Birchtree's Account Talk

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I always like to imagine birch's commentaries in the voice of the guy who does all the movie previews

'one man.. one oceanic account, in an unpredictable stock market fueled by fears of the millions.. one man stands alone... dun dun dun.... *cue dramatic music*'
 
The oceanic this week was a throbber - here's what transpired: -$67K. +$35K, +$18K, -$8K, +$24K for a tantalizing gain of you guessed it +$2K. The fear of loss can keep a market timer from executing a trade. Fears cloud decisions. And decisions clouded by fear, that feel right at the time they are made, are more often than not...wrong.
 
If you don't know it - this is the best time to buy stocks since the March '09 bottom. This unusual bullish rally has broken a lot of historical rules to get where it is and should not be denied. The previous years fight to flight mentality taking hold of the herd into bonds may be ending. They may no longer disbelieve in the new bull cycle and their money into stocks will continue to power this market higher. You just gotta know that. Assets aren't as cheap as they were a few months ago, but it's possible they could go straight up from here. Best to stay all in and sit tight.
 
A nice read today in my WSJ. "Is bull sprint becoming a marathon? Recent rally has sparked debate over whether a 13-year stretch of lackluster returns is over. But the rally at the beginning of this year - and signs that investors are putting more money into stocks - has fueled a debate about whether that extended bear market may be over. That would signal the dawn of a secular bull market, priming investors for years, and possibly decades, of double digit gains. During secular bull markets, stocks have averaged annual returns of 18%. By contrast, secular bear markets yield returns of about 1%. For investors, it matters a great deal what kind of regime we're in. With both individuals and institutions such as pension funds having bulked up on bonds and shunned stocks, if a long-term bull market has started, there are a lot of people who may not be positioned the way they should be. P/E multiples rise for an extended period during secular bull markets. During the most recent secular bull run that began in the 1980s and ended in 2000, the S&P 500's P/E ratio rose to 28.6 from 7.7." The stage has now been set for investment opportunities that will make anything I've seen over the last 30 years pale by comparison. It takes a lot of intestinal fortitude and patience to believe more of an upswing is ahead. Many of my stocks are poised for further resurgence. The stock market is still the best long term investment strategy for a significant portion of one's assets. The longer amoeba waits for definitive proof that the good times are underway, the more he will miss out on some of the market's biggest gains - me, I've already caught 124% of this bull off the March 09 lows - now that feels good. The moral of this story is that in a long history of the economy in general and the markets in particular, optimism has been rewarded far more often than pessimism. Remember, the market always looks ahead and discounts the future.
 
It was nickels and dimes all day - that ain't no way to run a bull market. The setup is for an explosive move to 1550 on the SPX as the recent rally has apparently been met with skepticism and continued attempts to lay on short positions. I suspect there may be a recognition point sometime this week as bears realize they are on the wrong side of the tracks and platform bulls jump on board fearing to miss out on a new bull market leg. Friends, this rally has the potential to last for months without any serious pullback - only because everyone waits for Godot. People think that the price is what sells - but reducing the price won't help very much. Terms are what sells and right now terms are delicious. The beauty of the A/D line is that it gives you plenty of warning of any impending change in the larger trend. Saxena: "We are in the very early stages of a new multi-year bull market."
 
Birchtree said:
"Bull markets never make it easy. Very few traders have the determination, stamina, foresight, and focus to make it all the way through one. But the rewards for the very few that can weather every punch the bull dishes out...are huge."

The Rest of the Story | Toby Connor | Safehaven.com
Click to expand...

Cherry picking the 1990 bottom and using that to stay invested worked fine until the 2000 bear market where those same Buy & Hold investors proceeded to lose 60%
That comes out to 10 years to make the money and 2 years to lose more than half, meaning you wasted more than 5 years
 

I think the last five or six Mondays have been down days but the weeks have usually rallied to the upside. Birch - are we going to blast off tomorrow?
 
Birchtree said:
It was nickels and dimes all day - that ain't no way to run a bull market. The setup is for an explosive move to 1550 on the SPX as the recent rally has apparently been met with skepticism and continued attempts to lay on short positions. I suspect there may be a recognition point sometime this week as bears realize they are on the wrong side of the tracks and platform bulls jump on board fearing to miss out on a new bull market leg. Friends, this rally has the potential to last for months without any serious pullback - only because everyone waits for Godot. People think that the price is what sells - but reducing the price won't help very much. Terms are what sells and right now terms are delicious. The beauty of the A/D line is that it gives you plenty of warning of any impending change in the larger trend. Saxena: "We are in the very early stages of a new multi-year bull market."
Click to expand...

I agree about the skepticism regarding the current bull market. While I've seen a few indicators of possible bear market triggers, most of what I've been seeing suggests otherwise. A lot of investors are worried that the SPX will start a bearish trend soon just because it is currently getting close to its all-time high of 1565. I believe it's only a matter of time before we see the SPX hit not only 1565+, but even higher. The recent jobs report and housing market data both suggest that the bull market isn't done yet.

Another thing to notice is how every day when the markets fall due to some sell-offs, the markets go right back up the very next day and continue to go up. I'm sure we might see some smaller spurts where the SPX (and, thus, the S-Fund) go down much like the I-Fund recently did, but I definitely don't see it collapsing, personally.
 
JTH,

I was so fortunate that in 2000 I didn't own any technology stocks - everything I owned was dull and boring. So I survived that down poor within reason. I did buy into the triple bottoms of 2002 and 2003 prior to the last bull market run getting some nice prices. Profitability resides in the ride ahead.
 
Let's get on with it - I would like to see a monster rally to send shivers through the folks waiting for Godot. The VIX has been radically reduced so bring on the anxiety. I'm reminded that the desire to be right is in direct opposition to the ability to be successful. The desire to be right is in direct opposition to the ability to make money.
 
I'm in to win. I believe a correction is ahead, and maybe even one final big one when Ben's money printing no longer can push back the waves of debt, but I plan on doing as well as I can in the meantime.

I will watch diligently and hope that I can move my funds to safety in time to preserve most of it. But, there's no reason to be on the sidelines until you see the whites of it's eyes.

I agree that new all-time highs are ahead...most likely by the first hafl of March. We may pause there, but then its upward from there.

I don't think the sequestration, or whatever it is called, will have much of an impact on the market and my strategy right now is to ride it out. I may change my mind on that, but that's my approach right now.
 
The last 30 minutes today may be very interesting - let's see some shock and awe of a buying stampede. The ratio adjusted NYSE A/D line is at a 80 degree parabolic angle and heading higher. This tells me that even if we reach a divergence in the near future the actual price top may be another several years away. How's that for stinking up the board with sweet smelling superlative bull manure.
 
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