Posted by billrosen on 3rd of Apr 2009 at 11:39 am
IMO...One of the great things about ETF's is they can't go
to zero, with that said I was thinking about FAZ and how volatile
it is. Being at 115.00 less than 30 days ago and now
trading under 18.00, that is a drop of roughly 83% during
which time the SPX rose roughly 25%. Now with Matt and Steve saying
they think the SPX goes to 1100 roughly over the next few months
and assuming they are correct, where does that put FAZ at those
highs??? That move in the SPX would be about 30% higher from
here. In that the financials have led this market both up and
down, that might place FAZ down to 1.80 ish when the SPX hits
1100...Scary to think about that and at the same time what a great
buying opportunity to get into FAZ when we go way down in
major wave C. I wonder where that would leave FAS at the
bottom of final wave down C as well, another great shot to make a
ton of money going in the other direction. Just thinkiig out loud
here, while I am on the sidelines and not trading during this
chop.
Bill, these ETF's don't trade uniformly with anything really.
One thing I have noticed, is when I test one of these for a
strategy, the buy and hold returns are generally pretty bad. For
example buy and hold of the short funds during the past year were
dreadful results compared to trading a system - or even
S & R. Just mention this so you can be careful about
doing buy and hold for any length of time once a reversal does
come.
Posted by billrosen on 3rd of Apr 2009 at 12:08 pm
I know they have a mind of their own sometimes, but if you
bought and held, and not traded FAS, since the lows on March 9th
you are up huge, something like 300%, personally I do not have the
stomach to sit thru the rollercoaster of the 3x ETF's, I have
traded them and made and lost money and after it is all said and
done have broken about even using the 3x ETFs, all the while having
a heart attack watching them. Not worth it for me. It was more of
just an observation. I do think if someone bought and held FAZ
during the major wave C down and then bought and held FAS during
the next "real" bull market for years they would do very
well...although I will not be that person as my risk tolerance
comes nothing near those insane levels.
I have been drawing support and resistance lines all day around
FAS & FAZ with an eye towards a refilling of the
gaps. I assume that could or will happen in a market
pull back but it does bet against the trend.
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ETF thought
Posted by billrosen on 3rd of Apr 2009 at 11:39 am
IMO...One of the great things about ETF's is they can't go to zero, with that said I was thinking about FAZ and how volatile it is. Being at 115.00 less than 30 days ago and now trading under 18.00, that is a drop of roughly 83% during which time the SPX rose roughly 25%. Now with Matt and Steve saying they think the SPX goes to 1100 roughly over the next few months and assuming they are correct, where does that put FAZ at those highs??? That move in the SPX would be about 30% higher from here. In that the financials have led this market both up and down, that might place FAZ down to 1.80 ish when the SPX hits 1100...Scary to think about that and at the same time what a great buying opportunity to get into FAZ when we go way down in major wave C. I wonder where that would leave FAS at the bottom of final wave down C as well, another great shot to make a ton of money going in the other direction. Just thinkiig out loud here, while I am on the sidelines and not trading during this chop.
FAZ and FAS
Posted by rgoodwin on 3rd of Apr 2009 at 11:44 am
Bill, these ETF's don't trade uniformly with anything really. One thing I have noticed, is when I test one of these for a strategy, the buy and hold returns are generally pretty bad. For example buy and hold of the short funds during the past year were dreadful results compared to trading a system - or even S & R. Just mention this so you can be careful about doing buy and hold for any length of time once a reversal does come.
I know they have a
Posted by billrosen on 3rd of Apr 2009 at 12:08 pm
I know they have a mind of their own sometimes, but if you bought and held, and not traded FAS, since the lows on March 9th you are up huge, something like 300%, personally I do not have the stomach to sit thru the rollercoaster of the 3x ETF's, I have traded them and made and lost money and after it is all said and done have broken about even using the 3x ETFs, all the while having a heart attack watching them. Not worth it for me. It was more of just an observation. I do think if someone bought and held FAZ during the major wave C down and then bought and held FAS during the next "real" bull market for years they would do very well...although I will not be that person as my risk tolerance comes nothing near those insane levels.
I have been drawing support
Posted by straws on 3rd of Apr 2009 at 12:19 pm
I have been drawing support and resistance lines all day around FAS & FAZ with an eye towards a refilling of the gaps. I assume that could or will happen in a market pull back but it does bet against the trend.