FAZ: Update On 2008 Part II On the Way?

So the May 9 note on the Direxion Daily Financial Bear 3x ETF (FAZ) started by charting out a Double Bottom with a target of $27.74 and a level that was found, and then some, last Friday but in a way that probably eliminates the Island Reversal pattern possibility discussed in that note too. This elimination, interestingly, should take us straight to Armageddon as shown by FAZ’s confirmed and multi-month Falling Wedge and the very pattern promising a massive spike higher in the VIX to 50 if not 90, but before going straight to 2012/3: The Sequel, let’s look quickly at the near-term chart and its nuances.


Its hourly chart is showing a Symmetrical Triangle that is likely to work as consolidation prior to a continuation of the uptrend to precede it but there is a gap below that opens up the possibility of a downside fulfillment that confirms at $26 for a target of $23 while its probably more likely upside scenario confirms at $29 for a target of $32.

This more bullish scenario seems in-line with a Rounding Bottom of sorts built from that Double Bottom and really just another version of the Island Reversal mentioned above, and thus it was not eliminated truly with confirmation absolutely required at $29 for a target of $38.

And so in thinking about FAZ, its fulfilled Double Bottom for $28 was Part I with its Rounding Bottom looking like Part II that should come into play within one to three months for $38 while Part III should reflect only what comes before that potential 2012/13 Armageddon scenario on its massive Falling Wedge confirmed for a target of $81.20 with some sort of decent far more likely than failure on a drop below $20.

Should that very bullish pattern confirm, it will set-up the second part of the possible Armageddon scenario and what will truly feel like 2008 Part II, but something worth waiting to discuss once Part II of FAZ’s bullish chart is close to completion as may be the case soon.