1/26 Daytrade

I was a John Thain hater until I saw the CNBC interview. Here's a recap:

http://news.yahoo.com/s/ap/20090126/ap_on_bi_ge/bank_of_america_thain_1

He was actually very honest and straightforward with his answers. The $1.2MM for the remodel is still bad judgement but it looks like Ken Lewis was out looking for a scapegoat. He definitely needs one after his blunder with acquiring Countrywide and then jumping the gun with Merrill.

BTW, anyone see this ugly incident over the weekend?

http://rivals.yahoo.com/ncaa/basketball/blog/the_dagger/post/Please-note-that-Chase-Budinger-s-face-is-not-a-?urn=ncaab,136602

I guess it's easy to get away with this type of behavior when the coach endorses it by saying the referees misinterpreted the incident. Aubrey Coleman issued an apology today through the athletic department but it was just a PR move by the school. I can't see the guy feeling bad about the incident when the video shows him high-fiving his teammate and laughing as he his leaving the court. Someone said it best, even the UFC, involved in full-contact mixed martial arts, does not allow kick or knees to the head when a fighter is down. With the NCAA, it will only cost you a 1-game suspension.

Anyways, back to trading...

FAZ - I scanned some charts while waiting for my delayed flight this morning. I saw a narrow range develop in FAZ and entered when it broke out as the markets gave up the morning gains. I took partial profits at $61 and closed out the rest of the position as I was boarding the plane. I couldn't exit at the top but am more than happy with a $5 move in less than an hour.

1/23 Daytrades

The bulls did a pretty good job of buying the dip at the open. I'm not sure where we head from here but if I'd have to guess, I'd say we move a bit higher through earnings if they continue to be relatively decent.

POT - I got started a bit late today and didn't see any setups I like. Trader Sloth mentioned the strength in the ferts (POT, CF, MOS) so I kept them on the radar. The only one that setup a very nice narrow range was POT. Defining a stop placement was easy and once the market started rebounding, I picked up some shares on the breakout. I sold half for $2.00 profit and using the 5-SMA and 5-min bars to trail my stop, I got triggered a bit later as the rally faded.

1/21 Daytrades

I watched a bit of the Geitner testimony today. My favorite Senator is Jim Bunning of Kentucky. This guy pulls no punches and tells it as it is. He ripped into Paulson and did the same to Geitner today. He also didn't back down from the Chairman of the Finance Committee when the Chairman told Bunning he had plenty of time to review the confirmation materials.

http://www.upi.com/Top_News/2009/01/21/Sen_Bunning_grills_Geithner_on_taxes/UPI-50441232567176/

Another comment I liked from one of the other Senators was that since Geitner got a "pass" for this tax situation, he should order the IRS, when he's confirmed, to give the rest of the country a "holiday" on taxes to be fair. I like the new President's quick moves to clean up the oval office with caps on salaries and tight restrictions on staff dealings with lobbyists. However, his nomination of Geitner is too close to the old Boy's club. Geitner played a role in all of Paulson's decisions and we all know how that turned out. BTW, the worst decision in 2008 was Paulson letting Lehman go under. He wanted to protect his buddies at Goldman and JP Morgan who had $50-100 billion in counter-party risk. Instead, the rest of the country paid in Trillions as the markets lost all confidence in the capital markets and everyone feared that the government may let anyone go under.

Alright, enough politics. The markets continue to be the daytrader's dream. The wild swings are fun to watch and agonizing to trade if you are not on the right side.

SKF - I continue to stay with SKF. I used the same set-up as Friday. With the markets up and yesterday's huge down-day, I watched and waited with the 15-min charts for a trend reversal. SKF traded below the moving averages and rebounded to test the moving averages. Once the test failed, I shorted @ 183.50 using the 20-SMA as a stop point.



I switched to the 5-min charts for entry. SKF dipped to 173 and rebounded back to 176 so I placed a buy order (to cover) @ 173.50 which triggered a bit later for an even $10 profit. As you can see, sometimes you win and still feel like you lost. Had I continued to manage my stop using the moving averages, I could have picked up another $20+ on this trade...oh well.

GS - As the Dow rallied 100+ and held, I entered GS as it broke the narrow range above $65. I used the 20-sma as a stop and managed this trade with a lot more patience. I sold half for $2+ profit and closed the position on the other half towards the close. Similar to the SKF trade, this set-up was all about probability (break of a narrow range and/or break of the moving averages) and managing risk using the moving averages.

1/16-1/20 Daytrades

Wow, what a bloodbath in the markets. It definitely didn't look good for the bulls when the markets barely flinched during the inauguration. The street appears to be pinning a lot of hope on Obama to make something happen. If he can't work any miracles, we're going to break those 2008 lows.

I've been mainly focused on the inverse ultrashorts. These are like a combination of the VIX and a particular sector. In the case of the financials, we get both the weak sector and the fear factor playing out in SKF and FAZ. These are good short-term trading vehicles on the way up AND on the way down. Make sure you're on the right side...! :)

SKF - I didn't do much on expiration day. Fading the gap at the open would have been great but I was too groggy at the time. I stuck with SKF hoping for some wild swings throughout the day. I picked up some Jan 160 Puts as SKF broke below the moving averages and ran back up but couldn't break through the 162 level with conviction. I sold after a few bars for a couple bucks on the Puts. A bit later, as all the premium dried up, I picked up Jan 165, 150 and 145 puts as SKF broke through support around $156. I picked up $4+ on the Jan 165 puts. The jan 150 Puts were up over $1 but I had to sell at breakeven as SKF rallied back to 20-SMA. I let the 145 Puts expire for $0.30 loss.

SKF - After the huge gap open today, there was no reason to chase the stock. I waited for consolidation around the moving averages where I was comfortable with a stop placement. I entered a bit after midday at 180.50 with a stop below the 20-SMA which was never violated. I had a sell order that triggered for an even $10 gain.

1/15 Trades

Found some time to place a couple trades. This strong rebound off the lows is a great opportunity to leverage options into expiration tomorrow. I'm focused on the beaten-down high fliers:

CME - Bought Jan 170 Calls
GOOG - Bought Jan 310 Calls

UPDATE - Caught the rally too late...stopped out even on both. Hopefully the volatile swings continue tomorrow. At-the-money options are going to get even cheaper.

1/6 - 1/12 Trades

After initiating those positions last week, I got busy at work and also caught a cold while traveling. I'm slowly getting over the cold now and hope to put on a few trades for this week's expiration.

BUCY - I used the opening strength on 1/6 to unload half the position. I was stopped out the next day as the rest of the market started the recent sell-off.

BUCY - I had a target of 23 for this one which was the last high in mid December. I used the opening strength 1/6 to unload the position. I normally would have held half but I had a pretty decent position and just wanted to lock in the gain on this one.

SRS - I got stopped out at $51 and have not re-entered. I'll probably focus more on SKF as SRS has been very choppy lately with rumors of government help in the commercial real estate sector.

LVS - I managed a $1 profit on half of this one on 1/6 as well. The rest was stopped out at break-even last week.

Kicking off 2009

Hope the holidays were terrific for everyone! I traded lightly and caught a few good moves here and there but also executed horribly on a few good setups. We've moved upward quite a bit over the past week and are probably due for a slight breather. I'm near-term bullish given all the bullish technical charts and cash that has been sitting on the sidelines the past couple months. Poor earnings will probably be the next catalyst that takes us back down. I'll be managing my trades as swing positions as the work/travel schedule beckons for the next couple of weeks.



OIH - I scanned a bunch of charts last week and they all looked like OIH below....bouncing off support, narrowing moving averages, rising MACD/RSI/OBV. I picked up Jan 75 Calls to give myself some cushion in case the low-volume moves were sold off in January. At least that was the plan. Instead, I woke up on Dec 30th, switched to the 15-min charts to manage my stop and was stopped out at the low of the day. I profitted on the trade but that was 12+ points ago.

BTU - After the OIH debacle, I didn't want to chase the moves so I pulled up some beaten down names that could participate in the second leg of a rally. I picked up BTU Jan 22.5 Calls around $24.50.

BUCY - I picked up Jan 20 Calls around $20.00.

LVS - I picked up Jan 7.50 Calls around $6.90.

SRS - I also picked up SRS around 52.50. It is forming a potential double-bottom around $50.00 and I like the strength it exhibited during last Friday's rally.