FAS As a QUICK Long Trade

Or perhaps a call (options) in financials, the point being a very quick move up in financials and it sets up the short as you can see by JPM's earnings this morning, their revenue streams are all down and like banks do every earnings quarter, they simply released their loan loss reserves to make income earnings look stronger than they are knowing most people don't even bother with guidance, just a beat or miss.

I believe this is the true reason for QE3, a bank re-capitialization and a reason why QE3 could be very different than 1 or 2, consider it as the same in essence as the ECB's LTRO 1 and 2, then French president Sarkozy said the extra money going to the banks at 1% interest for 3 years would send sovereign yields lower as they bought up the sovereigns in a carry trade; borrow from the ECB at 1% and make 5, 6, or even 7% on the sovereigns of Italy and Spain as well as others. What really happened? The ECB's overnight deposit facility saw record inflows of money from the banks that were willing to borrow at 1% and get .75% interest in the ECB deposit facility, essentially losing .25%, but having capital they very much needed, no they weren't buying sovereigns or stocks, they were hoarding cash for what they knew was and is coming.

I suspect QE3 isn't much different judging by the Financial sector and the urgency from the F_E_D, Ben still probably has nightmares about those few months in 2008 when the entire sector nearly imploded.

 Any way, the FAS trade (Financials 3X long).

 In what is another reason for the market to rally in the next week, Financials which didn't get beat up to badly and thus haven't been on my list of long trades, are in a perfect triangle, a bullish consolidation/continuation pattern. Traders expect the financials price pattern to break to the upside and before we get any significant downside, that head fake move will happen, thus a short term trade in FAS should work, then you'll have something to short in to.

 The long term 60 min 3C underlying trade for FAS/Financials, leading negative which confirms the head fake scenario above.

 Here's the triangle and 3C has stuck with price for the most part, not offering any recent opportunities.

 However today the short term charts are flying in leading positive momentum for an upside breakout in FAS/Financials-2 min

3 min
And this after really nothing positive.

So if you are nimble, you can play financials from the long side for a quick breakout to the upside of the triangle, you'll want to be watching updates for the negative divergences and the opportunity to trade with the underlying trend and reverse to the short side for the longer term, but you should be able to make money in both directions, only the upside move won't have as much potential, thus the leveraged FAS as the trading vehicle.