No, it must reverse. However, there is a lot of buying pressure now so that only strong resistance would be a point of reversal. Pullbacks are being bought relentlessly. this reminds me of a fabulous run of $wtic last Spring and Summer till an outside event busted the rally. A lot of funds are trying to make up losses from last year, it seems.

Expect XLF to reach its MA(50)=8.88 tomorrow and reverse there. that's roughly 4% on XLF, 8% on UYG (till about 2.70) and 12 % on FAS (up to 6. 25-6.30). That would put FAZ down to 32. Heck, I was saying XLF would top in high 8s. Too bad I did not believe what I was saying :(

I think your scenario is pretty realistic.

volume on the XLF is below average, though. the same for iyr

http://www.investors.com/quotes/default.asp?ac=&t=xlf

With all the respect to your chart, I would expect XLF to drop to low 7 when $djia hits its measured target of 7063 on ravun's chart and goes lower. To reverse this drop, strong support will be needed. Gaps resistance at 733 will not be one, hence a further drop to 820 and likely to 813 will ensue.  There a retest of the rising trend line will take place. This is under the scenario that the bottom is in place.

My target for XLF is at least MA(20)=7.47. There is also support between 7 and 7.20, which should be a likely target. For what it's worth.

That should take FAZ to about 56 and UYG to about 1.76.

rp, Becoming oblivious to what a piece is doing is done by decision. A lack of awareness and responsibility for oneself are also voluntary actions, also done after a prior decision. What they were doing is stealing hard-earned money from others by manipulating the money supply. This action qualifies as fraud, and it's done intentionally (after a prior decision and an with ongoing consent). There is no difference between a perpetrator and victim of fraud: merely one of them is effect and the other is cause. Their Astrological natal charts look very similar. Both are crooks, and are below civilized and honest citizens. The end of the subject.

rp, I don't mean to talk politics here but CEOs control their employees as if they are the property of the company. Morals here do not apply, what you are seeing is a rare moment of truth. CEOs are major players in this game, and for them no rules apply. Their employees are just pieces in the game. You worked as a trader, so you know what kind of bullshit is used to deceive pieces to obey their masters.

Matt, Based on the chart, what would be the targets of the pull back for UYG (or XLF)? You may assume for now that the resistance at 8.64 (MA(50) on XLF) holds. Thanks in advance!

The resistance at 8.64 on XLF (see the chart from yesterday) must hold. I am sitting tight, XLF has already surprised me enough to the upside.

rp, I have the same hunch for today's action. Thanks for confirming the targets. Good luck with your shorts, everyone!

For the past week, the percents of change for financial ultra long and short ETFs are:

FAS 95.1%

UYG 57.3%

SKF -44.4%

FAZ -61.4%

Hence, in spite of popular opinions to the contrary, one should buy the appropriate ETFs for the expected trend and not to short the opposite one instead. Source: Investor's Business Daily

rp, What's your target for SRS on its way up?

We are near a target for this rally (61% retracement) at 766. We may touch it briefly on Monday and then sell off, or we may just sell off here. This rally reminds me of the first week after the bottom in Movember (the Thanksgivings week). Market has advanced for 5 consecutive days now. Off course, anything could happen but I am relatively calm now even though my account is under water too.

Perfectly described!

I was presented with a double-top scenario for UYG/XLF at the MA(20) at 7.66 in a personal message. That is one likely scenario. I do feel that XLF would move higher if  $SPX goes into the 740-760 range, perhaps to 8 or RSI(14)=50 or some other odd number. Again, I could be wrong here.

rp, I would be cautious on FXI short, as I would expect a rebound in Chinese markets. In my opinion, they have already bottomed ahead of the US markets, and are in the primary wave B. Remember that they went down before the US markets and had a steeper decline. For what it's worth.

You used no stops and added to a losing position? You are a real man! I bought a bit of SRS too in the aftermarket. I will hold it till we retest the broken upper trendline on $SPX in the low 700 range. Good luck to you in this trade.

Here predicts a target for wave 4 in the range of 750-775, and a bottom for SPX below 500 later this year. He previously over- estimated the December-January rally to the 975-1010 range, I hope he is right this time. A link to his article is here

Perhaps, only an intermediate one. I would expect UYG to move up till XLF touches its MA(50) at high 8 or low 9.