they're 3x leveraged ETFs (that track the russell 1000 financial services index) with pretty high volatility. faz is bear, fas is bull. oriented primarily at daytrading. if you try to hold this stuff for any period of time (past a couple of days), you will lose money. you're betting on volatile swings of the index.

something that I thought was pretty informative when it comes to understanding leveraged ETFs:
http://seekingalpha.com/article/35789-the-case-against-leveraged-etfs

2/14/2009 12:43:14 PM

great article on the leveraged etfs....read it a few days ago

2/16/2009 1:27:24 AM

Quote :

"if you try to hold this stuff for any period of time (past a couple of days), you will lose money. you're betting on volatile swings of the index"

this is absolutely true. i lost my a fair chunk of change holding the leveraged double short crude etf during its move from 140 to near 150. i thought crude was topping out in the 140-150 range - i was right, as its ~ 40 now, but the leveraged double short etf behaved way more wildly than i had anticipated. i posted about it in the '08 thread.

if you don't have time to watch this, stay away. you're better of stressing about something tangible at your day job.

2/16/2009 9:22:53 AM

Have you guys been reading a lot of stuff recently that makes you really question the financial sector? I know they have been smashed already, but I'm reading from a lot of difference sources that the bailout plan is shit and the LEI across the world are getting even worse, which can't bode well for the banks.

2/16/2009 10:09:03 AM

New rule, the stock market should only be closed on holidays that I actually get off of work.

2/16/2009 10:25:22 AM

^^ Are you serious?

The financials are already insolvent and the rightful stock price is going to zero. The only reason it's not closer to 0 yet is because people think the government will continue stealing from the poor (its citizens) to give to the rich.

This isn't a new phenomenon its been known for several months that the financials are worthless on their own.

The banks will be nationalized or the mortgages will have to be guaranteed. It's one or the other.

The entire economy is coming to its knees and the sheep out there are cheering to get us there faster by reducing sales tax on lexuses.

2/16/2009 10:35:04 AM

Quote :

"The financials are already insolvent and the rightful stock price is going to zero."

Under what mechanism? I agree I think if they are forced to mark to market the assets, most of the top 10 will be imploded. However, there is a large faction of folks out there that aren't entirely sure forcing banks to mark to market in this environment makes perfect sense. I'd like to see your argument for or against, rather than spouting off "the end of the world is here" over and over again.

2/16/2009 10:44:16 AM

Quote :

"New rule, the stock market should only be closed on holidays that I actually get off of work."

2/16/2009 11:06:39 AM

http://www.iht.com/articles/2009/02/13/business/13insolvent.php



and here is a good article debating insolvency with several good links

http://seekingalpha.com/article/120151-america-s-banks-are-they-really-insolvent

[Edited on February 16, 2009 at 11:27 AM. Reason : a]

2/16/2009 11:17:16 AM

we're coming out swinging

2/16/2009 11:35:27 AM

Quote :

"Quote : "New rule, the stock market should only be closed on holidays that I actually get off of work." 2/16/2009 11:06:39 AM"

or we should be given more days off as official holidays..

2/16/2009 11:36:37 AM

Dow Futures down 100 points. I think tomorrow is going to be a nasty nasty day with a cracking of the Nov 20 lows.

2/16/2009 10:29:12 PM

2/17/2009 9:35:20 AM

Yeah really, even with options lowering my basis I'm still negative by a little at the moment. FAS is going to find a home in this range for the foreseeable future. I can't imagine anything that will give us a rally between now and next earnings season, only a slow leak of prices to the south (except gold).

2/17/2009 9:42:40 AM

FAS pwnt. stay home.

2/17/2009 9:54:44 AM

GE going to touch the 10.75 range hopefully today. hoefully it doesnt break its 52 week low.

gonna load up on that bad boy for a quick trade

2/17/2009 10:04:10 AM

2/17/2009 10:07:23 AM

i know right

52 week low 10.66
day low 10.71
buy order 10.65



[Edited on February 17, 2009 at 10:41 AM. Reason : .]

2/17/2009 10:12:10 AM

THE SKY IS FALLING

2/17/2009 11:00:33 AM

glad i got out on Thursday in FAS. gonna buy back in soon. funds still aren't cleared.

2/17/2009 11:25:06 AM

2/17/2009 11:25:29 AM

At least my 401k contributions are buying pretty cheap....and I only started the 401k about 18 months before the collapse.

2/17/2009 11:55:50 AM

picked up 360 shares of SSO @ 20.20

2/17/2009 12:10:55 PM

^ good day for an in. pile in more if tomorrow is a down day also.

2/17/2009 1:19:41 PM

^^ Why not sell 3 Feb 21 calls on that position? It isn't much, but options expire Friday and it should give you a free $150 or so in your account?

Or hell, sell June 23 or 24s and put the 600-750 in your account and if you get called away, bfd, as you'll be profiting. No reason to take the position and just let it sit there. There is a good chance we'll move sideways for the foreseeable future. If you really intend to sit on it for awhile anyway, make it do some work while you have it.

[Edited on February 17, 2009 at 1:43 PM. Reason : .]

2/17/2009 1:32:35 PM

i can't trade options in my 401k SDA.

2/17/2009 1:57:32 PM

BUY BUY BUY BUY

2/17/2009 3:04:56 PM

What was the nov low?

2/17/2009 3:07:39 PM

7552 on the Dow, like 754 or something on the S&P. So, it's at least some good news that we'll close above those today. If we can keep from cracking them in the next day or so, that should at least give some short term reprieve to the selling pressure.

2/17/2009 3:12:37 PM

If we dip at all tomorrow we'll pass all of the november lows it seems, however, none of that indicates a buy position.

theres a lot of bad news out there, but the after hours show ups for almost everything and negatives for bear ETFs, so we could start off high tomorrow but i think we'll be flat overall by days end.

2/17/2009 5:03:06 PM

Why on earth would you load up on GE? That stock is going to zero in all likelihood that has been obvious for months

2/17/2009 7:09:35 PM

How about you go ahead and short the hell out of the stock then? I figure several thousand shares should do the trick.

Are you serious? Worst case scenario they have to carve out their financial business and sell off some unprofitable segments.

2/17/2009 7:33:05 PM

yeah, i just laugh when i read stuff like that

but you have a point. why aren't you shorting GE and everything else, rallydurham? you know, putting your money where your mouth is?

2/17/2009 7:36:46 PM

Well for starters that would require a margin account which would be illegal for me.

What kind of hole are you living in that you can't see the absolute travesty that is GE.

I'd dump GE at 10 for the same reasons I would tell clients to dump it at 30.

The debt based models aren't going to work right now, period.


Also, I wouldn't short any stock entering a hyperinflationary environment like we're in now. My trading accounts have been in gold and miners since November. Tough to find fault with those results.

Look I fought the tide for a long time, but I'm not willing to get wiped out when the evidence is overwhelming. Equities are going down hard, period. We went to bed in 2007 and woke up in 1974.


If you think the losses have been ugly thus far, just wait until they go down another 15% and then your purchasing power gets wiped out by this inflation tsunami.

The Dow:Gold ratio isn't 2:1 yet. You still have time. You don't try to be a hero in an avalanche, you try to stay alive and find survivors later.



[Edited on February 17, 2009 at 8:00 PM. Reason : a]

2/17/2009 7:50:08 PM

gold eh? i'm considering it

2/17/2009 7:59:52 PM

bought some SKF and FAZ pre-market this morning and sold it this afternoon for a $2600 gain.

2/17/2009 8:01:40 PM

sure you did

2/17/2009 10:15:45 PM

Anyone looking at DXO? Oil could have a little bit of downward pressure, but I can't imagine too much more. It probably doesn't recover too much too soon, but its 2x so even a modest recovery in oil price should get you an easy 10-15% on this guy.

2/18/2009 6:40:39 AM

Gold has definitely been saving my account thats for sure, I am still headed down with the market but at a much slower rate. Today will be interesting to see if we head below those november lows or not.

2/18/2009 9:01:03 AM

futures showing a rise, but that's not really a good/bad sign

DXO looks pretty tasty.

[Edited on February 18, 2009 at 9:33 AM. Reason : ]

2/18/2009 9:29:26 AM

Eh, I dunno about DXO now. I've read some stuff that says it isn't tracking very well at all. I might look at one of the other energy index plays, UNG, USO, etc.

And to say I am getting creamed on my FAS position at the moment is a mild understatement.

2/18/2009 10:14:09 AM

i'm holding nothing right now... looking for a short-term play.

2/18/2009 10:21:08 AM

well FAS has completely devastated my account again.

sigh.

2/18/2009 10:28:25 AM

I must say I was thinking about pulling the trigger on another 300 shares of FAS when it was at 5.51. After Friday I could sell covered calls on the 600 position for $1 and lowered my overall cost basis down into the low 5 range.

Based on the way my luck has ran over the past couple months, this will have proved to been a good strategy in about 3-4 days times.

2/18/2009 10:36:41 AM

Added more to my gold position today to ride all the momentum up and to hedge a possible break lower

2/18/2009 10:54:31 AM

Which gold equity are you in?

2/18/2009 10:55:49 AM

AUY

2/18/2009 10:59:01 AM

Obama talking about the new housing plan in 45 minutes - seems like every time a gov't official speaks these days we can count on a 200 pt drop.

2/18/2009 11:28:21 AM

jesus I stopped paying attention for a week there.

almost at 7500?

wtf

2/18/2009 11:46:47 AM

contemplating FAS before Osama speaks

2/18/2009 11:50:50 AM