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.