I bought some SKF today after being stopped out of DUG to hedge my longs. The low volume in the market made me believe this rally would not follow through. In addition, the difficulty of S&P to test 870 looked like a good entry point at the time, Figure 1. Citigroup was also struggling to break \$7.00 even though S&P made a slightly higher high. So I was worried about taking a hit for my longs if we're to go down from here. That's why I made a position in the ultrashort. SKF looked good because \$150 seemed like a good support and the financials are the banes of this crash so far.
In hindsight, even the channel on SKF, Figure 2, shows we are in a downtrend for SKF, so up for the market.
I picked up SKF at 14:28 and was stopped out at 14:54. The reason for my exit was C breaking above \$7 and then kept on making new highs. My mental stop was at \$145 too. I kept myself out for the last hour promising that I would not enter short again unless C can stay below \$7. That never happened and C closed at \$7.05.
[caption id="attachment_936" align="aligncenter" width="500" caption="NYSE/S&P internals"][/caption]
[caption id="attachment_937" align="aligncenter" width="500" caption="Ultrashort Financials"][/caption]
: http://traderpau.files.wordpress.com/2008/11/2008-11-26-spxintra1.png : http://traderpau.files.wordpress.com/2008/11/2008-11-26-skf.png