Jimmy, I've played FAZ for a long time and I've taken a lot of baths with it. You gotta get out before the floor drops out--taking the bathtub with it.
I'm being facetious, but it's partly true. These risky ETF plays are EXTREMELY volatile. That makes them trading vehicles only and few hold them more than a few minutes, let alone overnight. I must say nearly every time I've held this one overnight I've been burned.
That said, FAZ appears to have bottomed out around $17. The charts of the banks look awful. There is a lot of downside there I think--especially if the economy doesn't turn around and it doesn't appear to be. If the banks run into trouble again, will they be bailed out again? I doubt it. There will be a revolution first. Too many folks are boiling mad at outfits like Goldman Sachs right now.
If the Dow goes down, the banks stocks will go down too. FAZ will go up. How high? I don't know--especially with the decay factored in. It's better for the air to go slowly out of the Dow for FAZ to gain traction. I doubt this will ever see $100 again, but $30 isn't out of the question.
Meanwhile, if you hold this long term or short...get ready for wild, roller coaster swings.
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