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On the FAZ & the SKF

by Ashraf Laidi
May 13, 2009 20:13 | 15 Comments

On the FAZ & the SKF - Bearish Etfs (Chart 1)

FAZ and SKF are both Exchange-Traded Funds in the US aimed at exploiting the opportunities from falling bank and financial shares. An alternative to buying yen or buying USD to capitalize on an emerging sell-off in shares would be to go unleveraged by purchasing these ETFs via any provider of online stock trading. FAZ is the cheaper and more volatile option, used as triple bearish the financials, whereas SKF is the more expensive and less leveraged ETF. Both ETFs have shown massive declines since the March rally, but note how their oscillator has regained positive territory for the first time since the beginning of the recovery in stocks in early March. Heres more info on their holdings http://www.direxionshares.com/etf/fbe_3x_shares.html and

http://www.proshares.com/funds/skf.html

 

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Comments (Showing latest 10 of 15) View All Comments
Ashraf Laidi
London, UK
Posts: 0
15 years ago
May 21, 2009 15:36
inc, Yes, the 2-month cycle proving it still works. A close below 880, should take us to 825-830 next.

Ashraf
inc
singapore, Singapore
Posts: 3
15 years ago
May 21, 2009 15:22
Hi Ashraf,

Equities have been rallying for the past 2 months and now finally turning. Any particular range to look out for the downside for the S&P? thanks
Ashraf Laidi
London, UK
Posts: 0
15 years ago
May 19, 2009 9:01
apache, the duration of peak-to-trough lasted 3-4 years.. apologies for the confusion

Ashraf
apache99sg
Singapore, Singapore
Posts: 8
15 years ago
May 19, 2009 7:15
Hi Ashraf,
You mentioned that we are in 2.5 years of bear market. In your estimate, when do we start the bear market?

Dow was at 14000 around mid 2007. Based on this, we are only around 2 years of bear market. could you help to clarify on what i miss here?

thanks!
Ashraf Laidi
London, UK
Posts: 0
15 years ago
May 15, 2009 16:54
Taha, $1.53 may have become new resistancebut looks like the wedge support to hold at 1.5130 for now.

Ashraf
taha
Cairo, Egypt
Posts: 50
15 years ago
May 15, 2009 15:39
Hi Ashraf ,
I would like to know your expectation about the performance of Gbp/Usd for the next week .
Taha
Ashraf Laidi
London, UK
Posts: 0
15 years ago
May 14, 2009 22:01
Frank and everybody, DO NOT FORGET what I mentioned in February about the AVERAGE DURATION OF BEAR MARKETS LASTED 3-4 YEARS. WE ARE ONLY IN YEAR 2.5.

Ashraf
Frank
Canada
Posted Anonymously
15 years ago
May 14, 2009 21:57
Ashraf

Your call for the S&P to make a lower low 550 - 570 is very bearish but i believe your right ..

The world is still in denial about how bad the USA economy and world economies are ..

I'm trading with this in mind ..

Thanks

Frank
Ashraf Laidi
London, UK
Posts: 0
15 years ago
May 14, 2009 21:56
aviat, that's very true. I have more faith in the solidity of SKF. Note the large volumes in the last few weeks.

Ashraf
aviat72
New York, United States
Posts: 12
15 years ago
May 14, 2009 21:51
Ashraf:

FAZ/SKF compound daily. As a result unless we are in a strongly trending market, they will lose value as the daily churn eats up the value. They are primarily day-trading tools and at best useful for swing trading a move. If the financials continue to trade side-ways, both FAZ (and FAS) will lose value.

However if you expect the financials to start a major downtrend with one-sided moves, these instruments will do very well, as they did early this year.
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