BIDU Update

If you are long BIDU on calls for a short term trade, this is a tough call. If you are short via equities like the core BIDU short this is an easy call, if you are looking for a put position (we closed out the last put position opened on 8/16 for a great profit and have been waiting for another set up), then it's just about letting the trade come to you and see if it does or not.

Here's how we look. Keep in mind, we are now out of the month of August so monthly window dressing is and has been a done deal, we still have Q3 at the end of September and I think for the funds that allow it mid year, the redemptions will be coming in.

 In and/or above this yellow area is where I'd consider a new put position, the reason is it creates a higher high and some retail will buy that. If we don't get there, it's hard for me to justify a put that isn't giving me a reduced risk position and higher probabilities on a head fake move, I'd rather just hold the core short and look for other opportunities.

 Short term if you have a call, I don't like the looks of intraday trade, it's very flat (often where accumulation and in this case, distribution occur-REMERMBER THAT, they are most active when you least expect it). We are leading negative on a few intraday timeframes.

 2 min

 5 min

 The 10 min "looks" like there's enough juice to take BIDU higher, the things we have to consider include fund positioning, how the divergences are moving, etc.

 The 15 min is in line, the positive divergence never made it here so the move was capped, I never expected a huge move from BIDU.

Hourly, this is where I think the top of the counter trend bear rally was.

The real question is whether the intraday timeframes are seeing distribution and they try to push BIDU higher to distribute more, it may not happen today OR whether the natural progression of a divergence is taking place as the short timeframes turn first and they work their way to the longer ones like the 10 min that is still positive and the 15 min that is still in line. This makes BIDU very difficult from a long perspective right now, if this weren't the first day of a new month I'd lean toward holding BIDU, but being the first day of a new month, positioning in Hedge funds may turn aggressively negative. I'll keep watching for signs and post them.

"IF" I had any profit in BIDU long, I'd consider taking some off the table and lowering my risk, waiting for a better set up that is more in line with the bearish nature of the stock.