Financials, XLF & FAS

I was considering an add-to XLF call if XLF broke below the psychological level of $20 (a very even, magnetic number for stops to be placed at or just under); otherwise, I prefer FAS for the position.

 I had drawn two trendlines I expected XLF to break below, the first was easy which was a former low/support at $20.11, the second would be harder, but being it's such a psychological magnet, I was pretty sure we'd see a shake-out of $20, which is where I wanted to open an additional XLF call position. However, the move below $20 only lasted a few minutes and that was right at the end of trade yesterday and very early this morning. Even with equities, I never use limit or stop orders, I also don't show people my cards when I play poker.

It appears we have an inverse H&S bottom in place or nearly completed, if so, then <$20 shouldn't be seen again. The volume pattern for the price pattern is not confirming so it appears to me to be a "plant" (specifically placed there via the work of the market's middle men) as it's a widely recognized price pattern, but as far as naturally occurring, the volume is wrong; so it appears it is there on purpose to attract longs.

 As I said earlier, I'm not "Blown away" by the 3C divergences, they are there, but fairly weak, this is a 15 min. which is a decent timeframe, but as large as this pattern is now, it should reach 15 min, it's just now leading vertically so to me it's mediocre at best.

If we don't get good downside momentum to reduce the premium of XLF calls and a break of $20, I don't want to chase premium for XLF calls, I'd likely enter a FAS trading position (3x long Financial ETF). In this case, I think you can buy a breakout of $71.50, but be ready for a shakeout move, it wouldn't be uncommon even though they seem to be inviting longs in so I doubt they'd want to scare them too much.

In any case, it's a quick long position that is worthy of some consideration. I wouldn't chase much beyond $71.50 which is also a clear psychological level and exact resistance for FAS, again, I doubt very much its coincidental. It appears with such limited Wall St. involvement (evidenced by the weaker nature of the 3C divergences), they are counting on retail to help in the lifting process as well as the SPY Arb and any Carry cross they may be able to get working. I haven't checked the last two yet, but you get my point., just don't get greedy and hang around past your welcome.