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Strategies & Market Trends : Strictly Buy and Sell Set Ups -- Ignore unavailable to you. Want to Upgrade?

To: chowder who wrote (8787)	3/30/2006 10:07:37 AM
From: profile_14	Respond to of 13449

No kidding <ggg>!

To: chowder who wrote (8787)	4/1/2006 8:17:25 PM
From: profile_14	Read Replies (1) \| Respond to of 13449

RIO Revisited. RIO jumped over its 50 day moving average, but I would like to bring the attached chart to light. stockcharts.com RIO has CMF that is falling and not accompanying price. You will likely see it in your Money Stream indicator, although I am not sure since I do not subscribe to that service. Second, RIO is window dressed year after year. Please refer to this chart to see what happens in every April through the 3rd week or so, and the percentage of the retracement. Third, the ADX green and red lines have crossed, but the solid ADX line stands at 17.06, which is insignificant until it goes above 20. Note though that the green line has begun to drop. Fourth, notice the measured move from the last bottom of 41.86, up some 3.5 points, then down a little, then up again some 3.5 points or so. I see that as a tell tale sign of a move that is about to turn when combined with the other seasonal and overbought indicators. Fifth, look at the very large red spike. In no uncertain terms, the damage was done there and I think that reflects a watershed moment for RIO. While the commodity prices may rise, last year, 2005, witnessed a 72% price increase and you can see its effect on the stock price in March. This year's price increase has not been agreed to but RIO is asking for 24% and China does not want to pay more than 5%-10% -- in fact, they want a cut (who doesn't?), but macroeconomic conditions are such that there is strong demand. With a smaller increase I expect a more muted response, more like sell on the news. Sixth, note that RIO is above its upper BB, which does not occur very often, but when it does, it pulls back. Lastly, sentiment is so bullish I consider this bearish. I added many puts to my position and now have a very large delta adjusted exposure short to RIO. Your thoughts are much appreciated. If history is any indication, this is a seasonal trade that will repeat itself and hopefully we can all make money from it. Notice how it moves from April 1st through late May, and how it also spikes down into the 3rd week of April. I plan on reversing the trade in late May and being very net long. Best regards,