Many ultra shorts have a natural drip on them. As in poker it's like a rake. Look at a long term chart of FAS and FAZ. They are triple long and shorts of in finacials. Look at a 1 year chart of fas and faz, you would think if one was up 40 percent the other would be down 40 percent, BUT one is down 18% and the other 35%. My point is down go long ultra etfs. Better to go short IMO>
All these ultra funds, short or long have a rake. They cannot follow 2x or 3x for more than a few days out. BTW, Friday's close was strange, DDM popped on 100 shares from 66.97 to 67.21 at the last second but the bid/ask was 66.97 and 66.99 Something took it up artificially. Shorts watch out Monday all this free money is driving up the DOW.
I did a quick correlation analysis on the following: FAZ, FAS, DXD, DDM, SDS, DJI, S&P500.
The results were interesting to say the least. The FAS and FAZ are just awful at tracking the market. The correlation coefficient is below 0.4 versus the Dow or the S&P. That means they are tracking / reflecting less the 40% of the change in the indices.
The DXD, DDM and SDS were all above 90% versus the major indices.
IMHO, the FAS and FAZ are very poor ETFs to utilize to track or trade the market. The other three do a much better job.
BTW, Davenport was correct with the DXD. You can get an 8x hedge and have money left over.
Thought you might like to know. Not all ETFs perform as advertised. That should not surprise anyone.