Monthly Intraday Charts for SPX and SSEC: 2012-03

This is a monthly series of intra-day charts for S&P 500 (SPX) and Shanghai Index (SSEC) for Mar. 2012. 

SPX

SSEC

SINA higher lows

After an 8 month downtrend that brought down SINA a whopping 66% from 148 to 48, SINA is forming an uptrend that lasted about 2.5 months by making one higher lows at 61 about 1.5 months after early Jan bottom at 48.  It's now testing upward trending 50 DMA at 68 with no special bad news, therefore it's a high probability bet that this test will result in another higher low at 68 and leads another leg up.

Downside Risk: LT trend is down, it's not clear how much higher this reflexive counter trend up leg will go.

Time Series analysis: given the previous down leg lasted 8 months, this counter trend could last 5 months which means it will end at around late May or early June.

Another note is that SINA's shape has almost followed China Shanghai Index (SSEC) like clock step.  This prediction can be applied to SSEC with a high probability

Probability of another leg up up to late May: 65%
Probability of a down leg: 35%

AMZN bullish breakout

After 2.5 month 31% down trend, and 2.5 months of side-way trading, AMZN rose 4% today with heavier than average volume with no significant news while broad market is down.

The fact that this rise happens when AMZN hovers around 50 DMA for a couple of weeks and 50 DMA is slightly tilting upwards increases the credibility of this action and the possibility that this action leads a new short-term trend.

On downsides, at 141 trailing PE, it's trading at very high premium; AAPL, the tech sector leader and heavy weight is doing a parabolic rise lately, whose potential fall will lead to a crash in broad sector.

Possibility of a short term trend to retest all-time high $246: 60%
Possibility of a fake-move: 40%

BIDU mid-term prediction

Yesterday's BIDU Q4 earning release did not cause big change in price action.  BIDU is today being rejected in a hard way at downward sloping resistance line with heavy volume.  My most updated prediction of BIDU is that it's currently going through a side-way topping process which will last a few months up to this summer, accompanied by Chinese Shanghai stock index bull market.  In these months, there will be higher lows, lower highs, reflecting transition of power from bulls to bears.  During these months, big institutions secretly distribute their holdings to small investors in preparation for bear market, BIDU's bear market will not start until the complete of distribution process.   The topping process will finally end by bulls giving up control to bears.

My prediction may well be wrong.  But it would be interesting to validate after a few months the outcome given recent reports with contradictory indications:

• Goldman gave $176 PT for BIDU: http://www.webinquirer.co.uk/baidu-com-shares-given-new-176-00-price-target-by-analyst-at-goldman-sachs-bidu/11984/
• Soros lifted holding of BIDU by 170%: http://www.gurufocus.com/news/135034/george-soros-top-5-chinese-stocks-bidu-iss-fmcn-cisg-kh

Monthly Intraday Charts for SPX and SSEC: 2012-01

This is a monthly series of intra-day charts for S&P 500 (SPX) and Shanghai Index (SSEC) for Jan. 2012. 

SPX

SSEC

Short Covering on China stocks while Baltic Dry Slump

Massive shorts covering are happening on New York listed China stocks today, following 2 day strong bottom fishing rally on Shanghai Index.  Indicating the tipping point of Chinese monetary policy turning from tightening to easing has very likely happened. At the same time, Baltic Dry Index continues to slump to historical low levels.

AMZN and BIDU target price

AMZN and BIDU both experienced stellar bullish run since November 2008, however, just like Netflix, stocks go up and down, both stocks have pulled back recently, and the magnitude of these pull backs indicate their bullish runs that lasted for 3 years are over.  For AMZN, it dropped from 245 to 170,  my gut feeling is that it will go sideway for sometime at around 170 price level, then go up to above 200 level, go sideway for a few months, then go down again dropping through 170 towards final price target of this down trend which is 122, I estimate the time of reaching that price target is October - November 2012.  For BIDU, the chart looks uglier, it looks the price target is around 40 level in just a few months time frame.