FAS/FAZ Chart Request...

3C for newer members is a proprietary indicator I created some years ago to see the underlying action of the market. Just because price is moving up doesn't mean the trend is stable. When we have a negative divergence (red arrows) into higher prices, Smart Money is distributing their shares into demand and the trend is likely to reverse when they are done. Likewise, a market moving down may be under accumulation and soon to reverse to the upside-positive divergences occur when price moves lower and 3C moves higher (white arrows). Trend confirmation (a stable trend-will see 3C moving with price-in an uptrend, making higher highs and higher lows and vice-versa).

The name 3C is simple, "Compare, compare, compare" The more confirmation you have among timeframes and different equities with inverse relationships, the more reliable your findings are.

So here we'll compare FAS (Financial Bull 3X leveraged) to FAZ (Financial Bear 3x leveraged). You'll notice I use a lot of ETFs, the reason is because they tend to give faster signals and more reliable signals. If I compare the SPY with the S&P-500 there is often noise in the S&P-500 as stocks within the index are traded in baskets to equalize tracking funds and ETFs, so the actual trading of these stocks often isn't a sign of an accurate signal, but just routine maintenance of tracking funds and ETFs. ETFs will trade with different volume then the averages and usually will more accurately portray demand or supply.

With 3C, the longer the timeframe, the more important a divergence is on that timeframe. 15 min timeframe divergences often reflect swing moves in the market when confirmed with shorter timeframes. The 1 min timeframe is usually indicative of market maker/specialist activity, it's largely irrelevant to a broader trend, but does have implications for intraday moves.

I'll start with FAS and then compare the same timeframe in FAZ in different timeframes so you can see direct comparisons. If there's a good signal we should see similar divergences, albeit inverse (a positive divergence in FAS should see a corresponding negative divergence in FAZ).  For those of you not trading either, this is still valuable information as it will portray the underlying dynamics in financials which are important to broader market action, especially in the S&P-500.

 FAS 60 min. Positive divergence lasting approx. 5-6 days

 FAZ 60 min. negative divergence of the same duration.

 FAS 15 min.  a negative divergence at the close of 5/31, note this was also a false breakout and FAS moved lower on the open the next morning. Current positive divergence.

 FAZ 15 min. Shows the exact inverse behavior with a closing positive divergence on 5/31, again with a false breakdown sending FAZ higher. Currently a negative divergence.

 FAS 5 min. Positive leading divergence

 FAZ 5 min. leading negative divergence

 FAS 1 min. intraday FAS is seeing some profit taking, this may form a consolidation or a pullback.

FAZ 1 min. intraday is seeing some accumulation, again it could lead to a consolidation or a slight bounce.

Overall, there's excellent confirmation between the two, suggesting financials have upside in them over the course of the next several days. This should be positive for the market, especially the S&P which is outperforming the NASDAQ 100 by a 2:1 ratio.