Financials Follow Up XLF / FAS

Since my expectations are for a CONSTRUCTIVE PULLBACK (which may be a little skewed in its appearance today because of the normal Friday op-ex action; even the weeklies are consistently producing op-ex "pins". Last night I reminded that the market often opens on Friday and loiters for a majority of the day, around the area of Thursday's close, at least until about 2:30 when most on the contracts are wrapped up) it makes sense not to sit through leveraged draw down when the probabilities are still very high that these same positions can be re-opened at lower prices as the pullback wraps ups. 

I decided to go ahead and stick with some of the November expiration Financial calls, but as I always post before I make any changes, FAS I decided to wrap up for now mainly because it's a lot of resources to be just sitting there. Those resources may be better utilized or at least removed from the simple risk of "market exposure" which is higher than normal now because of the uncertainty surrounding the government debacle.

In any case, here's the minimal P/L for the FAS long trading position and what I see as the probabilities right now.

At a cost basis of $68.93 (with roughly $10.5k of open risk) and a fill of $70.56, the P/L for FAS came out to an insignificant gain of +2.3%.

Charts...

 This is the near term 3 min chart, mostly intraday action showing the accumulation/positive divegrence where FAS was a buy and showing today's negative divegrence & the reason for closing the position for the short term.

As far as Financials being a short, like FAZ long or XLF puts, remember the difference between probabilities and a high probability, low risk position. Probabilities are for a pullback in Financials, I DO NOT  think that this means Financials are a high probability short position, I think patience and seeing what the underlying trade looks like during a pullback to set up the next position are the wisest course of action for the moment.

The much stronger, much higher probabilities represented by the 30 min FAS chart show a very strong relative positive divegrence followed by a more powerful Leading Positive divergence. There are no signs of any distribution here so I believe the wisest course of action at the moment is to trade Financials (FAS) from the long side, using price weakness to enter new positions or add to existing one.