There is a huge wall of resistance overhead here, and the upward momentum from the first half of 2009 is simply gone.
Prophet.net
Perhaps it’s time for another look at this chart:
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UPDATE: Pej sent me this updated reset chart, which gives a closer view:
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FAZ (triple bear financials) has toasted so many traders in the last 12 months, but perhaps it’s worth another look for the yahoos out there. It’s not fallen much at all since October, actually, and you have a clear stop at January’s lows.
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My own preference is actually to short FAS, the triple bull counterpart. That way you collect the decay even in a choppy sideways market, and you don’t have to worry about counterparty defaults since the cash is already in your account. Look at how weak the latest rally is relative to previous ones. The high was in October. If you’d sold this short back then, you’d have enjoyed a 20% price decay though the underlying stocks are only down 4%!
I agree with you and often have a look at this reset chart (there’s also a newer one that I can send you). But the Fed has bought more than a trillion dollars worth of these MBS. Do we know what they bought and from whom? Because it would be a big chunk of these resetting mortgages
Hi,
I am one of those guys who have been toasted by FAZ
Can you please let me know how you short FAS?
You need a good broker for getting borrows, like Interactive or Think or Swim. With them, you just click SELL.