Caution and patience prevail in the market now that 1490 has again been lost. It’s time for options to expire Friday. I’m expecting more volatility into that.

Financial stocks have been trashed with all the bad news. I’ve traded both SKF and UYG Thursday and Friday. These ProShares ETFs are double-long, and double-short the financial sector.

Thursday, I had a profitable scalp in UYG on the long side. Thursday’s candlestick finally showed some bullish activity, with a close near the day high. Friday brought a quick spike down. C had news, and I was using it as the tell for morning activity. I’ll usually have CNBC on mute an hour after the open. I forget to do that Friday.

UYG gave me an aggressive entry on the dip. With C finding support, I bought UYG. Now about the time C gets near it’s morning high, I’m listening to Pisani on CNBC calling for a bottom in financials. Red flag.

I sold UYG, and went long SKF on the reversal bar of each respective chart.

Note the high volume bar on SKF before reversing.  With the volatility, I felt good taking the profit near 99 in SKF.

This might seem odd since UYG had triggered a buy signal, and even had a higher low pivot on the daily chart. That’s bullish. Moving averages were pushing down though. Buy signals aren’t as strong when that occurs.  My instinct came into play on this trade.

I’m watching for entry in UYG, and thinking the second mouse will get the buy signal that works.

Can you say volatility? The Feds introduction of new liquidity measures sure reversed yesterday’s move down. Trading eroded throughout the day though. How many magic bullets does the fed have left? Someone sharper than me mentioned a scary thought. What happens when foreign oil sellers start demanding euros as payment for oil?

Two IPOs worth trading came out today and yesterday.

CEDU was yesterday’s offering. It had a poor first day, and was due to bounce. With the positive open, it gapped higher. The classic pullback allowed an entry on the first higher high. A second entry occurred over the base break.

The 15-minute chart of XIN had the cleanest chart for entry. Again, a classic three bar pull back, followed by a higher high buy signal. Conservative stops below the day’s low, and partial profits on the way up made these two stocks winners.

With the extreme volatility, I’m taking profits quicker, and cutting losses fast. Yesterday, I let a loss get away from me in RIG. The name of the game is consistency… One trade at a time.