Thursday, February 19, 2009

FAZ and BGZ Crazyness.

The first chart is TNA 3x long. The second FAZ 3x short. FAZ may be unfair in this instance because of the financial mess, but it works for the purpose.

I thought I'd look into some of the 3x and 2x charts to see what they have to say about the market and if there may be some opportunity. The shorts are all showing signs of extreme bullishness. This type of pile on usually happens at bubble tops. Look at the volume candles on both charts. A high majority ocurred in the afternoon. These are some of the better equity indicators of extreme bear/bull ishness (and greed). One thing for sure is that those going into FAZ are not showing any signs of wanting to get out, and people are hauling ass to get out of TNA. The option chains for March are all over the place with some wild bets being placed. I mean all over the place. The fomations are rising and falling wedges that are both narrowing. FAZ's rose, fell and rose again this week once already, so I am not discounting another small pennant possibility.
At this time I'm not on either side of the trade as I am finding it frustrating as the market artificially levitates above where it should be and tests the lows. I am a perma bear. I know we are going lower, but I don't know when or how. Wave 5 is in progress. Is 3-5 ending or are the targets of 735 to 750 still valid?

I want to warn or remind that you'll get killed on any sudden reversal. Go look at my BGZ chart or SKF to see the pain that can be caused on the downside if you are not there to pull the plug. The bullish volume spike today in BGZ is incredible. Stops won't help you on a reversal at these levels, because it will not be orderly especially on a swing trade. Last one out turn off the lights.

If you hang out in these be careful and smart, not greedy. Pigs get slaughtered and this is the perfect vehicle for the slaughterhouse.

No comments:

Post a Comment

Keep it civil and respectful to others.