Birchtree's Account Talk

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Re: Birchtree's account talk

I wouldn't be at all surprised if the Dow has another 700 points in front of it. If the MCO continues to move higher from here we can continue with the idea that we've just gone through the climactic portion of an intermediate term correction within a primary bull market uptrend. The MCO is so important right now that if it does break its current divergent structures, a bear market label would be applied in relation to the longer term. The MCO measures the trend of the A/D line. With the CO NYSE breadth MCO moving higher yesterday and today, this has now slowed the downward progress of the CO NYSE breadth MCSUM right at the levels in which previous support was seen last year. The distance of the postings of the MCSUM during this latest decline - when we have close proximentary points on the chart, it shows me that money moving in this downward direction lacks conviction. This is why it was very important that the MCO contain its bottoms above bottoms structure in the face of this latest decline and made it more a purge, a climax, then anything more dire. Yesterday's action was virtually identical to July 24th, 2002. It would appear that from an Elliott standpoint that the Intermediate wave 2 of Primary wave 3 is behind us and Intermediate wave 3 is directly in front of us again. Does anyone have any idea what is coming - I talked about if for two years. 12billion shares are short - this was a 2nd wave bottom. I bought some CNH today at $40.
 
Re: Birchtree's account talk

Birchtree said:
I wouldn't be at all surprised if the Dow has another 700 points in front of it. If the MCO continues to move higher from here we can continue with the idea that we've just gone through the climactic portion of an intermediate term correction within a primary bull market uptrend. The MCO is so important right now that if it does break its current divergent structures, a bear market label would be applied in relation to the longer term. The MCO measures the trend of the A/D line. With the CO NYSE breadth MCO moving higher yesterday and today, this has now slowed the downward progress of the CO NYSE breadth MCSUM right at the levels in which previous support was seen last year. The distance of the postings of the MCSUM during this latest decline - when we have close proximentary points on the chart, it shows me that money moving in this downward direction lacks conviction. This is why it was very important that the MCO contain its bottoms above bottoms structure in the face of this latest decline and made it more a purge, a climax, then anything more dire. Yesterday's action was virtually identical to July 24th, 2002. It would appear that from an Elliott standpoint that the Intermediate wave 2 of Primary wave 3 is behind us and Intermediate wave 3 is directly in front of us again. Does anyone have any idea what is coming - I talked about if for two years. 12billion shares are short - this was a 2nd wave bottom. I bought some CNH today at $40.
Click to expand...
Just to let you know, I read everything you post(sometimes twice in order to absorb it all). I am glad this mb has your experise and experienced voice of reason. I know -- I slipped up yesterday and pulled some back to CP but still plan to DCA like crazy into the C. Still trying to learn.
Thanks again.
 
Re: Birchtree's account talk

"Current reading on Bullish Percent Index is 13.60%. Either the IBES model is broken due to the ongoing financial stress on the economic system, or alternatively it is signaling this could be another attractive time to invest in the market for those with a longer term outlook. According to this model the U.S. market is 52% undervalued. When insider purchases exceed 25% of insider sales the Gambill Oscillator considers this a strong buy signal - now at 36.78%."

http://www.[[financialsense.com/fsu/editorials/dancy/2008/0122.html
 
Re: Birchtree's account talk

Audience: Please be aware the following is for Male Viewers Only

Birch - I'm getting sick and tired of this losing horses### :suspicious: and figure the best thing to do is just ride this SOB out and catch the next gain - cause as soon as I step out I'll miss it.
 
Re: Birchtree's account talk

NYSE TRIN at 4.27 was screaming MAJOR bottom. The last time we had two trins over 4 within a 2-3 week period was March 2003. The best usage for the TRIN is to identify climactic bottoms , high readings of TRIN show levels of capitulation or fear. The 14 day Hurst projections are showing 1420+ on the SPX. A break above SPX 1437 level would solidify a bottom.

As Joe Granville used to say, "The obvious is obviously wrong". "Will the negative sentiment succeed in repealing the laws of contrarianism. Will Granville's Golden Rule be broken for the first time in memory?"

http://www.safehaven.com/article-9316.htm
 
Re: Birchtree's account talk

tick...tock......tick..tock.......is the wall st bogeyman coming to get you....tic..tic...tic.....whats next?:confused:
 
Re: Birchtree's account talk

Spiked volumes with the highest level of short interest indicates seller's climax lead to pivotal market condition. The two day reversal formation could lead to alternative "V" wave up to SPX 1600-1700. This is the 1998 scenario.
 
Re: Birchtree's account talk

Birchtree said:
Spiked volumes with the highest level of short interest indicates seller's climax lead to pivotal market condition. The two day reversal formation could lead to alternative "V" wave up to SPX 1600-1700. This is the 1998 scenario.
Click to expand...
this 2 day reversal pattern appears to be a n-squared - x formation that translates into a wave 6 spike to the downside for a spx 1150-1250 reading....thats just what the charts telling me:toung:
 
Re: Birchtree's account talk

Initially I thought I felt a very slight undertone of veiled truculence but I'm almost sure I'm overreacting.
 
Re: Birchtree's account talk

"The deficit in the current account, the broadest gauge of the nation's trade and financial dealings with the rest of the world, narrowed for the third consecutive quarter, as the U.S. reduced the still-large sums of money it borrows from abroad.

The Commerce Department reported that the deficit shrank to $178.5 billion in the third quarter from a revised $188.9 billion in the previous one. The narrowing is partly a result of strong demand from overseas for U.S. goods and services, which have become cheaper due to the dollar's decline. We're starting to see an improvement in the current account after its record $217.3 billion deficit in last year's third quarter.

At an annualized rate, the deficit is running at 5.1% of the nation's gross domestic produect, compared with last year's 6.1%. The deficit is financed by an inflow of capital to the U.S., which dreied up significantly in August and September as international credit markets faced serious turmoil. Net purchases of U.S. securities rose by $118 billion in October, after dropping $36 billion in August and rising $56.4 billion in September, as credit turmoil eased. The lesson is that...the rest of the world's appetite for dollar assets seems to be much more durable than we thought several years ago."
 
Re: Birchtree's account talk

Birchtree,

Some Bullish comments below. What happens if the data confirms no recession, or only a very mild one?

How many points will we rally Birch?


Sunday, January 27, 2008

Turnaround Week Sees Profit-Taking

Stocks ended the week on a down note after a huge rally midweek. The week's lows were reached early on after a US trading holiday Monday caused a mini-crash outside the US in the wake of forced liquidation from a French bank. This type of events (large bankruptcies and rogue trading scandals) tend to culminate bear markets and this one seems to have put a firm bottom into the market, although the possibility of a retest is ever-present. The cathartic selling we saw in the first half of the week hit all of the resting sell stops and cleaned the market of the remaining weak hands.

The selloff in stocks has more than discounted a recession. In fact, it has discounted almost a depression. Stocks are yielding twice as much as bonds, which makes them hugely undervalued. When consumer goods go on sale, shoppers line up before dawn to snatch bargain buys. When stock markets go on sale, those same consumers flood their brokers with sell orders. The herd mentality plays right into the hands of savvy long term investors who buy for the long term uptrend in stocks.

Friday's session, as expected, saw some inevitable profit-taking in stocks which was telegraphed on Thursday by relative weakness in the broad list compared to blue chips:

Although we can't definitely say the bull market has started, we can confidently look forward to some base-building to launch that next bull market in the very near future.

http://marketclues.blogspot.com/
 
Re: Birchtree's account talk

I'm still with the idea that what we've just gone through was the climactic portion of an intermediate term correction within a primary bull market uptrend. Something similar to the end of an intermediate wave 2 in a Primary wave 3. With intermediate wave 3 yet to come. I'm looking for MCOs to breakout Monday to confirm bull divergence, snap back to their breakout area on Tuesday and then continue their journey of construction.

The previous all-time high for the ratio-adjusted (RA) AD linewas 166,190 posted March 13, 1959. The NYSE RA-AD line did nominally slip below the 1959 previous high for two consecutive days (January 18th and 22nd), and is currently sitting around 360 points above the 1959 high. So there is no question that a line in the sand is being vigorously defended by the bulls - but can they continue. With all the breakdowns in the price patterns on Friday after the open, I thought the internals held up fairly well. My oceanic account only gave back $1K on a 171 point down day.

This last weeks worth of breadth data is now in a position where a bear market confirmation signal can be given IF the NYSE breadth McClellan Oscillator does not hold its current divergent structures. The current challenge for investors and traders is in determing whether the ongoing market decline from the October highs is the start of a longer term bear market or just the final capitulation process of a correctional bull market price pattern sequence.

The McClellan Oscillator allows us to understand what the actual trend of money flow really is. If the MCO breaks support at -75 then a longer term bear market would be signaled. If it holds support then one's strategy would be that of continued accumulations with the expectation of higher price highs still yet to come in the not too distant future. What counts in this analysis is only the plurality of breadth that we see when everything is evened up at the end of the day. It's the positioning of the cumulative line itself in relation to that of the 19 day EMA (10% Trend) and the 39 day EMA (5% Trend), and then any interplay crossovers between these same EMAs that generate these specific signals. We are only measuring end of day money flow. The CO NYSE breadth MCO is currently at +0.08, right on the zero line after a small snap back on Friday. The foundation is now in place for a counter trend to turn into an equal and opposite trend. According to the internals we have more than likely finished a deep correction within a larger bull market. Yes folks, I still think we are in a mega trend secular bull market. There hasn't yet been anything to confirm a bear market since 1998. Am I just plumb full of sweet superlative bull manure - time will tell. This week will be very interesting. Snort.
 
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