FAS is the Direxion Financial Bullish ETF with 3x leverage and not for the faint of heart or slow of reflex. With the beta jacked up this high it would seem that finding correlated pairs with good linearity might be something of a challenge. As it turns out, there are a number of lower beta pairs that do produce consistent signals with surprisingly smooth equity curves. As might be expected, there’s more short term drawdown than seen in lower beta unleveraged PDQ models but the returns can be impressive if you ride it out. The signals indicated were produced by Wednesday’s run after the close so all Long signals have – (0) Days In noted. It’s useful to revisit this model every day to validate the signal and assess any changes in potential risk exposure.
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