Set FAZzers to “Done”

While not a student of the markets as much lately, I am a student of StockTwits.  I pore over the stream all day every day and today noticed something.  Conversation in the Inverse ETF’s such as $FAZ and $SRS has virtually stopped.   Below is a tag cloud of the most popular tickers on StockTwits today (click to enlarge):

$FAZ and $SRS, two of the more popular Inverse ETF’s are nowhere to be found.  Compare this to a visualization of the top tickers on StockTwits for 2009 (where they were some of the most popular:

Since there is a major relationship between tweets and share volume, one would expect the volume in these ETF’s to have dropped as well.   This is indeed the case:

While some of this low volume is due to the holidays, volume is clearly slowing down compared to what it was this summer when people were “FAZ-zing their faces off”, as The Fly would say.

During the entire summer the bears were feeding the bulls through vehicles like $FAZ and $SRS.   This is the first real evidence I’ve seen that the bearish euphoria is waning.   Is this bullish or bearish?  I’m not quite sure.

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  1. 1 Tuesday links: short suffering Abnormal Returns

    […] Traders have stopped talking about the inverse ETFs: FAZ and SRS.  (Zero Beta) […]




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