FAZ Trade

I've been talking a lot about FAZ lately and it's good positioning to take a shot at this one long. Including the warning that it may take a shot at breaking support, that is exactly what it did and has turned into a nice little trade. I think it's still in a position that it is reasonable to consider buying here.




FAZ LONG

This hourly 3C chart shows distribution (red arrow) at FAZ's top in August, price proceeded down from there. Since then it's formed a small double bottom and both bottoms have seen accumulation (white arrows). In the red square, while price is near the bottom lows, 3C is moving into a leading positive divergence, the most powerful sign of accumulation. I believe this is a decent entry point in FAZ. Recently we've been observing a black-box trading system trend that breaks typical and obvious technical patterns that T.A. users recognize and place orders because of them. These false breakouts I estimate to be occurring about 85% of the time when you have an obvious technical pattern. So a double bottom, even this small, may induce a black box system to run stops under that support level so make sure your risk management and position sizing allows for those stops to be run-in other words, widen your stop and don't place it under that support, but a bit lower, you can always add shares later. Otherwise, this is probably a decent entry point. 
FAZ's inverse counterpart, XLF is seeing a similar inverse pattern of distribution.

Late August XLF saw a good deal of accumulation at the white arrow, it sent prices higher to the September top where we see a negative 3C divergence or distribution at the very highs. Currently XLF is also in a leading divergence in the red box, but it is a negative leading divergence or heavy distribution.
The bottom line, financials are seeing distribution while FAZ, the inverse or short ETF on financials is seeing accumulation. FAZ is a leveraged trade, 3x so it can really move for you. Your other option would be to short XLF, but you'll get more bang for your buck going long FAZ.
Good luck!