FAS vs FAZ

11:32 am (Hawaii) Technical Knockout? Huge volume in both FAS and FAZ. Even with normal profit-taking, FAS is up 17% to 16.45, blasting through that 15.00 level. If the myth/lie can be perpetuated out of Euroland, FAS could rise into the 20s rapidly.

FAZ is barely able to hold above 35, which had been my hope for a new entry point. I'm waiting this out to see how the market reacts. Fuck theory and logic. If hedge funds and mutual funds pour in for Nov and Dec madness, it doesn't matter how smart or clever your theory is about the disintegration of the Fiat monetary system. Not until 2012, anyway.

FAS daily

Completely ripped through megaphone levels

without QE3, unless this Euro Bailout is the same.

15.00 was a possibility, now 25 is in the picture!

FAS daily

The first uptrend lasted 7 days.

The new one barely lasted 7 days, seemed ready

to dip on day 8 (yesterday) and has surged back

to the top of the current level. 

FAS daily

Major volume - short covering? - today.

FAZ daily

42 was the new thin ice. 

Now 35 is in play, new territory.

FAZ daily

Snapback action could be coming, but I'm not

inclined to bet against the banksters yet. 

FAZ daily

Currently below 1-year lows.

FAZ daily

Previous 1-year lows are history now

For a little more fun, a look at SPY.

SPY daily

Basically a clone of FAS daily, if less volatile.

SPY daily

As the EU turns, so does the days of our market.

Simple as ABC?

1:17 am (Hawaii) I like my little charts and trendlines and megaphone and pennant patterns. I like candlesticks too, however reliable (or not) they may be. But it's fun now and then to visit American Bulls for their view of stocks. Here's what they say through their candlestick analysis as of Wed Oct 19:

AAPL - Sell confirmed
AGQ - Sell confirmed
DGP - Sell confirmed
SPY - Sell-if...
QQQ - Sell-if...
QID - Buy confirmed
FCX - Wait
EUO - Buy confirmed

Isn't this interesting? All the indicators (at least in my book) of a bullish short-term view are negative, from AAPL to precious metals to bear indice ETFs. So how about financials?

FAS - Buy-if...
FAZ - Buy-if...

So that confirms the confusion and hesitancy of not just me, but of plenty of traders and investors regarding the banks. No surprise that the bank stocks remain choppy, range-bound and largely untouched lately. Or is that really the case?

BAC - Buy-if...
AIG - Sell-if...
C - Sell-if...
GS - Sell-if...
JPM - Buy-if...
MS -  Sell-if...

Less positive than I expected. I don't like the banksters, but even this is more bearish than I would've guessed just by the way they've held up through the past week with JPM and GS announcing far less stellar earnings than expected.

NBG - Wait
IRE - Wait
DB - Buy-if...

There are more Eurozone banks but that's enough. As I fall asleep for the night (and premarket opens in 30 minutes), I'm content to stay the heck out for today. The most bullish thing that could happen is Merkel and Sarkozy release the details of their grand plan to save the European monetary system. That would take the US market and precious metals higher since printing all that fiat money will be nothing but a short-term fix. Then the junkie becomes more dependent on the juice (fiat printing).

A little angry, a little ... sad?

5:08 pm (Hawaii) Horrid decisions here. AAPL ran to 421+ by the close after I bailed out at 419.07, doubting my initial thought that it would be bought up strong before the bell. Meanwhile, I entered FAS at 12.40, saw it run above 12.50, then failed to protect my gain and sold at 12.20. From there, FAS dipped a little more, then ran to 12.47 at the close. It's not the issue of losing $250 combined in these two trades — not a ton of capital. It's just my pathetic timing and lack of execution. 

All in all, a horrible final hour of decisions here and I feel as duped and foolish as I have in a long, long time. It wasn't just the final hour, but the entire week. I'd be in the right place, get decent entry point opportunities, but execute poorly on the front end (entry) and/or back end (exit). This weekend is a real pivotal time for me to decide whether I'm getting back to to pulling the trigger and protect my gains in this choppy market, or just stop trying to quick trade entirely. I'm getting nicked to death. 

It was the best week in the indices in a long time, and I had a terrible week. It doesn't matter what you think. It matters what you do. And I did badly. Case in point: I noted that holding FAZ (or FAS) overnight doesn't necessarily pay off because often the gap up is smaller than the gain during the trading session. FAZ was 51.11 at the close on Wednesday, opened on Thursday (premarket) above 52 and hit an intraday high of 55.95. Yet I bought in late Thursday and caught a $1.50 or so loss in the morning. 

This week, I was a trading version of a choking football team, driving to the 1-yard line most of the night, only to fumble or throw a pick almost every time. 

If I can't compete with an index ETF like SPY (up almost 5% this week), there's no point to trading this way. Or at all. Yet, if I had protected myself, let winners ride, my gains since last week would've beaten any index by far, ie AAPL from 379 to 422 would've been an 11.3% gain and FAS from 11.09 to 12.47 would've been +12.4%. 

I suspect I'm not the only trader who got chopped up this week, uncertain of market direction. Thing is, who gives a shit whether I agree with the direction? Just need to recognize it and go with it, not get spooked out. It starts with protecting gains and entering at proper (low) points. I did this a few times, but not quite enough. Being a hater of the banksters is fine and good, but I allowed this hate to cloud my vision of reality — that the market was bullish nearly every day, that Europe is about to print fiat currency to oblivion, and thus boost the markets at a rate we may never have witnessed before. 

Maybe Yoda is right. 

Fear is the path to the dark side.

Fear leads to anger.

Anger to hate.

Hate to suffering.

Not afraid I am. 

Bank run starting on BOA (aka DOA)? (updated 730 am HST)

2:38 am (Hawaii) Up through the night, got some work to get done, some fun stuff to get done and a can of Red Bull is in my system. Might need more... got the Orville Redenbacher popcorn and some mochi crunch and fukikake. This movie is a daily marathon and it's just starting for the day. Interesting to see both SPY and FAZ both up for a good 25 minutes or so after premarket opened (peon trading time, not the pre-premarket). But now FAZ is up and SPY is down. Dow futures were up, but on balance not pointing to a positive open.

Hard to read whether the late-day bounce yesterday is going to hold. But FAZ has already pushed above 68, sold off to 67.65 or so, and is back to 68.00 again. I'm leery of head fakes here. A lot of red on my Modified Trade X list: AAPL, AGQ, DZZ, ERY, FAS, QQQ, TLT, TVIX, UUP. The green: DGP, FAZ, FXP, TMV, TZA, YANG, ZSL. My focus, as usual, is FAZ.

YANG and FXP I learned about last night. They're 3x and 2x bear play ETFs on China.

Update 4:33 am Just doing some stuff, watching but not participating. Dow has bounced over and under break-even several times. FAZ was somewhat tradable from 66+ to 69+, back down to 66+ and now around 68.00. Market is basically flat with some fluctuation. Will 66+ hold again? If not, I might get those FAZ shares I covet at 65 or 60 or even 55.

FAZ intraday: little boxes getting work early in the day

I mentioned yesterday that the daily chart showed one trend over the past few months: long white/green candlesticks that are followed by long/longer black/red candlesticks have led to a temporary downtrend in the last eight instances. Doesn't guarantee anything here, but that fact does temper any enthusiasm I may have to jump in at this level without any catalyst on the horizon.

Update 4:47 am A fairly typical pennant forming on the early-session intraday chart for FAZ. I'm guessing this is common with opening-hour traders cooling off. The pennant normally leads to a break up or down, and in this case, FAZ just spurted higher, above 68.00 (not on chart).

FAZ 1-minute: Might just hit the sack.

No rhyme or reason to today's price action.

Update 6:05 am It's mid-day in the market and FAZ continues to stay in this pocket between 67 and 68+. Currently 68.39 (+2.6%) even though the indices are slightly up. My Debt Spiral list of banksters is 35% green, 59% red. The Euro banks are green and US banks are red, though none are down more than 3%, which is a pittance these days. 

PMs are also pushing up as of the last few minutes. AGQ is at 107 (+1.3%) and DGP is at 52.91 (+1.3%), and it still feels oddly interesting that PMs and FAZ are up together, like a nearly-forgotten memory. 

I drew up some megaphone patterns on the FAZ intraday chart for entertainment purposes, but the price seems to be holding in these areas. Stepping toward 69 since I took this pic of the intraday. 

FAZ 1-minute: Is 67.00 long gone already? 

Update 6:24 am Fascinating price action by FAZ as the Dow sold off from +36 to +13. FAZ left the lower megaphone to the next level and pierced yet another area before returning to a 69.15-69.30 point. It looks comfortable here. I could've entered at 67, 68, even 69. 

FAZ 1-minute: Holding in the megaphone patterns is extremely bullish

but highly susceptible to an avalanche

Update 6:42 am The entertainment value is immense watching FAZ. I didn't expect it to shoot up higher and higher on the megaphone patterns in such a short time, but this is FAZ and it's a spaz. It's pulled back down to 70.00 since I took this last photo (below) as the Dow tiptoes above and below break-even. Quite a run in the past hour plus. I'd be fine holding this had I entered at 67 and 68. Right now, it's a dodgy proposition. A small entry position would suffice in case the market buckles and FAZ returns to 79 or 81. Tight stops absolutely recommended.

FAZ 1-minute: Getting to these higher megaphones surprised me,

but it could actually get above the highest before today is over. 

And then return to yesterday's closing price. 

Of course!

7:07 am Down goes FAZ! That was quick, as usual. Stairway up, elevator down, as usual. FAZ broke through the megaphone patters up and then down, and then some. Got down to 68.10 or so, looking similar to the avalanche from yesterday's final hour. Dow is +38, AGQ is up 3.7% to 109+. DGP is up 3.2% to 53.92. FAZ is still up 2.5% for the day at 68.32. The run for today may be done. Not touching anything yet, though AAPL (374+) is well off its low of the day (360+). 

FAZ 1-minute: A rerun of the final hour yesterday. So now what? 

Update 7:25 am I wanted 65, I might get it. But I also want 60, 55...

Easy come, easy go

Little high, little low

Flat indices, metals trashed

6:09 am (Hawaii) Well, this is the other side of my "late" sell of DGP yesterday. I waited until I was down almost $4 from the top to unload my modest position at 68.57. It continued lower into the 67+ area, then came back to 68+ by the close. Today? DGP is struggling to stay above 64, which is the level I re-entered at last week. Glad I'm out.

You can be as bullish on gold as you want, but human nature is what it is. A huge run will lead to profit-taking sooner or later. So I'm fine just sidelining and being prepared for the next timely entry point. I don't mind re-entering a bit late. I just have no interest in jumping back in while the momentum is clearly still downward.

Besides the PM spot prices and ETFs, miners are getting head-slammed. XG is at 9.10, up from its low of the day (8.76). It's down 8.1%. GORO (-7.6%), UBG (-7%), EXK (-6.9%) all at the bottom of my Metals list (19% green, 81% red). AGQ is at 214+, down roughly 36 bucks since Monday. SLW, which had been hawwt, is down 6% to 36.45.

One of my favorite bloggers/traders of all time, StockGuy22, has been short gold since near the top through DZZ, which I tried to trade last week with no fortunate result. DZZ is above 4.60 today. It closed at 4.34 yesterday and opened at the same price, oddly enough. It's up 7.1% to top the Metals list. DUST, ZSL, GLL, DGZ all lead the list.

My Regular watch list is 21% green, 79% red. Quite broad while the indices are all less than 1% down. Not a bullish sign at all following yesterday's 300+ gain in the Dow. This info about $1.5 billion leaving GLD notes that GLD had surpassed SPY as the largest ETF. I saw one analyst mock this event, as if SPY were untouchable. It just felt to me like doubters who mocked AAPL as its market cap began to swell a few years ago.

Gold itself has moved up because of reality, not because of fantasy. It's movements have sometimes reminded me of AAPL, especially the dropdowns after reaching new highs. Swings. The obvious difference is price control via margin hikes, like the one in Shanghai — making it two hikes in one month.

No significant news today. I'm not watching any TV, just surfing the net with a view of the sunrise. There's little point to staying exposed to every bit of white noise until Jackson Hole in two days. Even then, if Helicopter Ben says nothing of essence, I'm fine staying 100% cash. Like AAPL, there are times to wait out the downswing. There are times to sit out before entering the water again. This time with paper gold, it's the latter for me.

GLD: Golden trade

SPDR Gold Trust ETF

Fund Summary

The investment seeks to replicate the performance, net of expenses, of the price of gold bullion. The trust holds gold, and is expected to issue baskets in exchange for deposits of gold, and to distribute gold in connection with redemption of baskets. The gold held by the trust will only be sold on an as-needed basis to pay trust expenses, in the event the trust terminates and liquidates its assets, or as otherwise required by law or regulation.

Candlestick Analysis: "Buy If" (American Bulls). Currently in a Bullish Engulfing Pattern. 

Summary: The numbers and charts don't lie. Gold and GLD outperformed the general market for the past five years, and now that it has status as a premier currency, that trend is unlikely to change. For the first time, I'm really thinking about going long GLD, a small position as a safe harbor. 

GLD 3-year chart (monthly)

GLD traded down with the rest of the market in early 2009. Recently, it has traded apart from most stocks.

GLD 5-year vs. Euro (FXE), Dollar (UUP), S&P 500 (SPY)

Currencies have been no match for GLD over the years. The first decoupling came in late 2007. 

GLD vs. FXE, UUP, S&P 500, 6-month chart (daily)

The Dollar has outperformed in the past six months as the Euro sinks. Gold has been relatively steady while the S&P dropped in the past two months. 

GLD vs. FXE, UUP, SPY, 5-day chart (15-minute)

GLD vs. FXE, UUP, SPY, 2-day chart (5-minute)

The past two days were especially rotten for the Euro and S&P. 

Hump Day Candles

[Note, 10:16 pm Hawaii time: Adds candlestick analysis by American Bulls on daily (black) charts.]

2-day charts (5-minute bars)

Apple (AAPL 263.95 +3.12 +1.20%)

Bear trap to close Tuesday ... bull trap to close Wednesday?

FAS (24.42 +1.82 +8.06%)

I don't trust the financials, but watch closely. US fins still coupled with Euro banks.

FAZ (14.60 -1.32 -8.29%)

SCO (15.56 -1.84 -3.77%)

Inverse oil ETN leveling out as BP finds its footing

Daily charts from AAPL to VXX

American Bulls: AAPL was a buy at 259 on Tuesday; currently a "hold"

American Bulls: BIDU is a "buy-if"

American Bulls: BP is a "wait"

American Bulls: C was a buy on May 21 (3.63) and remains a "hold"

American Bulls: DNDN remains a "wait"

American Bulls: FAS remains a "wait"

American Bulls: FAZ was a buy on June 1 (15.43) and remains a "hold"

American Bulls: FXE is a "wait"

American Bulls: GLD was a buy on May 25 (117.16) and is now a "sell-if"

American Bulls: GOOG was a buy on May 27 (484.86) and remains a "hold"

American Bulls: GS remains a "wait"

American Bulls: IMAX remains a "wait"

American Bulls: IRE was a "buy confirmed" today at 4.92

American Bulls: JMBA is a "buy-if"

American Bulls: NBG remains a "wait"

American Bulls: NFLX was a buy on May 25 (101.62) and remains a "wait"

American Bulls: QQQQ remains a "wait"

American Bulls: SLV remains a wait

American Bulls: SPY is a "buy-if"

American Bulls: STD was a "buy confirmed" today at 9.84

American Bulls: TLT was a buy on May 19 (95.98) and remains a hold

American Bulls: TYH is a "buy-if"

American Bulls: USO remains a "wait"

American Bulls: UUP remains a "wait"

American Bulls: VXX was a buy on May 6 (24.01) and is now a "sell-if"

American Bulls: X is a "buy-if"