses in application of statistics and probability to financial situations. Therefore I know that determining the action that the odds strongly favor may not win the max with every single hand or business decision, but it’s what you do to win the game.
One reason I prefer trading stocks to playing cards, especially poker, is that everybody wins who has even a decent hand, and plays it even halfway right. Second best is a poker player’s nightmare, but it pays off big with stocks. Also, a trader who has backed what is turning out to be a loser can usually drag most of the bankroll back out of the pot before the mice get at it.
July 4th, 2009 at 10:03 am
Amazingly, CNBS actually put a link to a bear’s thoughts on that page:
http://www.cnbc.com/id/30192550
I’m out of FAZ until after the 10-1 reverse split this week…..
http://www.reuters.com/article/marketsNews/idUSN0518022220090705?pageNumber=1&virtualBrandChannel=11569
Uggh. It never gets any easier does it? Well I may be crazy but I’m holding onto FAZ.
First though I want to thank Uners for these terrific charts. First rate work my main man. First rate.
There’s just too many damn conflicting signals. Yes, the charts say with all the sup lines we should get a bounce. That’s logical. BUT, the elliot waves say we could be starting wave 3, and if that’s true, then we are going to cut through those res lines like shit through a goose. So I guess I’m [placing my bet that this is wave 3.
A prudent course of action might be to take half my position off on Mon morning. But I’m not known for prudence.
This is not trading advice. Do your own research and make your own decision. I take no responsibility for any trade or investment decision you make.
July 5th, 2009 at 10:08 pm
GBT , im thinking the FAZ water is warm and there will plenty of wiggles and squiggles along the road lower. holding it through this OPEX and beyond is probably a good play. im looking for a move above the upper BB on my daily chart