Trading update for Wednesday, 9/28/11

As I mentioned yesterday, it looked like the FAS was getting ready to generate a daily swing sell, and the FAZ was getting ready to generate a daily swing buy.

Well today, both of those setups were triggered. The FAS sell is circled in red, and the FAZ buy is circled in green:

Since I am still on the fence about the the market impact of a possible $3-5 Trillion dollar fund for European sovereign debt, I decided to favor going long the FAS for a longer term hold, as opposed to long the FAZ for a shorter term swing. This continues to be my bias.

I have an order to buy 1 lot of the FAS at 10.35 or at just above today's high of 12.14.

Barry Ritholz's Big Picture blog had a good article today on the importance of taking the stop loss if you are a trader, a bank or a country. Managing risk is what keeps us in the game, and taking the stop loss lets us play another day.

Disclosure: No positions in the securities mentioned.

***remember this is an illustration of what i am trading and my thinking...it is not a recommendation for you or anyone else to buy or sell this or any other security...trade at your own risk...my positions my change at any time without notice***