Tuesday, March 22, 2011

3/23/11 Magic Carpet Ride



On a cloud of sound I drift in the night
Any place it goes is right
Goes far, flies near, to the stars away from here


Is there anyone not looking for a downside move? SPX 1350 sounds more like a magic carpet ride. Which is exactly where bear sentiment will take us.

95 comments:

  1. igor- Fidelity slams me with ST trading fees on most of their funds. For some reason, OAKBX is not one of them. In fact, I'm locked out of trading 98% of the funds available to me due to 'excessive trading.' I cannot, for instance, trade FSELX again until 4/1/11. What bullshit.

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  2. Damn, igor- we're on the same wavelength. I traded WAG from 39.03 to 39.22 near the close.

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  3. 2nd - did you consider finding an ETF comparable to OAKBX to make trading easier. A few semiconductor ETF's I monitor are: PSI, IGW, XSD, SMH. Will any of them work as a replacement for FSELX?

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  4. What I refer to as the 'buy-and-hold' account is my 403(b). I have a wide range of choices. But I'm locked out of most of them if I choose to hold less than 30 days. In my trading account, playing SMH is not a problem.

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  5. I should add I'm restricted to one trade per quarter on most of the funds due to ST trading. So the choices open up again at the end of Q1, which is 3/31/11.

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  6. Watch the Nikkei hit 10k by Friday.

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  7. Just picked up a little VXX after hours at 33.59. Looks like a good old Cooper 1,2,3,4 pullback. VXX appears to be carrying $21.50 contracts rolling into $22.25 ($22.75 the following month). So, not much contango to contend with at the moment.

    May risk 0.75 or so on this one. The dollar looks like it will finally hit bottom within the next week or so. Sentiment readings are triggering extremes. 74 will be the absolute floor.

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  8. Natural gas quickly approaching mega-resistance levels. I would expect a breather if UNG approaches 11.75. Then after lulling investors to sleep, its off to the races if/when it breaks the 2-year well-defined downward sloping channel.

    http://www.stockcharts.com/def/servlet/Favorites.CServlet?obj=ID660602&cmd=show[s207384618]&disp=O

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  9. F - Failed the 20SMA retest, I guess it's gonna retest the 200SMA now...

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  10. UNG - That was a really good call, I must say.

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  11. You guys are missing the point- we're leaving Japan/Libya behind. It was just another pullback. Steaming ahead without J6P.

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  12. F- Yep. That one has me puzzled. I'm guessing 'parts problems' from Japan might be at play here also.

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  13. Watching DPTR. Especially on the weekly. I got stopped out recently but looking to re-enter. I read a good analysis a while back saying it was worth something like $10 when you compare its reserves to other nat gas stocks. Will look into it...

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  14. F - I calculate the uranium-catalyst coated pistons should increase the mileage by 10% or so.

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  15. I haven't seen any commentary about GAZ the past 2 days. Its contracts are up around 2.5% the past 2 sessions, yet GAZ is up roughly 10% on 7x volume. Huge disconnect. I'm not sure if it should be shorted or not. In the past, it has crashed after similar disconnects (not nearly this big).

    Its the simple law of supply and demand. Investors have shorted at will the past 2 years, accumulating millions of shares short on an etf that trades about 200,000 shares a day. When they all start to cover, there are not nearly enough shares to buy at logical prices- hence the huge disconnect. Maybe I'll try to short some tomorrow to hedge my UNG...

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  16. I wish I could show you guys a picture of the half naked/pirate outfit Harlan has on now :)

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  17. STZYF.PK - +9% - You'd almost have to be a Kamakazi with a certified death wish to own this one, but it could outrun most of the rare earth sector b/c supposedly their ex-Russian cold war-era mine is already developed, proven, contains the heavy rares, and still within reasonable proximity of China, assuming legend/rumor/etc. is correct.

    The original milling equipment is supposedly there as well, but probably of no use.

    I would never dream of buying a PK stock but I'm gonna try keeping an eye on it just to satisfy my curiosity, might just as well be another P&D POS like so many others...

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  18. Poor 'Ol Harlan. What you're describing is undoubtedly a sign of a very high IQ, I've been told I used to do the same thing but of course I don't remember. ;)

    Is this perhaps related to or beneficial for potty training or maybe he's past that stage?

    http://www.revolutionhealth.com/healthy-living/parenting/toddler/potty-training/potty-training-plan-weekend

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  19. PSGY.OB - Another POS penny stock that makes radiation sensors/detectors...

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  20. Nah...He's already potty trained. In fact, when we have to drive some where, he'll tell you every 5 minutes he needs to go to the bathroom :)

    I need to update a photo.

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  21. UUP - A great vehicle for deducting losses on your cash...

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  22. "he'll tell you every 5 minutes he needs to go to the bathroom"

    That's funny, I used to watch the fuel gauge like a hawk and tell my father we needed to stop for gas about every 5 minutes. Maybe I didn't know how to interpret the gauge...

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  23. I'll catch you guys in the morning. My new diet/exercise program dictates that after 8:30 pst I can only lay on the couch and expend energy changing the channel or reaching for a glass of wine.

    Frankly, I'm not sure how much longer I can put up with this.

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  24. Damn Mark, I hardly recognize you anymore since you've been on your diet.

    Judging by the color of your urine though, I'd say you don't have much longer to live so you may as well think about taking it easy.

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  25. Howdy Mark-

    I'm still in China but should be back in the States in a couple of weeks.

    Per Sentimentrader-

    "....confirms what a couple of the other studies have suggested over the past couple of days. Namely, mini-panics like last week tend to see a re-test of the low over the next 1-3 weeks, but higher prices thereafter. And the strong breadth thrust off of the low (three straight days of at least 65% up issues on the NYSE) tend to lead to very positive three-month returns.

    So we have some decent evidence that we should see some shorter-term weakness, with no more than about a 3% drop below the recent low, then very positive 1-3 month returns."

    By the way, the dollar is seeing extreme sentiment readings similar to natural gas early last week. Maybe a 1-3 week dollar spike to relieve the negative sentiment thus coinciding with a market downturn? That of course would be followed by further weakening of the dollar and a resumption of the dollar-induced market uptrend.

    Nothing goes down in a straight line forever.

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  26. Sold my VXX pre-market for a few pennies. Although I think it'll go up, I just see too many awesome setups that are being rewarded. I wanted to pick up REDF on its awesome base, but that took off. I wanted ROYL, but that took off. Wanted CHNG, MOTR, RAS, CHGS, SHZ but all took off on me.

    I re-entered DPTR at .90 pre-market. Since I picked it as the biggest gainer of the year on New Year's, I figure I should own a few shares:)

    I just LOVE the long term chart w/ the 50 day moving up through the 200 day for the first time in 3 years. I really like the volume subsiding in orderly fashion after the bull snort, and I really like the action touching and basing on the 50 day - the last time yesterday at .84.

    From the DPTR message board:
    "The fact is that dptr has 134bfc in reserves. The market is valuing these reserves at $1.88 per mcf. Cabot oil has its reserves valued at $2.50 per mcf. Cabot oil has 2 trillion cubic feet of NG and is valued at $5 billion. dptr is valued at one quarter of a $billion. Should dptr prove their ""proberable"" 2.9 trillion cubic feet of NG does it become a $7 billion company using the same value metric as Cabot oil????? If it does then it would trade at $25 a share. Let's see risk is, at most, 90 cents. Reward could be $24. Humm lets say risk is only 30 cents, a third of the total possible loss, then the reward would be $8, using the same 1/3. You got to love this risk/reward. ...and is why DPTR was $24/Shr. in 2007. A rebalance of the sheets will get DPTR higher. Debt was reduced...now balance revenue with operating costs need to take the next haircut. And, of course a buyout is possible with the debt reduction since a buyer can synergize the operating and exploration costs."

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  27. Picked up MGIC 5.45. I like the well defined downward channel off of the highs. .09 eps last q w/ something like 100% yoy growth. Looks like it could be a rebound play at some point. Lowest RSI in 3 years. Cloud computing...

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  28. I like MGIC also. Looked at it again last night.

    F/BAC in BIG trouble here.

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  29. Blast in Jerusalem not good for MGIC. Israeli co. I believe. Will give it a VERY short leash. It should be ok anywhere over 5.20ish...

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  30. CREE- Got to love those pre-announcements.

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  31. Since trading under its 10 dma in mid Feb, MGIC has tested its 10dma 5 times. Huge thrust down the first time, big thrust the 2nd, moderate thrust the 3rd, very little reaction downward the 4th, and the last time around 5.60 yesterday.

    My guess is that the next time it closes near its 10dma (could be today), it gaps above it the next day and moves 15% minimum over the next 2-3 sessions. It all depends on how it closes. The 10 day could keep pushing it down.

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  32. SSO off @ 50.15. Too much negative news this am.

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  33. Out MGIC 5.35 -.10. Will wait for close. W/ VIX inverse etf's setup, I don't want to lose sleep over it until I see the close...

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  34. Long NLS at $2.83 average.

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  35. Generally speaking, copper has led the market. Copper is now getting close to testing the area that it broke down from a couple of weeks ago. It bottomed out, had a relief rally, retreated a little, and now is moving higher. That is what I suspect SPY does. I think we will be in the 1,310-1,320 area by next week. That is why I chose to go with NLS. NLS had a very good earnings report recently and the stock is in a great uptrend. Should the market regain its footing and move higher I think NLS should outperform. Long 10k shs at $2.83 average.

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  36. Added some REDF at $6.58.

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  37. Just sold my UNG 11.36. I know I'll regret it, but I always trade off of GAZ and GAZ is prime for a big fall as its 10% or so above nav.

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  38. heads up...some of my watch list stocks are hitting highs of the day...LVS/F/EBAY...

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  39. Picked up LMLP 3.37. Near 50% retracement from a couple of weeks ago...

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  40. LMLP coiled spring on the weekly. Similar to STVI's 50% retracement when we first discovered it here. Down big 11 out of past 12 days....

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  41. Sold my REDF just now between $6.9 and $7. Can't pass up 27% gains in a week.

    Long JDSU at $19.06 and long more NLS at $2.83-$2.85.

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  42. Probably will regret my sale of REDF...as usual.

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  43. OK, this does it. With SLV clearly breaking to new highs today, ECU.TO is still not moving. I am out of my patience. So I just picked up 5K more shares at $1.01 and placed a sell limit at $1.10. In order to make sure I don't go deeper into the margin because of this purchase, I just sold 1K shares of RBY at $5.84, which I picked up last week at $5.28. So I made a lateral move from a high-profile miner RBY to a low profile "forgotten" miner like ECU. I've seen many times how such "forgotten" miners make major moves when their time comes.

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  44. TOF -- congratulations on a great REDF trade once again! In order to bring the price back to you so that you could reload, I just bought 1K shares at $6.98. :)

    Honestly, however, the 1-year chart gives me a feeling that REDF has just started another vertical spike to new highs...

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  45. David - I agree that the spike looks like another run to new highs. I'm just looking at a big gain in 1 week and thinking I shouldn't get greedy. Plus, the last run had a 2 day spike and then it traded down and hugged the 50 DMA for a little while, so if it does this again then I'm hoping I can get back in at around $6.4ish.

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  46. I'm totally trading REDF wrong, i know. I just get skittish with the stock.

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  47. TOF- You've traded REDF well. This thing is trading in the hands of day traders. It's all over message boards etc. Scares the hell out of me too.

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  48. Mark > yeah...whenever the RSI14 gets down to 30-40 it's a buy, then on its initial pop it's a sell at RSI14 at 60 to 70. That's what I've seen at least.

    I think NLS pops really soon guys. Great looking chart.

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  49. Last Night I Held Aladdin's Lamp newSubmitted by 2nd_ave (5370 comments) on Wed, 03/23/2011 - 14:02 #82158
    Either we leave sub-12000 behind (more or less) for good, or get stuck with 'a lousy candle' in the morning. I think we're done with an 11-handle on the DJIA.

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  50. WATG -- I see no negative news about it today. The only thing I can think of is that it was supposed to release its earnings today, but on March 17 it mentioned that due to accounting re-evaluation, it will delay its earnings report. Maybe some traders did not read that March 17 update and got upset that WATG did not report today. The asking price for May $5 puts is $0.4 now, and I just put up for sale 10 such puts at $0.4.

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  51. David- I think it's a reaction to the Geely (HK) report. Weak guidance also.

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  52. Turn Up The Volume newSubmitted by 2nd_ave (5371 comments) on Wed, 03/23/2011 - 14:18 #82159
    Indexes moving higher on low volume. IMO, the low participation bodes well for higher prices. When volume kicks in, they'll be chasing.

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  53. Off @ 5.81. Nice $1k gain :)...Thanks CNBC...

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  54. Mark - I didn't even know RAS was in business anymore. I took it off my screen for good after taking a $10k hit on it last week.

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  55. :)...Yeah, they are. Still working on it.

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  56. Crap. Left 1K at the MGIC table.

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  57. Re: Turn Up The Volume
    Submitted by jack black (1379 comments) on Wed, 03/23/2011 - 14:32 #82162 (in reply to #82159)
    I thought going up on decreasing volume was bad?
    IMHO, SPY respects 50 DMA that was a support and now a resistance.

    reply Contact the author Bookmark this Ignore thread Ignore user
    Re: Turn Up The Volume newSubmitted by 2nd_ave (5372 comments) on Wed, 03/23/2011 - 14:37 #82163 (in reply to #82162)
    jack- That's the standard line, right? How many 'standard' moves has the market made in the past two years?

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  58. Bill Miller looks exactly like Jon Miller. (Baseball announcer)

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  59. Wonder why the weakness in BEXP...

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  60. All white guys look alike, man. You know that.

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  61. Re: Turn Up The Volume newSubmitted by 2nd_ave (5373 comments) on Wed, 03/23/2011 - 14:48 #82164 (in reply to #82163)
    Here's my take-

    (a) No one believes in this post-tsunami rally. Hence low volume.
    (b) The negativity almost guarantees we rally.
    (c) As more converts climb aboard, volume will increase.
    (d) Volume will finally spike as we approach a ST top. Then it's time to sell, and
    (e) Reload on the pullback.

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  62. Mark > I still think DANG hits it's IPO price ($16) at some point.

    Guys - did you see the Birinyi interview:
    http://www.cnbc.com/id/15840232/?video=3000011996&play=1

    I love this guy. It reminds me that the hardest thing to do in a bull market is to remain bullish. It's been the right trade for 2 years. And I think it continues.

    NLS is going to pop soon.

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  63. Home builders are done going down. Two terrible housing reports and look at what they have done. SPF is a buy.

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  64. wow. I see GS just put PHM on conviction buy list. Can't say I disagree, but SPF is the better play in my opinion.

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  65. Yeah, I was watching LEN after the report.

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  66. GMO/CLNE...Beautiful trend days.

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  67. "Blast in Jerusalem"

    On which day of the week isn't there a blast in Jerusalem, perhaps Sunday??

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  68. TOF- Hopefully without me on board. I liked the upgrade yesterday and have an easy stop. We'll see.

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  69. I realized recently that all existing valuation models might not apply to the current stock market situation. Even Hussman's very convincing model, which worked great as far back as 1920, might not apply here. And the argument about record profit margins might be irrelevant now. This time might REALLY be different. Why? Because this is the first time that US government got in the uncharted territory of having its budget deficit above 15% of its government spending. John Mauldin wrote last Friday that hyperinflations happened in the past when deficit rose above 30% of government spending. I think there is a non-zero probability that US will get there, since it won't be able to stop QE's, for if it tries, then treasury rates will skyrocket and the Fed will be blamed for killing the economy. Bernanke is not Volker, and he won't be able to withstand such blames. Hence, he won't stop purchasing treasuries. Hence, the government deficit will keep rising and we WILL get a very high dose of inflation down the road. The market is probably pricing it in gradually, and that's why it keeps moving up -- it is not about economy any longer, the whole game is just about the dollars that the Fed keeps printing. US Debt monetization has never happened before, and thus this time IS different. And so Birinyi might very well turn out to be correct with his crazy targets for S&P.

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  70. This keeps up much longer, all those state public worker pension funds that stayed in the game might just recover some of their losses.

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  71. David - I hear ya but I don't buy it. Humans are adaptive creatures. I don't think you can extrapolate out current trends forever. It never works that way. So when you say QE to infinity, the record of history suggests this WONT go on forever. Just look at Japan. They eventually stopped.

    I think margins will remain high for a while as corporations are in no rush to hire significantly.

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  72. The dynamics between Japan's experience and now are also completely different animals, I see it before as Japan's workforce going it alone in attempt to compete with the Chinese work force. They were trounced, I watched it happen up close and personal when it began in the latter 80's. Or at least that was my perception, right or wrong...

    During the period the US was actively exporting manufacturing employment, there wasn't much emphasis on improving the Chinese standard of living, but that has begun to change (my impression, correct me if I'm wrong).

    If you believe China will work towards becoming a responsible synergistic global trade partner as opposed to a giant factory flooding markets with products made by poverty stricken people, then you might expect for the Chinese middle class? Wouldn't these two phenomenon go hand in hand?

    These people worked hard for many years with little pay and accepted poor living conditions with an understanding their standard of living would eventually increase. The history of the opium wars and the promises of their leadership applies here.

    So from this prospective, when do we attempt to begin factoring in an increasing standard of living for China's emerging middle class? Never, twenty, fifty, one hundred years from now?

    I'm pretty sure no one will read this, not sure why I even bother.

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  73. Mark:
    "Dangdang (DANG) Will No Longer Advertise on Baidu (BIDU) Starting in April
    1:37 pm ET 03/22/2011 - StreetInsider

    Dangdang.com (NASDAQ: DANG) joint president Li Guoqing announced today that the company will no longer be placing advertisements with search engine Baidu.com (NASDAQ: BIDU) stating in April.

    The decision comes after the recent allegation from Dangdang that Baidu is involved in literature and music piracy.

    ChinaTechNews.com said last week that over 50 Chinese writers and publishers claimed Baidu has been providing free downloads of their works "without the consent of the copyright owners."

    The website also states that Baidu offers free downloads of music, which is shrinking the overall Chinese music publishing industry. Many of the writers and publishers reported that "if Baidu takes no action, they will start a class action lawsuit against the search engine company."

    Li comments that they will no longer advertise on Baidu, but instead will financially help the writers and publishers looking to sue the company for copyright infringements.

    ChinaTechNews says that Dangdang will use the extra money from this cancellation to improve its own e-commerce services.

    Shares of DANG are currently trading up 8.8 percent, while shares of Baidu are up 1.5 percent."

    I'm thinking management of this company is bad at best. The CEO came out and trashed the underwriters of their IPO and now they're gonna go up against the heaviest of the heavyweights in China internet? That's a money losing proposition. Certainly not shareholder friendly.

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  74. TOF- All right. Thanks. DANG off @ 19.85/19.80. $300 loss.

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  75. http://finance.yahoo.com/blogs/breakout/louise-yamada-p-500-groping-support-leaders-emerging-20110323-082006-423.html

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  76. http://finance.yahoo.com/blogs/breakout/

    Jeff Macke is showing up again...they have a couple of interviews with Louise Yamada here.

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  77. TOF- What happened to that dude anyway? Didn't he go on a bender or something.

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  78. CP: "I'm pretty sure no one will read this, not sure why I even bother.".....I read it and applaud you on such international, socio-economic thinking.

    I am reminded of something I remember from maybe the 1960's or 70's, when the environmental movement was just kicking up. The question raised was "what will happen when 700 million Chinese get cars?", regarding air pollution. Well, there are now 1.2 billion in China and not many have cars yet industrial pollution is rampant. My hope for them is that they will become smarter as they work hard.....and do not commit to "conventional" nuclear power plants.

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