Birchtree's Account Talk

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According to Bob Doll: "If you know how the markets work, perception is often more powerful than reality. That is, when the market perceives that an economic recovery is just graduating to that elusive growth stage, that's when stocks make their moves. And when that growth reality sinks in, it's usually too late to catch the rampaging bull."
 
Well it looks like I didn't make any money this week - actually went backwards. It will now take me several more weeks to pull the $1M off the March lows - but that's ok. Six out of the last 10 Januarys have been down for markets. I still plan to pull up another $1M in 2010 - I just don't know how long it will take. Today is my next to the last DCA into the C fund - I'll miss those dollars buying me those shares all these years - but it's time for a new horizon.
 
From the print edition of TWSJ - 12/31/09.

"Many mom and pop investors, who were badly burned by the stock-market collapse, remain wary. (I like that). As of the end of November, stock mutual funds had suffered an outflow this year of $4 billion, according to the Investment Company Institute. By contrasy, there have been inflows of $284 billion (I like that, too), into taxable bond mutual funds, considered a safer bet. Some inverstors say the light volume associated with the recent rally and the lack of money flowing into stock mutual funds are evidence that many investors haven't participated. (I really like that)."

You must be aware and understand the fact that we are going to see frightening retracements the higher up we go. Bull markets do not like company and the higher we go the stiffer the pullbacks will be to make sure that not everyone is participating as we continue to move higher and higher. I like that also. There are now 1500 fewer hedge funds operating and trading. Bullitt showed a graph of the A/D line of the NYSE. Only in third waves can such occurrences happen where breadth of market makes higher and higher highs. Under a scenario of Intermediate 3 of Primary 3 we will see new all time highs on the ratio adjusted NYSE breadth MCSUM to confirm. We are now challenging the kickoff of 2003 - once we move above this level - time and strength wise - this would also add confirmation to this high degree 3 of 3 scenario. Get ready for the ride of a lifetime.
 
Under Elliott guidelines breadth should now start to expand exponentially and if you look at how the NYAD line has been moving up over the last 6 months, this is the kind of thing that should continue for awhile. We're going to see numbers on the upside that are going to dwarf anything you might imagine - thus my target of Dow 17,000 by the end of 2010. There is a lot of fear still around so remember that big bull markets always find a way to kkep you frightened and oiut. Big bull markets are devils with no conscience - to get in you have to close your etes, and just do it. Not easy, but in this business nothing is easy except losing money. I'm sure glad I took the plunge last fall when I already had a $1M haircut on board.
 
Well the last day of trading ended up a heart breaker so I fell short of my initial goals. I ended up #40 on the tracker with a 28.04% gain - not bad considering where I was at the March lows. As promised for the observant my oceanic account closed out the year with a long market value of $2,081,054. I took in 92 dividends in December for reinvestment and the same will happen in March. The income from the dividends totaled $4777.45 as a nice income stream. I already have 15 dividends that are paying on the first day of trading in January. So I'll hope for a small down day to get better pricing. At some point in the future this income stream will mean something as collateral to a bank. The first four months of the year have been positive 72% of the time going back to 1974. The oceanic is going to really push the limits in 2010 and shoot for another $1M in market value gain. So please come along and enjoy the ride of my lifetime. The SPX is up 68% from the 12-year trading low of 666.79, its best performance since the 1930s and I think the fun is just starting.
 
"Rhea explained that the market doesn't trade on what everybody knows, but on what those with the best information can foresee. There is an explanation for every stock movement somewhere in the future. The market sees something it likes and the reality of what the market sees will eventually become plain and clear to all in due time. The market's economic forecast for the coming months is a positive one and the only one that really matters."

http://safehaven.com/article-15376.htm
 
Hey Birch, wanted to say thank you for all your insight and contrarian buy and hold approach. You have helped me to stay the course this year, when my emotions get involved.

May 2010 be know as the year of the rocket!
 
Do as I'm doing - chase the bull. Went in and bought: GRA, WGO, ASH, AE, HAL, GAP. I hope I can buy all week. That just cost me $33K.
 
"Today's rally has pushed the percentage of stocks above their 50 day moving average in the S&P 500 up to 85%. The facy that breadth has caught up with the new highs in the overall market is a good thing for the health of the bull market."

http://www.bespokeinvest.com/

If we continue to rally up another 150 Dow points tomorrow you will be able to smell all the bear scatology as they head for the hills and cover their short hairs on the run. There will be blood and it won't be mine.
 
1. "Just how unusual is this outlier rally and can it be sustained. This phenomenal bull market just might get even more phenomenal."

2. "A bear turned bull remains bullish."

http://pragcap.com
 
Analysts agree that the huge gains of 2009 - when the SPX index jumped 64.8% in nine months to end the year with a gain of 23.5% - have almost no chance of being repeated this year. I'll gladly take the other side of that bet. Change is coming to America. Since 1973, a big advance on the first trading day of January has been a strong sign stocks will post robust gains for the rest of the year. Watch out for the nfp jobs release on Friday - this could conceivably send a market bolt through the system and fry a few more bears. Now please mom and pop do not charge into this market at this time just because you missed the strong bull run of 2009 - wait until the Dow is at 14,000.
 
:eek: = FEAR

Birch,
Since we have a lot of 'new members' joining in...

I was wondering if you'd be willing to help everyone know when FEAR is dominating your thinking and life.

Would you Please use the 'symbol' noted here when that happens?

Thanks in advance,
Steady



Oh BTW -- Mild consolidation -- heading Higher !!
 
Doing a little buying ahead of the afternoon rush: TRW, HUN, PCX. Will return if we can rally up to make a few more buys. There are just so many worthy wall flowers.
 
Birch...out of serious interest, what has made you change your mind of a few months ago when you said you would be phasing out of the market when the VIX reached the "20" mark? Or did I just misunderstand? Please explain?

Thanks,

Lobo :)
 
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