Buying and Sellng Extremes: The SKF Trade

My strategy over the past few months has been to be patient and wait for extreme conditions to surface before making both long and short entries. A good example of this type of trade is the SKF position I entered yesterday (detailed in the trade report).

Here are my entry notes with chart:

I took one “low risk speculative” trade today, shorting financials via SKF. The inverse ETF has dipped down to a strong area of support, making it a low risk entry. I bought 100 shares at $103 and have a mental stop under support at $97-98. I will likely take partial profits if it bounces to $110, and then again at $120.

If the market continues to rally, I’ll lose a minimal amount. However, if it pulls back, this could be a very profitable trade. For those looking to take this trade, I probably would not enter above $103-104. As price moves higher, risk increases.

I took partial profits today at $111 and moved my stop up to entry level, effectively locking in today’s profit. My final target is $120.