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FAZ: 2008 Part II On The Way?

Published 05/10/2012, 12:43 AM
Updated 07/09/2023, 06:31 AM
NOTE
2.47%

In looking at some of the longer-term charts of the Direction Daily Financial Bear 3X Shares ETF (FAZ), it almost looks like 2008 Part II is on the way, but let’s look at these charts relative to what will seem more reasonable today.
FAZ CHART
Relative to the here and now, FAZ is trading in a nice Double Bottom even though there is the possibility of a bit more consolidation between about $20.05 and $23.78 before this pattern might confirm on a closing basis at $23.78 for a target of $27.74 and this - $27.74 or really $27.00 – is where Armageddon enters into the equation possibly but a topic for another time.

At this time, it makes sense to think about FAZ’s unbelievably nice, really nice, and bullish Falling Wedge that looks like it finally means business with that Double Bottom holding its apex together. Supporting this bullish scenario is a subtle Island Reversal possibility that confirms right below the DB target at $27.70 for a target of $35.48 and well above safe confirmation of that Falling Wedge at $30.88 for a target of $81.20.
FAZ CHART 2
What makes that target of $81.20 interesting on this very volatile and thus risky ETF that is meant to be traded and not held is the fact that it does not represent Armaggedon but just its beginning.

Clearly, though, FAZ is far from $80.00 or even $35.48 or $27.74 right now and so let’s save that more dire scenario for another note if remotely appropriate with all of these bullish patterns remaining valid if FAZ remains above $19.92 on an intraday basis.

In turn, should that level hold to start help these patterns fulfill, there may be more reason to think that FAZ is telling us 2008 Part II is on the way.

Please note: I am long shares of FAZ.

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