Saturday, May 13, 2006

Over Priced --- BIDU

BIDU (, Inc.), Inc. operates as a Chinese language Internet search provider.

Its closing price of 5/12/06 is $78.51.

Even with the latest good earning and good potential, its price is still too high. It is a short term down play target.

My suggestion: Sell (3)
Instruction: It is a short time target and very risky one. Don’t be greedy when you play it. Cash your gain at every predefined price level.

Tuesday, May 09, 2006

Bet on the Oil Price --- USO

USO (United States OIL FUND ETF)

USO is a domestic ETF (exchange traded funds) designed to track the movements of light sweet crude oil. You can pretend it as the oil price in the stock market.

If you believe the oil price will go up later, then USO probably is a good candidate.

Because of its nature, USO is for short and mid term player primarily. Its closing price of today, 5/9/06, is $68.40

My suggestion: Buy (7)
Instruction: Because the oil price is very volatile, you should not hold this ETF for long time. The typical play is that once the oil price reached your target, you sell it; when the oil price dropped, you buy it back. You should always check your get in point.

Monday, May 08, 2006

Weekly Review (5/1/06 – 5/5/06)

Fed meeting, Interest rate

For the week, the Dow surged 1.85 percent, the Standard & Poor's 500 index gained 1.16 percent and the NASDAQ climbed 0.86 percent.

The economic data helped the Dow reached a 6 years new high. With the high price of gold and oil, the movement is very impressive. Meanwhile, the NASDAQ just had a “mild return”.

The coming week won’t have much economic data released, but the Fed rate meeting. The Fed meeting will be hold on Wednesday. It will announce its decision at 2:15 PM.

A lot of people have thought the Fed will add another quarter point already. If the Fed would not increase the rate, then it will be a big surprise, and the market will be over whelmed. Otherwise, the market will not be stirred much by the Fed decision.

If you notice the change of the past month (4/6 to 5/5), you would see that the Dow has increased 361.24 or 3.22%; but the NASDAQ has decreased 18.6 or -0.79%. A bull market has a general rule, which is NASDAQ should run faster than the Dow. Now what we have seen is the opposite. It makes me a little bit uncomfortable about the market movement.

Because their different, the NASDAQ still has the need to go up; for the Dow, I am not sure still.

The oil is the uncertain factor still. If the oil price increased on Thursday or Friday, we should see some impact on the stock market.