FAZ gone wild?
The daily chart shows the rise and fall and rise and fall and rise since July 7, 2011
3:27 pm (Hawaii) Sure enough, FAZ price is moving. No, I didn't expect this kind of swing so quickly, but then Helicopter Ben underwhelmed the market yesterday and that just juiced up the USS FAZapalooza to warp speed. Though I contend that FAZ is due to break through recent highs of 73 and 81 en route to 100, there will surely be dips along the way. Or not. I'm not banking on anything, back in all cash after selling my position today.
So FAZ broke through the near-term trendline of the megaphone pattern of the chart. Had Bernanke decided to print, print, print, FAZ would've broken support and tanked. FAZ would've been at 50, maybe 45 or 40 by now. Instead, the market took an instant shave and kept that razor humming through yesterday's finish and all through today ... until the late rally that lifted the Dow from -500 plus points to -389.
FAZ is now above the recent trendline/resistance and sitting above it. Is 66-68 the new support level? Maybe. But the market is due for a bounce, no matter that we're in a bear market right now. This much selling will be eventually met with buying. The buying may lack conviction, but it will come. That will push FAZ lower and I'll be interested in scaling in again. 68 would be nice, but after all that volume today, it may stay above 70 and meander for a few days while the market tries to figure out what the hell happened this week. As long as hedge funds stay out of bankster stocks, they will continue to tread water and/or sink toward the bottom.
Tomorrow should be a great opportunity for perennial bulls to wade into the water and start new positions. A big rally wouldn't be surprising. The bigger, the better. FAZ at 65 again would be pleasing. Anything lower would be a gift.