It didn't take long for inexperienced perma bears to get an expensive lesson in triple ETF's when the markets started to rebound two and a half years ago. Those who held on to FAZ, convinced that the Peter Schiff's of the world were right about the coming financial implosion (and Schiff was and is right, it was his timing that comes into question), learned first-hand that greed and common sense are two entirely different things.
Many newcomers didn't take the hint when the rally began earnestly in 2009 and held steadfastly onto FAZ until their losses were so great they had no other choice but capitulate. Welcome to the big leagues, kid.
Today, FAZ is trading at less than 1% of the highs it set in 2008. Only a quick trigger finger would have allowed the average investor to make any money on this ETF the past couple of years; nevertheless, there is some potential on the daily chart to take advantage of a triple ETF's power, providing greed doesn't overtake common sense once again.
One Year, Daily
The daily chart has turned bullish (and how many times have we been able to say that about a bearish ETF over the last couple of years?) surpassing five previous peaks on its latest leg up. That FAZ managed to rebound slightly below the 61.8 Fibonacci retracement is also a good sign, at least for the bears among us.
Two Year, Weekly
The weekly chart still has some work ahead of it. Ideally, a thrust above $88.75 should be enough to send even the bravest of bulls into retreat, paving the way for an ABCD pattern somewhere in the neighbourhood of $93.00.
A financial tornado looms.
In the balance are millions of investors who believe all is right with the world and that good will ultimately prevail.
