Certainly there are still numerous problems to address, but have the financials finally created signs of positive momentum?
For nearly a year now, many traders have been taking advantage of an ETF called, Direxion Daily Financial Bear 3x Shares (FAZ). The ETF takes 300% inverse of the price performance of the Russell 1000 Financial Services Index. Basically when the financials go down, FAZ should go up.
Just 8 months ago the ETF was sitting at nearly 200 points. Fast-forward 7 months, and the ETF now sits at 5.24. Many of these financials haven’t even got destroyed in value that much. At one point FAZ was at 200. That being said, do these extremely low levels signal the good times ahead for the financials?
Like I stated earlier, the financials are by no means out of the woods, but slowly we could be making steps towards clarity. Of course, like any run in this market, many are assuming things are overbought and a correction should happen anytime; however, it is one thing for something to go from 100 to 40, but 200 to 5? The markets will definitely be interesting to watch over the next couple of days.
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