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Vet67to82 (< 20)

FAS, Financials and the MS Upgrade

Recs

107

May 30, 2009 – Comments (10) | RELATED TICKERS: FAS , FAZ , XLF

Friday 5/29/2009 the market struggled 'till the last hour ... MS got upgraded ... that's what happened. I agree with the upgrade and the upgrade thinking ... the financial stocks were driven to ridiculously low valuations, sooner, or later, the BEARS, and the SHORTS, were going to overstay their welcome and should have expected improving fundamentals, outlooks, and stock prices, etc ... to result in "upgrades". Upgrades usualy result in increasing stock prices and can lift not only the target stock, but its brethren also. Soooo, it looks like  a short covering race that ran out of time at the four O'clock bell ... but appears to be struggling in the after market. As of the last report, MS is a FAS holding.

All too often, I see short positions, one of the "fundamentals" I monitor, that are increasing. even as the target stock's price is increasing ... DUH! I deem this is BULLISH, as these "borrowed" shares" are going to get called back by their owners. Actually, that deserves another DUH!. The fundamentals are increasing, the stock price is increasing .. instead of covering your shorts ... the evidence shows you borrow MORE stock you don't own, to short, and the MARKET absorbs every one of those shares and the stock price keeps climbing.  This is GREAT for FAS and Bad for FAZ.

Hint 101: The market absorbing all those additional shares you're shorting and the increasing stock prices are TWO CLUES your Bearish calls are WRONG. At what point, the point you MR JOE SHORT-SELLER do not seem to get, do the people you're BORROWING the shares from CUT you OFF and DEMAND the borrowed shares back? 

Mr. Joe Shortseller ... you should expect MORE upgrades; and, if you're lucky, Mr Joe Shortseller ... MS ( MS is held in FAS ) only goes to $35 ... and if you're not ... $50 plus ... June's upon us ... barbecue time. A Bears and shorts barbecue ... it's about time!

** Direxion Daily Financial Bull 3X Shrs (FAS)
10.00 +0.53 5.60% Volume: 171,155,738 After Hours: 9.89 -0.11/-1.10% Vol. 1.40 Mil

FAS Charts: 10 day/ 15 minute ( 5/15/2009 - 5/29/2009 )
Moving Average Price Compare
Yesterday, FAS closed above its 13 minute moving average. This is generally considered to an indication of a bullish trend.

Moving Averages -- No current signals

Bollinger Bands
FAS is trading above its upper Bollinger Band. Relative to recent price action, the stock is currently overextended and due for either a pause or retracement.

Stochastics
The Stochastic Oscillator is registering a bullish signal as the %K line is above the %D; however the oscillator has moved above the critical value of 80 and is now overbought. The overbought condition means that the upwards momentum experienced in this stock is not sustainable.

On Balance Volume
The On Balance Volume indicator (OBV) presently offers a bullish signal. This is because the slope of the indicator is positive and shows that there is considerable buying interest.

Price Channel
FAS is trading above its 5 minute price channel. This means that the stock is trading at a new high for the period and the price channel will update to reflect that.

10 Comments – Post Your Own

#1) On May 30, 2009 at 11:22 PM, alexxlea (67.06) wrote:

Fas movements are irrelevant, do Rifin.x analysis instead.

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#2) On May 30, 2009 at 11:37 PM, TSIF (99.96) wrote:

I agree Vet, it should be a fun week next week.  I'm was in and out of FAZ and FAS twice last week. I expect I'll be holding my FAS a little longer next time!  Maybe a lot longer.

I don't become attached to either. Mr. Market is nothing but irrational, but what most people dont' seem to understand is that even when he's "wrong" he's "right".  Let the trends start and ride 'em.  Don't anticipate 'em, and don't fight 'em.

Good luck. 

 

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#3) On May 31, 2009 at 12:25 AM, Vet67to82 (< 20) wrote:

Thanks for your reply alexxiea ... I am well aware of the Russell 1000 Financial Services (RGS) Index ... but you can't directly invest in an index ... so I chart FAS, FAZ, XLF, JPM, GS, MS, BAC, WFC, etc ... for both long term and short term and with trading systems that look for both bullish and bearish outcomes ... so I have a real good look at BOTH sides of the coin ...

Thank you for your reply also TSIF and I agree, all too often  the "rational, common sense" outcome isn't the one we get. 

Thanks again for your replies.  

 

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#4) On May 31, 2009 at 1:46 AM, portefeuille (99.60) wrote:

Upgrades usualy result in increasing stock prices ...

not really

Thanks for your reply alexxiea ... I am well aware of the Russell 1000 Financial Services (RGS) Index ... but you can't directly invest in an index ...

1,2,3, ...

also see this.

 

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#5) On May 31, 2009 at 12:54 PM, TSIF (99.96) wrote:

I swing TZA and TNA occasionally.  Small CAP bear/bull. Portefeuille's list has others I've used on CAPs.  I recommned those with decent volume.  Watch them the end of the day as they adjust to the day's market.  You can catch them over or under swing sometimes for a percent or two.   There are 2x and 3x ETF's for pretty much everything.   There have been times when I've owned FAS and FAZ at the same time, hedging or waiting for the trend to define.  I don't make much those days, but it seems to fit my risk/reward metrics.  Good luck.

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#6) On June 01, 2009 at 12:09 AM, Vet67to82 (< 20) wrote:

Thank you for your reply, Portefeuille and thank you for the lists

I did explore the lists ... ETFs are impressive ... but the lists are an indirect offering, rendering the ETF issuer's perspective based on the Russell, and NOTa "direct" investment in  the Russell 1000 Financial Services (RGS).   

Even as I write this I am running a full analysis of the Russell ... $RUI.X ....  from 6/29/87 (pre- '87 crash) thru 5/29/2009 ...  then I will redo the analysis back to 1970 and compare the resulting outcomes ... see if you get that from the talking heads ...

I'll post my observations and findings here. 

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#7) On June 01, 2009 at 1:23 AM, Vet67to82 (< 20) wrote:

 I know the Russell 1000 Financial Services (RGS) Index ($RIFIN.X) and the Russell ... $RUI.X ....  are two different indicii ... I am working on the RUI.x as it represents 92% of the US market as opposed to just the one sector. 

I always want to have a good idea of the market direction first, then the sector, then the individual company or commodity and per the Russell site ... the products off/on the Russell 1000 Financial are Direxion's FAS and FAZ ...     

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#8) On June 01, 2009 at 9:09 AM, Vet67to82 (< 20) wrote:

The pre-market is burning rubber ... FAZ is being ticketed for going the wrong way (sorry) $4.52/4.53 ... FAS is peddle to the metal ... up $10.40 @8:39:58 volume 1856775 shares have already traded ... all to the upside.

Crude $67.8 +1.49 (+2.25%) is up .
Natural Gas $3.972 0.137 (+3.57%)
RBOB gasoline $1.9152 + 0.0199 (+1.05%)
Gold $986.30 +7.50
silver 1587.5 26.50 (+1.7%) up.
Copper $227.85 8.10 (+3.69%)

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#9) On June 02, 2009 at 4:46 AM, Vet67to82 (< 20) wrote:

Per the 6/1/2009 close the Russell 1000 (RUI.x) closed above it's upper Bollinger Band and the 200 day moving average.  The RUI.x is also above its 13 week moving average.  The MACD just crossed above its signal line.  This is a bullish signal.

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#10) On June 02, 2009 at 5:29 AM, AbuH (< 20) wrote:

I have the same opinion Vet, it should be a fun week next week.  I'm was in and out of FAZ and FAS twice last week. I expect I'll be holding my FAS a little longer next time!  Maybe a lot longer.. Well, aside from that breaking news did you know that the Creative persons who are trying to make money online might try running a podcast.  A podcast is a web based broadcast, usually picked up by devices such as an iPod, that can broadcast just about anything, video, audio, you name it, and advertisers use them heavily.  A cash advance to put together a really good one could be very well spent.  Also, if you have a consulting business, providing information to internet companies about how to more effectively market their product or service, you could do very well with pay for podcasting.  Some people will get a cash advance in order to link up and tune in to the right kind of podcast.

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