Tuesday, April 22, 2008

BIDU Speculators

When I first looked at the optionsXpress trading patterns (“People Trading ___ Also Traded ___”) function back in September, I certainly did not expect that it would become a recurring feature on the blog.

I did, however, have the good fortune of selecting Baidu (BIDU) as my example stock and came up with a good list of speculative companies – all of which were taken to the woodshed at the end of October and sold aggressively over the past six months or so.

Here we are in April and the market has put in a provisional bottom and lo and behold, BIDU is up over 70% in the past month. So, I asked that same rhetorical question once again and optionsXpress was kind enough to oblige me with a list of companies that BIDU speculators have been pushing up over the past month. [All optionsXpress customers can do the same for any security by going to the Quotes tab, clicking on Quote Detail, then clicking on the People Trading… link under the chart on the right.]

There are no real surprises on my end this time around, save perhaps the inclusion of two financial plays, MER and XLF, though it is interesting to see how the list has changed since the last time I did this, which just happened to be on October 30, 2007, at the time the markets were peaking.


Chart Pig said...

That's really interesting about the Bidu speculators, Bill. It would sure be timely if it is correct. My only concern about if it will *work* this time is because of where we are in terms of the over all market at present. Is the S&P 500 similar to say Aug. 23rd, 2006 area and we are coming off a bottom, or is it more like Jan 31st, 2001 area and we are about to continue down a slippery slope? I just can't figure it out and I guess that's kind of the million dollar question right now. Any ideas?

Bill Luby said...

Hi Randy,

That is the million dollar question, indeed. Unfortunately, I don't know whether the March bottom will turn out the be the bottom, but with each passing week my confidence level that the bottom will hold is going up. If we get through another week or so of earnings without too much in the way of uglier than expected news -- and if the financials continue to repair their balance sheets -- then I am guardedly optimistic.

For now at least, it looks like a sideways market to me (unless you are in energy, agriculture, etc.)



Anonymous said...

I trade EM rates and currencies and it seems to me that the market is looking to add risk at this stage. It has caught me a little by surprise as with rates heading higher in those currencies (to combate inflation) I was expecting an exit of the currency. Any thoughts on volitility going forward?


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