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Deron Wagner is the founder and portfolio manager of Morpheus Trading Group. His daily focus is managing and trading the Morpheus Capital Hedge Fund, which he founded in April of 2004. He also teaches his swing trading strategy with The Wagner Daily newsletter, which provides exact entry, exit,... More
My company:
Morpheus Trading Group
My blog:
Morpheus Trading Group - swing trading blog
My book:
Advanced Technical Analysis of ETFs
  • Financial Bear ETF ($FAZ) Poised For NEAR-TERM Buy Entry 0 comments
    May 11, 2012 6:01 AM | about stocks: FAZ

    Over the past five sessions, the Direxion Financial Bear 3x Shares ETF ($FAZ) has been consolidating at support of its 20-day and 50-day moving averages. FAZ has also tested resistance around the $23.70 area three times within the past five weeks. As such, a move above this pivotal resistance level could generate momentum that leads FAZ substantially higher in the near-term. Regular subscribers of The Wagner Daily should note our specific entry, stop, and target prices for this swing trade in "today's watchlist" below. The following daily chart illustrates the technical setup for this potential trade:

    (click to enlarge)Direxion Financial Bear 3x Shares ETF ($FAZ)

    As a reminder, note that FAZ is a leveraged "short ETF." As with many other inversely correlated ETFs, especially the leveraged ones, this trade is designed to be of a very short-term nature. If it triggers our price for buy entry, we only plan to hold for a quick pop (anticipated hold time of just 3 to 4 days). Our average holding period for most swing trades is 1 to 3 weeks, but inversely correlated, leveraged ETFs typically underperform the underlying index as the holding period increases. This is discussed in more detail in my latest book.

    Despite yesterday's higher finish, it is noteworthy that all the major indices closed near their intraday lows. The market continues to struggle as leadership stocks are being hit hard. Yesterday, CRM fell over 10% and PCLN dropped almost 6.0%. Without solid leadership amongst individual stocks, the broad market is typically unable to move significantly higher. For the moment, more and more short setups seem to be developing, and we are finding fewer potential long candidates during our nightly research. For now, our bias remains on the short side of the market, but patience is required to allow setups to unfold.

    The commentary above is a short excerpt from The Wagner Daily, our nightly ETF and stock swing trading newsletter. Subscribers to the full version also receive specific entry and exit prices for all swing trade setups, an additional section dedicated to individual stock trades, and access to our Live Trading Room. To learn more about our trading strategy, please visit our trading blog.

    DISCLAIMER: There is a risk for substantial losses trading securities and commodities. This material is for information purposes only and should not be construed as an offer or solicitation of an offer to buy or sell any securities. Morpheus Trading, LLC (hereinafter "The Company") is not a licensed broker, broker-dealer, market maker, investment banker, investment advisor, analyst or underwriter. This discussion contains forward-looking statements that involve risks and uncertainties. A stock's actual results could differ materially from descriptions given. The companies discussed in this report have not approved any statements made by The Company. Please consult a broker or financial planner before purchasing or selling any securities discussed in The Wagner Daily (hereinafter "The Newsletter"). The Company has not been compensated by any of the companies listed herein, or by their affiliates, agents, officers or employees for the preparation and distribution of any materials in The Newsletter. The Company and/or its affiliates, officers, directors and employees may or may not buy, sell or have positions in the securities discussed in The Newsletter and may profit in the event the shares of the companies discussed in The Newsletter rise or fall in value. Past performance never guarantees future results.

    © 2002-2012 Morpheus Trading, LLC
    Reproduction without permission is strictly prohibited.

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