2/20 Daytrades

I wanted to try and post real-time today but the action was just too fast and furious. Expiration day continues to be my favorite day of the month to trade. Premiums dry up so you can trade the big movers with limited risk and potential for big gains. Many traders take options expiration day off due to the volatility. If you're a daytrader, that makes no sense, especially with options where you can control your risk.

Today, you can just sense the fear in the market. BAC/C were getting whacked. I went with the weakness early on and then bet against it as the panic-selling built up.

SKF - This was a big winner for me back in November and again today. My first attempt @ 204+ was stopped out. After peaking above $210, I went back into the Feb 200 Puts which were only trading $1.oo at the time. As I've mentioned previously, the key on expiration day is to continue position-sizing as usual. If you normally risk $1000, then risk the same. In today's case, with the dried up premium, you'll probably be able to pick up twice the normal position for the same amount of risk. In my case, I had 3x the amount of calls at $208+ than I had at $204. The market averages started strengthening, RSI/MACD declining and a narrow range developed for risk-control. I took partial profits at $196 for $6.00 profit. The oversold bounce got me emotional so I set a limit order for $10.00 to close out the position at around $190 for $9.00 profit. The range for these puts were $0.45 - $18.20 so I definitely left a lot on the table but am still happy with the profits which easily offset the hit I took with the UYG Calls.

FAZ - I traded the market weakness with FAZ early on. A narrow range developed and I entered @ 78.50 on the break of the range. I took profits at $81.00 when the RSI indicated overbought conditions. I highlighted the same exact set-up later on in the day. I was too distracted to trade this but the set-up is the same....break of a narrow range in the direction of the market momentum. The narrow-range allows me to easily define a stop point.

GS - Here's a trade I mentioned on a chatboard that I chickened out on. During the panic selling midday, I noticed the potential double-bottom on GS. RSI and MACD were both diverging. The GS Feb 80 Calls were trading $0.95. With a stop at $79.00, the true risk was proabably only $0.50. That would have been nice for $5.00...

2/11 - 2/19 Day/swingtrades

Anyone want to buy a few hundred UYG Feb 3 Calls?! Barring some overnight BS like back in October, I'll be left holding the bag on those calls as they expire tomorrow. Alas, I had high hopes for a market rebound but the trend is still down. My only consolation is that I capped my loss with the Calls vs. the stock. Looks like this market will continuing drifting lower. The problem with all these attempts by our government to stabilize the markets is that the window of opportunity has come and gone. The market won't rebound until we start to see the economy stabilize which won't happen for at least another 6 months. In the mean time, no one wants to put their money to work. Every day the market drifts lower, middle America will continue moving to cash. It will take a significant intervention for those same folks to think, "We'll be okay. After losing over 50% of my account last year, I think stocks are the best investment now...". Fogettaboutit!!!

I've been in daytrade mode the past week. FAZ has been the vehicle of choice with a few trades in POT. I've included the POT trades but the FAZ trades are too many and the chart would look pretty messy:

POT - I started yesterday with POT Feb 60 Calls as it broke the opening range. I took partial profits on the first spike and closed the position on the second spike when the momentum tapered off into the close. However, I decided to go with OTM Feb 85 Calls for an overnight which didn't gain that much despite the gap open due to the high premium on the calls. Later today, I picked up puts when the market traded lower and POT could not hold the 84.00 support level.

AZO - How the heck is this pushing a 52-week high? I guess Eddie Lampert is doing something right. Actually, autoparts generally do good during recessions as everyone would rather save money and fix up their clunker than splurge on a new hot rod. I would not look to short this new leader here. Any short-covering rally and this will be the first to sky rocket.

ESI - This was the options expiration play of the day. I wish I took this trade. The Feb 120 Puts traded in a range of $1.00-15.10. I'll be looking for these types of moves tomorrow if the market falls apart or has a huge rebound.

2/10 Day/swingtrades

I came into the day expecting "sell the news" but I didn't think we'd go that far down. There was basically too much anticipation for Geitner's plan. The only thing I got out of his speech was that he needs practice using teleprompters and not making it so obvious. How about that follow-up interview, why can't he look the interviewer straight in the eyes instead of tilting his head and eye-balling him? If he is going to play a big role in the new administration's economic recovery plan, he better step up his game a few notches.

As for the markets, I actually think it was more of a trader's sell-off. Basically, we've moved quite a bit since last week so there really wasn't too much of a base to hold onto. At least that's my thinking since I'm left holding the bag on those UYG calls. I'm going to stay nimble the next few days and go back to daytrading mode...long or short, wherever the markets take me.

USO - This is still trading pretty sloppily. I moved my stop up on that gap open and it triggered a bit later for $0.20 slippage on the calls.

OIH - I got stopped out of this one as well for $0.30 on the puts. Looks like yesterday's double-top was definitely the time to sell.

2/9 Day/swingtrades

POT - Another strong move at the open. POT started weakening midday so I unloaded the remaining Feb 95 Calls around $94.15 as the RSI/MACD were declining and the second attempt at $95 failed. Too bad I did not flip to puts at the same time...that would have been a great follow-up trade. POT has made a monster move the past week and was definitely due for a breather.

OIH - This was also looking pretty good this morning. Unfortunately, I forgot to pull up the daily and check for potential resistance levels.

I ended up exiting the calls after giving up about $3.50 on the stock and re-entering later in the day. We'll see tomorrow morning if that was a wise decision.

BAC - B of A showed some nice strength at the open. However, it was sitting right at the 20-SMA which acted as resistance for most of the day.

I tried pyramiding @ $6.91 as the moving averages inched up but was later stopped out of Friday's and today's position @ 6.84. This one probably needs a breather.

USO - The action on this is boring but better than losing money. I'm still holding.

UYG - Still holding. I'll either unload or add more pending tomorrow's reaction to Geitner's plan.

2/6 Day/swingtrades

BAC - This one has made an impressive move off the lows from Thursday. My entry was late as BAC broke out of its morning narrow range. The key to this setup is the position size. If my entry was in the $5.70 area, I could have position-sized for $0.20 risk. Instead, I ended up position sizing for $0.45 risk which was still decent but not great. With the Dow up over 200, I got a little greedy in the afternoon and instead of selling at $6.40, I ended up unloading half @ 6.20. I'm still carrying half the position.

POT - I picked up some shares for a daytrade as POT broke out of the declining channel. I set a $0.50 trailing stop that triggered awhile later @ 91.75.

SWINGS

POT - I'm glad to see the strongest daily chart I put up on Thursday was the strongest mover of my holdings. I used the opening strength to unload half my position. Later in the day, POT stalled at that $92 level so I closed out the Feb 90 Calls. I picked up about $3.50 on the Feb 90 Calls and $2.50 on the Feb 95 Calls. I'm still hold half of the Feb 95 Calls from Thursday.

OIH - This held up pretty well and started rallying midway through the trading day...still holding.

USO - This was definitely the laggard for the 1st half of Friday. Then, there was that sudden spike above $29 before settling back at $28+. I'm still holding.

UYG - Feb 3 Calls are looking good. Volume/open interest picked up on Friday so the premium has edged up a little.

2/5 Day/swingtrades

I was definitely trigger-shy today. An hour into the trading session with the Dow down 110 points, I looked at my trading screen and most of my watchlist stocks were green...divergence. I then thought that Thursdays have usually been turnaround days these past few months...experience. Well, the markets reversed and did so quickly. I had an opportunity to pick up GS and POT before the breakout but my limit orders worked against me...mistake. I ended up trying to chase AAPL late in the day as it consolidated in the $96.50 area but got stopped out a little while later for $0.40 loss. I did decide to swing some out-of-the-money calls on the energy sector late in the day. Check out the charts. It's been a month since I had this many overnight holds so we'll see if there is any bullish follow-through tomorrow.

POT - This looks to be finally breaking out of the most recent channel. MACD/RSI/OBV are all rising. If we can get some cooperation from the overall markets and economic news, this one has plenty of room to run. I went with Feb 90 & 95 Calls.


OIH - This chart is not as strong in terms of all the indicators lining up. However, I like the volume the past 2 days. For this, I went with Feb 85 Calls.

USO - Definitely the weakest of the charts, I'm hoping that I end up catching USO at the bottom of the channel. 28 appears to be decent support. I picked up Feb 25 Calls.

UYG - I was a bit nervous this morning as I watched UYG drop to $2.85. This was below my intended stop level but the Feb 3 Calls were still carrying $0.35 premium. I normally would let myself get stopped out and re-enter but I'm carrying a large position and the $0.05 bid/ask is a decent amount of slippage. I was losing $0.05 for every $0.15 drop in the stock so decided to give myself a bit more room. Luckily, it rebounded and I'm still carrying the position.

2/4 Daytrades

FAZ - I picked up shares as FAZ broke above the moving averages which also coincided with the Dow going negative. Stop was placed at 48.80. I took partial profits near the top of the first spike which coincided with a fib retracement. I closed out the position later on as the RSI showed overbought conditions. I should have used the MAs to trail my stop, which would have kept me in the trade for that explosive move to $54+, but the conditions were a bit too choppy today.

GS - As the market averages continued to weaken, I picked up some GS Feb 110 Puts as it broke below of the narrow range/support area around 88.00. I took partial profits @ 86.11 as the RSI indicated oversold conditions. I was later stopped out of the remaining position as GS rebounded late in the day.

1/27 - 2/2 Day/swingtrades

Below, I highlighted a few daytrades that I took over the past week. I'm also carrying a position in UYG Feb 3 Calls. I started buying last Wednesday as the market rallied. This is a speculative trade on the assumption that the new President will not let the markets fall much further. Based on the holdings within UYG, I think the downside is limited at this point. I'll close the position if UYG dips below 2.95.

AAPL (1/28) - As I've highlighted before, I like using the opening-range high/low for entries/exits. These points indicate pre-open support/resistance levels that play out through the remainder of the day. AAPL gapped open and consolidated for about an hour. I entered shortly after the break of the opening range high with Feb 70 Calls. I almost sold out on the first dip below the 20-SMA (93.5) but held based on the market strength. I later exited at the highs of the day on the double-top. The declining RSI and MACD clued me in that the 2nd attempt at 95.00 would not hold.

FAZ (1/30) - I didn't see too many good setups last Friday. So, I waited around for FAZ to consolidate around the moving averages to give me a reasonable stop placement. I had a buy-stop trigger above 50.50. I sold a little while later towards the close when the doji developed on the 5-min chart.

FAZ (2/2) - I've highlighted this setup before...FAZ crossed the moving averages and retested them for support. I entered as it bounced off the MAs and quickly pyramid, using the 20-SMA as a stop. I sold half as FAZ printed 2 red bars and bounced off the 10-EMA. The markets were choppy and I wanted to walk away with some profit. With that out of the way, I set the stop at 52.00 for the remaining half and closed out the position when it hit $2.00 profit on the initial entry.