Thursday, October 13, 2011

DCA FAZ? (updated 1032 am HST)

5:12 am (Hawaii) Sure I thought about it yesterday. After three days of buying FAZ late in the session, why stop yesterday? FAZ was cheaper than it's been in weeks. Six of the seven previous sessions had FAZ much, much lower, below 49 intraday yesterday. But I expected JPM to knock it out of the park with their earnings report this morning.

Another late night at work. I get to be right away, around midnight. I never thought to set the alarm for 1:00 am Hawaii time and hear about JPM's announcement. They missed? Are you kidding? That set the stage for FAZ, which had closed just below 51 yesterday. FAZ popped in premarket (2:00 am HST) to 52+. I was sound asleep. Otherwise, I would've opened a position.

So I just got up and now FAZ is at 55+ even after a minor selloff. This turn of events is really shocking. Not only did it give FAZ the push and fuel it needed to gap up today, it gives the price a desperately needed bounce on the technicals. I can't say the chart "never lies" but in this case, this was due, even though I saw a real possibility of FAZ going to much lower support levels. One way to beat price gyrations is to add shares without timing, just dollar cost average. Sounds crazy with a 3x monster like FAZ, but buying at 50 and 55 will probably turn into a nice profit eventually. Waiting for 37 (one-year low) might not work as well.

FAZ is up 9% already today. The Dow is down well over 100 points. Not the optimum time to step in but it won't get a whole lot cheaper. Might wait for East Coast lunch hour to see how FAZ trades next. FAS vs FAZ today is a first round knocktout. I never would've thunk it. JPM went down for the count. Could there be a surprise in the financials the next week or two with more earnings reports? Doesn't seem likely, does it?

Holding my nose as I enter small...

Update 5:28 am FAZ at 55.40 level. A Fib retracement of this morning's gain would bring FAZ down to 54.04. That's a 38.2% drop. I don't expect more than that. Other stocks might pull back 50% or 61.8% or more. FAZ? Nope.

Update 5:32 am I'm looking a little more at this morning's action in FAZ. How the hell did it stay below 53 until after the opening bell? It was as low as 52.30 about 20 minutes before the bell. That's not bad, a 2% gain over yesterday's close, but really. I'm still all cash, watching FAZ dip slowly. Waiting for 54.04. Not expecting it, but it's near lunch hour and sometimes opportunity enters.

Update 5:45 am Still not in FAZ. Still being patient. Waiting for opportunity. FAZ wouldn't dip below 54.32 on an earlier, small selloff, so why would it drop to 54.04 or so? Just hoping lunch hour does the trick. I've written countless times that FAZ will go to 100 given all the realities of this effed up monetary system. I just thought it might dip to 55, 50, 44 or even 42 first. I guess the high 48s was as low as it goes. Still wondering if there's any trickeration left in the banksters' sleeves.

1-minute chart with a bunch of uncertainty at 55.15.

Update 5:57 am String of indecision on the 5-minute candles starting at 11:25 am Eastern. FAZ now at 55.10. Still waiting.

Update 6:32 am Still waiting, though at 12:33 pm Eastern, FAZ has moved back up to 55.50. HOD is 55.95 and a move above that will spur more buying as the Dow drops again, now -121. My preference for 54.04 is just fading hope.

FAZ 15-minute: retracement watch
From 51.11 (yesterday's close) to 55.95 (today's high).
I prefer an entry around 54.04 (Fib pullback).
After declining from 81 to sub 49 in seven sessions,
55-56 is probably a bargain. 

Update 6:42 am What a difference a day makes. Looks like financials shot their load yesterday after a massive one-week run. So far today? RBS -7.5%, JPM -6.5%, -DB -6.5%, C -6.2%, MS -6%, IRE -6%, BAC -6%, SCGLY -5.7%, AIG -4.9%, BBVA -4%, GS -3.7%, STD -1.4%, HBC -1.2%, NBG -0.4%. 

FAZ is at 55.45, +8.5%. 

Update 7:10 am Top of the hour to now, FAZ declining. Price is coming in toward my desired entry point. The speed of the drop is almost breathtaking though. Profit-taking yes. CNBC (Pisani) talking up JPM's increased Visa revenues may have factored in. Fib 38.2% retrace of today's gain: 54.04. A Fib 50% retrace: 53.53. Give or take a few cents.

FAZ 30-minute
54.04 entry? 
53.53 would be next

Update 7:46 am Buy order at 54.04 executed. Might regret this. Again, 50% retracement of today's gain in FAZ is 53.53 and a 61.8% retrace goes to 52.96.

Position is small, still debating whether to add at 53.53 if the opportunity is presented. Might just exit and wait for 52.96.

FAZ 30-minute
Added horizontal lines to clarify my Fib levels:
54.04, 53.53, 52.96.
Anything lower would be nicer.

Update 7:59 am FAZ rose to around 54.40, hovering lower now. Stop order is in at 54.14. If FAZ pulls back, I'll sell with a teeny profit and price would likely come back to my 54.04 entry point. Then I'd wait for 53.53 or 52.96.

Thought this was fitting. The Monopoly game is back at McDonald's. Banksters everywhere campaign.

Update 8:21 am Stopped out of FAZ at 54.07, break-even trade. Looking at 53.53 here (50% retracement of today's gain) for a re-entry point. Not setting a buy order yet, though. Definitely not looking at FAS. Today's news out of JPM casts a shadow over the sector's earning reports in the next week.

Update 8:49 am Plunge-o. FAZ falls through 54.04 and straight to 53.53. Not buying yet. Back up to 53.75. I'll wait this out a bit. A 50% retrace of today's gain might be a crucial pivot point. It touched 53.53 for just seconds before rising higher again. But if bankster stocks rally, these Fib levels won't matter. Ah, 52+ in premarket would've been sweet...

Update 8:55 am 
FAZ 30-minute
Bounced off 53.53ish level

Falling back to 53.53 level, then to 53.38 seconds later

Next Fib level to watch is 52.96. Anything below that and all bets are off for me. I'm all cash and I wouldn't touch FAZ if it sells off below that level. 

Update 9:06 am Dow rally, -11 now. FAZ plunges below 53. That was quick. Just watching here. How does JPM's failed numbers translate into a rally for the market and bankster stocks? Not looking for an answer. Just trying to stay ahead of the madness.

Update 9:08 am FAZ: stay out for awhile. Dropped to 52.62.

FAZ 30-minute
Giving up a majority of today's gain.
Funny money or not, the market is getting some PPT fuel
to save the banksters from further bleeding.
Or something very similar.

Update 9:26 am Back in FAZ, small position, at 54.00. The move from 52.62 to 54+ on strong volume was persuasive. Dow back to -57. Tight stop in place.

FAZ 30-minute
Fib level 52.96 sorta held after a dip to 52.62.
Stop in place.
Time for a break. 

Update 9:49 am Added more FAZ at 54.15 before I walked away for a few minutes. Moved my stop up, a little tighter.

Update 9:57 am Stopped out 53.60, small loss. Volume into the close fairly strong as FAZ declined a bit. Dow -39. Content to be all cash overnight.

Update 10:08 am So did FAZ hold Fib levels today? Yes and no. 54.04 didn't last. Neither did 53.53. 52.96 succumbed, but that was temporary and FAZ rode higher to 54.42. The dip going into the closing bell raises a few questions, but price is still above the 50% retracement level, which for me is slightly bullish for FAZ.

Is holding FAZ overnight through financials earnings season worth it? FAZ was at 51.11 yesterday, opened premarket at 52+, and ran to 55.95. Majority of the run came after premarket began even though it was King Kong JPM that disappointed. Waiting for premarket is probably the best method. On the other hand, FAZ had sold down six of the previous seven sessions, was at a recent low and was due for a bounce off 51 (or yesterday's intraday low below 49). At 53+, still bouncing?

FAZ 30-minute
Settling into a level that's slightly bullish.

Update 10:28 am Back in FAZ 54.42. Fitch putting some Euro banks on downgrade watch per CNBC. I'd like this position to stand through the next week and beyond on the way to 100, but I have no problem getting out on a move lower. These small losses in the 50s pale in comparison to an entry point below 50 (or 40) and a climb back to the high (81) or above.

Update 10:32 am CNBC: 7 global banks put on "ratings watch negative" by Fitch, including Goldman Sachs and Morgan Stanley in the US, BMP Paribas, Barclays, Credit Suisse and Deutche Bank in Euroland.

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