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.