Eye on JPM and FAZ (3 x Levered Inverse Financial ETF)

JPM and FAZ (3 x Levered Inverse Financial ETF)-- If ever my intermediate-term technical setup work has doubts about upside continuation in reaction to tomorrow's earnings in JPM, it is the current situation. With Momentum pointed straight down after failing to confirm JPM's 4/01/24 ATH at 200.94-- which by the way, marginally exceeded by optimal upside target zone of 193 to 198-- the price structure has rolled over a bit, AND as we speak is pressing toward a test of the dominant Oct-Apr up trendline that cuts across the price axis in the vicinity of 192.50 today, and if violated, will point JPM toward a full-fledged test of its sharply up-sloping 50 DMA, now at 187.30. 

My preferred scenarios argue for a sell-the-news reaction to earnings, which means that a positive reaction to the news will be unsustainable and will lead to a reversal toward a test of the 50 DMA, while a negative reaction will trigger a B-line lower to test the MA. 

Only some very bullish outlier item that emerges from JPM earnings or a Jamie Dimon comment will enable JPM to sustain strength that propels the stock to new ATHs. Last is 194.73... 

Let's be clear-- I am not suggesting anyone short JPM into earnings. Playing earnings in either direction most of the time is a coin flip in any case, but my work suggests strongly that the near-50% vertical assault from the Oct. 2023 low to the Apr. 2024 high has the right look and underlying technical short-comings indicative of a dangerous setup for the bulls.

FAZ-- Meanwhile, the recent pattern carved out by FAZ (see attached chart) indicates that its has put in a near-term bottom that projects a recovery rally to challenge 11.30-11.70. Depending on the behavior of JPM (BAC, C et al) FAZ could extend its recovery rally projection into the 13.30-14.50 major resistance zone thereafter... Last is 10.93...

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