ETF Trading: Trusting The Market

If I had the ability to show you the 10 Day, 15 Minute charts of Direxion Financial Bull 3X Shares ETF (FAS) and Direxion Financial Bear 3X Shares ETF (FAZ), I would, but I am currently not at my own computer and can’t exactly take screen shots.  This is the first day in a long while that the $UVOL is breaking above the $DVOL, which is a significant change for the market.  When I got to my computer today at 11, I first noticed that my watchlist had absolutely exploded.  There were multiple gaps up, as well as a market gone positive.  In fact, I decided to pick up USO @ $27.41 (a lot high, mind you) in order to gain an edge on a possible Oil spike.  UltraShort Oil & Gas ProShares ETF (DUG) has been getting wrecked today for the most part, and since it hit its high of $34.72 yesterday, I have decided to get into the commodity rally that I see approaching.

THIS IS A DANGEROUS RALLY THOUGH:  Don’t go off and go buy buy buy crazy.  It will smack you in the face.  The main reason I am saying this is because of the action in FAZ, FAS, and the $UVOL/$DVOL.  Although these volume indicators are showing a slightly bullish market sentiment today, don’t be fooled; with the market high as a kite, FAZ is still up 4 points.

To be completely honest, I think that the market is currently being foolish and this rally today was a little bit of a panic attack to the market after the S&P 500 (^GSPC) closed below 700 yesterday.  This leads me to believe that people will begin to rush towards hard commodities, such as the basic materials and energy sectors, as a full-on bargain run.  I am still questionable, but with today’s action, I feel that the “Freeing up of Cash from the Profits of Gold” traders are now moving to a new commodity in the short-term (aka Oil).

I just purchased FAS (25% exposed) @ $3.59.  It’ll go lower at first, but I have faith that with the commodity run, the market may gain a couple more points out of the financials towards the close today.  Defend the budget all you want, Timmy G-Money, it won’t do anything to help the world’s financial situation in the long run.

UPDATE:
Traded out of FAS, first to take profit @ $3.70 before I left the computer I was at and drove home, next @ $3.98 to close the position.  Took a 7% gain.  Still holding onto United States Oil ETF (USO) for tomorrow, for I don’t trust this market one bit.

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