FAZ daily: The spotty nature of this wild 3x ETF can seem
untouchable, but I feel comfortable with my pennants and megaphones.
FAZ daily: Volume today was middling after back-to-back
monster trading sessions. Lower volume, lower price.
I smell a bounce coming soon.
12:05 pm (Hawaii) I should've walked away after the half. This morning, I devoured FAZ with my eyes, watching practically every tick with glee as it ran higher, around every obstacle like Walter Payton in his prime. (Come to think of it, Payton was great even in his later years.) By mid-day, FAZ was pulling back in a backbreaking way off that intraday top and I was content. No I wasn't. I ended up trying quick trades in AAPL and FAZ. Got in AAPL at 379.00, stopped myself out at 377.30. Got in FAZ at 68.00, got out at 67.25. Got in AAPL again at 379, stopped myself out at 377.50. Three small loses, but it feels like I keep nicking myself to death with paper cuts.
What this amounts to is this: 1. My focus is so narrow, I won't even try other issues that traded higher today like AGQ and DGP, and 2. I was up all night, not by plan, and I can't remember the last time I had a profitable day after staying up all night. The market begins here at 2 am with peon premarket trading. The opening bell is 3:30 am Hawaii time. I wasn't sleepy, so that wasn't an issue. But I have to wonder if my decision later in the day (after 7:30 am here, 1:30 Eastern) was affected by fatigue.
I wound up trying too hard. Had I just held my AAPL position, I'd be at almost break even. It's trading at 378.64 after ours. In fact, I could've just held AAPL since yesterday when I entered at 372+, but I got out at 371+. And the day before, I sold FAZ at 66, and it ran to 81 on Tuesday. My timing is off by 24 hours. But after today's sloppy little mess, I started to realize that the fear that has me stopping out is taking too strong a place in my strategy. Fear can be good, but not if it rules over other factors. I anticipated a selloff in AAPL going into the closing bell, and it never really got very big, sliding from 379+ to 377+ (where I sold).
That just shows me fear is a few percentage points too big in my process. I did get some good news when I saw FAZ sell off during the market rally. FAZ dipped to a 62.99 low for the day, and it's at 64.99 afterhours. I wanted a chance to get some at 65, but the technicals are dissuading me. See, I wrote yesterday that when FAZ's white/green long candlestick is matched or dwarfed by a longer black/red candlestick the following day, a downtrend over several days has occurred EIGHT times out of the last EIGHT scenarios. For most of today, FAZ was in the green, between 1 and 3% up, and it looked like that scenario was out of the picture.
It was not to be. FAZ is down 2.4% today, and a few days of trading in the lower 60s is probable, headline risk not included. FAZ at 65-66 is sitting right on the megaphone trendline. From here, it could go to 81 again or drop to 55 (or below) first. But I remain certain that FAZ goes to 100 in time. I won't pretend to guess when. That wouldn't help my trading one bit.
Still more than 90 minutes left in afterhours trading, but I'm leaning toward staying out. With the Nasdaq +2.3%, AAPL wasn't much of a mover overall today (+1.6%) though it was explosive at times. The underwhelming response to the updated iPhone won't help once the momentum runs out of steam. FAZ is well off yesterday's high of 81+, but I don't want to be caught holding a bag of it if or when they start printing Euros by the trillions or billions overnight one of these days. When that happens, gold will rocket higher, so perhaps a little paper gold (DGP) and a little FAZ here (65) wouldn't be so bad.
A possible blueprint: longer term position, scale in at 60 and 55. Shorter term. trade between the trendlines. Why 55? That's where FAZ bottomed the last time it rose to 81.
Update 1:48 pm Scaled back into FAZ afterhours just above 65. Hoping to add more at 60 and 55, but if 63-65 is the new floor, I'm ready. Sorta.