Member Question

I thought I'd share this with you, the question was "Is FAZ (3x short financials) also a quick sell?"

When I opened the FAZ position it was in equities, not options. I have a very low tolerance for pullbacks and counter-trend moves in options, I'd rather take the profit and re-enter on a better looking signal.

Equity positions for me are different, even though FAZ is leveraged, I am more willing to ride out the bumps.

I intend to hold FAZ for now in the equities model portfolio, here's what I see that I like.

 After the negative divergence around the 24th, FAZ remained in a leading positive position as you can see above. (2 min chart trend)

 That also migrated to the 5 min chart, this isn't a "usual" divergence, but a less often seen type and the fact it is on at least two charts tends to give it more validity.

 The 10 min chart which is shorter in bars because I have to grab this timeframe from Telechart instead of SF, has a leading positive divergence that is ABOVE the recent highs or where 3C was at the recent highs, it built in very quickly.

And finally remember yesterday the talk about large, sudden moves on the 15 min charts? Here's a large, sudden leading positive divergence on FAZ's 15 min chart. Overall I like the position, I am pretty happy with the entry, I don't have significant proof that goes against the trend expectations so I'm sticking with the position.

This is meant for a shorter term trade, maybe a week or so.