Monday, April 5, 2010

Cha Ching..

Nope You are not looking at a flags of some countries these are our everyday trading vehicles FAZ/FAS. On left is FAS. It is getting closer to the top line of the upper band of the envelope which is approx at 105.5 The way to play this is to take a short when it touches the upper band with tight stop of $1. Sometimes one can hit these exactly. That is very high risk. The traditional method is to go long above the channel and sell when it enters the envelope back in. Both the methods are equally good. I will also be keeping the DMRM 3.2% in the corner of the page to go short. As of now there is no change in position of long. On the right is FAZ which honestly is falling apart. We backtested the DOMA 77 on the hourly and failed. That is negative. Add to that today was a negative KOD ( middle chart). I don't short FAZ instead I go long on FAS. There is no compelling reason to go long on FAZ. All bull ETFs and SPX made higher high a postive for longs and none of the indicators PPO, RSI and STO turned negative. The position is still the boring one staying long and cha ching on every tick.

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