Direxion 3X Russell Funds (TNA)

[dalcindo]

Re: ECM & $SPX, FAZ, and FAZvs.$SPX - BEARISH

Hi, 3x!

Looking at the overall chart, I would have expected yet another bounce off of the MACD's trendline. HOWEVER, the one discreet event that contradicts all other patterns is the fact the on last occasion when MACD tested its support, the histogram declined towards the zero-line - as compared to the prior event where it would rally upwards.

Additionally, looking at the standard indicators:
- Both RSI and MACD remains in a protracted negative divergence with SPX;
- Last RSI rally failed the critical 70-level, indicative of market internal weakening in SPX;
- FAZ posted a double dip, adding credence to above expectation of likely market reversal to the down side.

Finally, the expansion/contraction patterns posted on 12 JAN 2010 seem to continue to develop as expected, with recent MAX Expansion on that day heralding a likely market decline ahead. I think that we are there, IMHO:


$SPX, FAZ, FAZ:$SPX - 12-Mo., Daily Chart:


- Dalcindo