Tuesday, January 24, 2012

XLF vs FAS vs FAZ

I like to compare different ETFs that are in the same industry group, for example XLF is financials, FAS is Bull 3x financials and FAZ is Bear 3x financials. Because they all have different trading volume, they shouldn't confirm unless there's something really behind it. Looking at these charts, I'm tempted to add to a financial short, but until the market finishes it's gap filling, it's dead money, plus the F_O_M_C may provide a better entry so I'll use my better judgement and just be patient, but the confirmation is striking.

These are all 15 min charts...

 FAZ-Short Financials (inverse ETF) is leading positive, a very strong bullish signal. For confirmation, FAS should be leading negative..

 And FAS is leading negative. Because FAS s simply a 3x leveraged version of XLF, XLF should look similar...

And XLF looks horrible, a very strong leading negative divergence.

Patience...

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