S&P 500

I've gone in little spurts to put a blurb or so about the market.  Since I looked at BIDU and a few ETFs, I've just gotta look at the S&P, which is also another chart I love.

Isn't this a beautiful chart?  It is gorgeous.

Do I see the S&P going to the near 1600 range?  That's only about another 300 points away.  We're about 1/2 way there from the 200 EMA.  It just hit overbought in RSI and it would be poised to pullback some, so that would not be surprising.

If we look at RSI, this peak was reached in the late 2007 timeframe.  The market often likes to do what it's done in the past, so pulling back right here would totally make sense.  MACD is reaching it's high of that in 2004 and 2010 again. 

From the 666 low in 2009, it's nearly doubled that and only had one pullback of 200 points. 

Looking back at the first time the S&P 500 nearly hit 1600, it had 5 short pullbacks, then it just couldn't get up the umphf to keep going and finally conked out.  It took 8 months going sideways before the market decided it couldn't go any higher.

The 2nd time it rallied to near 1600, it had about 5 longer pullbacks also.  After this 2nd time to the near 1600 mark, it took 8 months going sideways before the market decided to drop.  Hmmmmm.  Interesting, isn't it?

So far in this 3rd time going to 1600, it's had one very short pullback at the end of 2009 and one first 1/2 of 2010.  That's 2.  Three more pullbacks before hitting 1600? 

Here at 1310 would be a great place because it's done this before in 2006 & 2001.  That would be pullback 3.

1440 would make a good 4th pullback.

1520 would make a good 5th pullback to attempt to rally to 1600.

The channels I've drawn on my chart make a lot of sense to use as support & resistance.  What do you think?
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A BIDU Options Order

Okay, I just decided to put a practice trade in, since it's been quite some time.

BIDU may have a pullback some, so I'm going for this. 

Buy Feb120P @ Market as long as it's < $118.25 or > $117.
Sell @ Market < $112 or >$119.51.

Let's see how this goes.  It's less than 2 weeks to Expiration Friday.

I notice there are also Weekly Options.  I don't know what that is, but I did not go with those.  Will have to do a little research to see what those are.  I notice the prices are a little less expensive than the regular options.
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Can We Push Higher?

So how does this work?  How does a stock decide it wants to keep going higher as opposed to decide to go lower?

I heard once a stock stops going higher when it starts going down.  Well, duh!

RSI is something that I love to us, with a period of 7.  There is no indicator that is 100% proof.  I do use RSI in conjunction with Volume, MACD, the moving averages. 

What I've noticed is that although RSI can be trending down, it does sometime take time for everything to jive with each other. 

In the middle of Sep'10, BIDU begins to rally (daily, 1 yr chart).  The stock pushes high, RSI is trending up and not in overbought area, MACD is bullish, and the stock is above all my EMAs (10/20/50/200).  That is bullish. 

However, you cannot get any higher for RSI than 100.  When you're pushing really close to this, you need to really watch out for a pullback.  Such was the case with BIDU.  There is some heavy selling, but the stock doesn't pullback much.  The stock basically remains above the 20 EMA, RSI drops, MACD weakens, and the stock really attempts to rally.

It will often attempt a number of times before it just gives up.  BIDU, however, doesn't give up for long before it rallies again.  I've found that BIDU likes to often work in rounds of 3-5, either up or down.  Each iteration up or down is another time to get back into the game.

Here's what a stock will do -- I think I can, I think I can, I think I can . . . and if there's enough steep, it'll keep going, or take a little rest before it keeps going.  Other times, it's just way to hard and it will come plummeting down.

Can we push high?

BIDU - I Love You

I guess I just broke one of the rules of trading, right?  One should never be in love with a stock, but how could you not for BIDU?  I'm Chinese and this is an exciting stock that is a mover and a shaker.  But, I'm also an American and it trades on an American Exchange.

This stock just LOVES to go up.  As one looks at the volumes in terms of trending, the past 2 yrs this stock has been losing volume.  Granted, it's still trading monthly around the 300,000 million average for the past 2 yrs.  It's about trends, though.

Volumes are decreasing and the stock pushes higher.  RSI has a slight trend towards the downside.  Though they just had an earnings report and the stock has pushed the highest it's ever been, my bets are that a pullback are in order, probably to fill the gap.

RSI, Bullish Volume, MACD are all signalling to me bearish.  RSI is in overbought territory.  A real pullback is in order, but, of course, I can always be wrong.  That's the thing with trading, you can always be wrong.

I'm still on a trading break, but since my charts were up, I figure why not look at least one stock - my favorite, BIDU. 
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ETFs - Regional Bank

A friend of mine asked me to look up 3 regional bank ETFs:  KRE, IAT, RKH. 

This isn't something I'm normally interested in and not that I would be here either.  All three are in compression and ready to breakout either up or down.  The only way I can see any of these banks breaking to the upside is some major news.  Since I haven't been keeping up with the news, I have no clue.

Of these 3 ETFs, I would choose RKH mostly.  It has the most movement and seems a little less boring.  The one I would choose the lease is IAT.  Yawn, yawn, yawn.
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