Trade Idea-Set-Up (Swing) XLF / FAS

XLF/FAS looks pretty good for an upside move next week.

On 8/1 I posted, Closing FAZ Long but I didn't open anything to replace it such as FAS long, I wanted to wait and make sure there was a strong trade there. Right now, FAS/XLF long looks like one of the stronger positions out there for a market bounce.

If XLF comes down a bit intraday I'll likely enter August 16th $22 calls, if not I'll probably enter FAS long (3x long Financials), I'll let you know either way before I do anything.

Take a look at the charts, this one looks strong.

 XLF 30 min with the last set up (distribution with a FAZ long), I closed that FAZ long (3x short Financials) right at the bottom on 8/1 (green box), since there has been a strong positive leading divegrence.

 This is the XLF 15 min chart showing essentially the same with a little more detail.

 The near term charts look ready to go, this 2 min is at a new leading positive high, I may not get the kind of call entry I prefer (  a head fake move below support), but all in all I think it looks good even on some intraday weakness otherwise FAS long will do nicely.

Just to be clear, the longer term or big picture in financials is very ugly, this is a 4 hour chart of FAZ (3x short Financials) and this is confirmation...

A 4 hour leading negative in FAS (3x long Financials).

XLF looks even worse.

As for FAZ, this is a trade I "could" stick with, but decided to trade around any potential draw down and since this base has formed, FAZ has seen a deeper leading negative divegrence,

 The FAZ 5 min chart I'm showing for timing as it has bridged the short and intermediate term charts so timing looks good for a move lower in FAZ, higher in XLF/FAS.

This is the 2 min chart, again for the timing.

I'll be setting some intraday alerts for XLF prices to come down a bit and likely go with August 16th XLF $22 calls. If premiums don't come down today I'll likely look in to FAS long instead, finally replacing the FAZ position, but you can probably see why I waited for confirmation as well as not having money at risk for a week in a flat market.