FAS Lags, TNA Excels

The market had an excellent day with indices up more than 2%. At one time during the day, the Russell 2000 ($RUT.X), the small cap index, was up over 4%, then faded a bit at closing. It closed up 3.94%. Small caps usually lead others off the bottom during a new bull market, and can be used as one indicator this is a new bull, not a bear market correction.

FAS gaped up on opening, then ran up, but began to lag. It closed only 4.40% up, hardly beating the indices, and volume was less than average although higher than Friday's anemic amount. Today's price rise disappoints compared to expectations.

TNA, in comparison, demonstrates dramatically what could have been had FAS performed. TNA is the 3X ETF representing the Russell 2000, and closed up 11.56% today. It closed on the 20-day upper Bollinger band, indicating that a beginning market run that may "walk the band" for several days of uptrend. Also, note it gaped up, a very bullish sign. Other bullish indicators are 1) it broke out of a double bottom formation, exceeding the center peak (point B), 2) it has already exceeded the previous peak (point 5), 3) it had a mild correction since point 5, never dipping below the 38.2% retracement level, and 4) broke out of a Bollinger squeeze on higher than average volume, with price appreciating three times its index.

With FAS lagging and TNA performing dramatically, trading attention shifts to TNA and FAS will no longer be reported unless it resumes performance. Henceforth, this series will be labeled TNA, not FAS.