My Life My Trade

FAZ sold @ 19.63

SRS sold @ 9.08

TZA sold @ 11.43

Target price is $20.50 – $20.75 (XLF should retest $15.00 area filling up a gap there – giving a 2% downside to financials and hence 6% upside in FAZ).

Shortly after close of market, CNBC announced that John Paulson had purchased 160 million shares of BAC. Now, what they did not reveal was the fact that this purchase was made in Q2. Who knows what he has done to those shares since then.

Regardless, the BAC shares got a 4% pop in AH. This is a brainless fade-able move. Suckers are buying BAC up at $16+ because they just came to know that John Paulson (the guy who made billions shorting the housing market in 2007) bought BAC at $6 to $10 3 months ago. Almost 20 million shares have traded AH. Very likely John Paulson has sold a big chunk of those.

Fading the AH pop resulting from some “John Paulson” dude buying 160 million shares of BAC.

In the most recent break out, XLF has left two enticing gaps – one around $12.6 mark, and the other one around $13 mark. Aug 7th candle looks somewhat like a reversal candle.

$13 also marked the swing top in May. And $12.6 acted as a solid resistance for most of May, June and July. Any down move should take XLF down to $13 region pretty quickly. I will not be too greedy trying to wait for XLF to fill the $12.6 mark. If I am short, I will cover around XLF $13 mark. 10% haircut should move FAZ up to $33-$35, SKF to $33 and FAS down to $60.

The oscillators and BB on XLF look exactly same as those on the IYR charts in the posting on IYR. As always, any love shared is appreciated.

Not willing to hold over the weekend

Day-trade to be closed before end-of-day

Final cost after position management was $3.62 – net profit of 9% after commissions.