Best of luck on that trade. Keep in mind that FAZ will do better than 3x a drop in XLK “if” that drop is mostly unidirectional, particularly, more red closes than green closes. Should the financials grind around sideways for weeks or months & still go on to hit my next downside target(s), then FAZ is likely to return less than 3x the drop in XLF. Of course, it goes without saying that if XLF moves much higher & does not hit my price targets then you could lose 3x or more of what XLF gains. As I like to say, stops are not an option.

If you haven’t seen it before, I explain exactly why that is in the FAQ page (Resources>FAQs>ETF Related Questions>Is There A Disadvantage For Holding A Leveraged ETF For An Extended Period Of Time

Thanks for your coaching. I am truly convinced my SQQQ position will be profitable soon enough. As pre Russia provocation risks to the market’s stability have only gotten worse the extremes (like today) will only get bigger. I expect acceptable P/E ratios to be adjusted downward thus making T2 and T3 inevitable. Even after the market overreacts to Amazon’s 20 to 1 stock split just announced. … now if I can only figure out why my stops always get snipped by whipsaws :,-( …

Thanks, Good sense. You have been exsctly right on the down turn. How did you gauge t1 t2 t3 t4. How much conviction on more down?

LOL… Trade long enough & we all enter trades at exactly the wrong time. Just remember volatility is high so you can keep position sizes light & still make above-average profits if your targets are hit. Also consider scaling (layering) into and out of positions, adding more at the most objective & high-probability entry points, less at the so-so but still objective entries.

Finally, don’t forget the benefits of trading a diversified portfolio. Just as important in active swing trading as it is with investing. Best of luck, I hope that one pans out.

See this reply I just made to @Mikeflegel: https://rightsideofthechart.com/xlk-financial-sector-etf-backtesting-resistance/#comment-23473

Well, the post above was regarding XLF (financials). XLK (tech) has been my primary short (via /NQ or the Nasdaq 100 futures) since the Nasdaq topped late last year (and tech sector, as tech is by far the largest sector of the NDX at over 50%). However, the Nasdaq 100 has already fallen about 2x the S&P 500 so I’m starting to roll some profits from my Nasdaq shorts into other indexes (like the mid-caps) and sectors (like the financials), as they are likely to start to play catch-up to the tech sector in the next leg down.(note: the S&P 500 has a significant weighting of financials while the Nasdaq 100 has little to zero).

I bought SQQQ when the NASDAQ came back to +300 and now it’s bolted to +450 so I’m stuck until we close the gap created this morning … now I’m sure if I reverse into TQQQ I could kill this rally but I’m going to let it run for the Bulls. … when you see it drop like a knife you’ll know I just bought TQQQ.

So you mean get short on xlk right