Financials, XLF, FAS, FAZ

XLF is the Financial Sector, FAS is the 3x leveraged Financial Bull or long, FAZ is the 3x leveraged Financial Bear or short (you buy each for their respective coverage, in other words you can short XLF for short exposure or buy FAZ, you don't need to short FAZ because it is already a bear ETF).

I'd like to add to FAZ, I'm a little hesitant at the moment, sometimes when we really have an itchy trigger finger we have to recognize the emotions behind that, there's both Fear and Greed; Fear that we will miss the trade and Greed, again that we will miss the trade, but I believe the only thing separating us from gamblers is having a real edge that you can point to and with Financials right now, they are so close, but not exactly where I'd like them to be.

 XLF Financials Daily chart, there's a triangle, at point "A" there's the expected breakout to the upside, this is a false breakout or head fake and quickly fails taking Financials down over 7% until they hit the 11/16 low with the rest of the market at the start of point "C" which is the rally we are now topping at. Point "D" I believe to be another head fake move, it is above all former resistance from the highest part of the triangle as well as the breakout at point "A", so it fits with a head fake move.

 I forgot to change the symbol back to XLF, but it is FAS which is the same thing, except 3x leveraged, all of the price patterns are the same. On this 60 min chart the area where the triangle from the chart above was,  is marked. At point "A" we have the head fake / false or failed breakout from the triangle-exactly what Technical traders expected, except it failed. At point "B", part of the reason for head fake moves is summed up in this saying, "From failed moves come fast moves" and we see a fast move to the downside catching all the longs who chased the breakout at a loss on a move greater than 7% down. On 11/a6 the entire market finds a bottom and we bounce/rally which is the current move we are in (probably stage 3 moving to stage 4 or top moving to decline). Point "D" is a new high head fake move as 3C is still in a deep leading negative divergence.

For longer term members you might recognize this as a Crazier than "Crazy Ivan" shakeout as it was shaken out to the upside, the downside and the up side again, it's one move down from 2 consecutive "Crazy Ivan " shakeouts.

 FAS-3x long Financials 15 min chart shows a positive divergence at the move that started this quest to take out QQQ resistance, since it has seen a negative divergence, but to me it's not strong enough for me, I'd like to see it leading negative.

 FAS 10 min chart is negative in the area, this is the transition from the 5 min charts yesterday and today the divergence going deeper to 10 min and 15 min charts.

 This is FAZ, the 3x leveraged BEAR or SHORT Financials ETF on a 10 min chart with a leading positive divergence, that's confirmation, but again it is not as strong as I would like to see here.

Back to FAS-the 3x leveraged BULL/Long Financials ETF on a local 15 min chart showing the start of a worse 15 min negative.

"If" I had no short exposure to Financials at all, i would probably enter a partial position in FAZ or if you want less leverage SKF (2x leverage) or just short XLF. I would prefer to leave a little room for either a better entry or better signals, but I would want some exposure. In the equity model portfolio I already have 66% of a full size position in FAZ so there's room to add, but because I already have the exposure, I will wait to add the last 33% or so until the signals are screaming and jumping off the chart.