Birchtree's Account Talk

[Birchtree]

"The Dow Jones Industrial Average usually has recorded additional gains after it hit record territory - a median 28%, according to Ned Davis Research. If the current bull market matched that, the Dow would pass 18,000 before topping out, up from 14,396. In the 1990s boom, the bull market lasted nearly nine years after its first record. The current period, of course, doesn't seem comparable to that euphoric time. After a high was hit in 1972, the bull market lasted only two months. The last bull market, which ended in October 2007, continued for a year after its first Dow record, rising 21% in that period. In all but one of the past six bull markets, purchases of stock mutual funds picked up right after the Dow's first new high, according to Ned Davis. In the six months after that first record, the median flow of money into stock funds, in percentage terms, was three times as strong as in the six months before. Whether it proves wise to jump into stocks now is going to depend partly on Mr. Bernanke." We are seeing a little more weakness in the VIX today - waiting on a parabolic blastoff to scare those that are missing the train.

 

[Birchtree]

Rochester - the VIX just dropped into the 11 zone at 11.90 -0.60. The Fed wants the stock market to go up, and they will do what is necessary to get it to what ever level it takes for the wealth effect of higher prices to stimulate growth. Again, since the current round of QE is open ended, that raises the probability that a QE3 fueled rally may surpass in length the previous rallies. For TSP focusing on European firms that have global businesses can be a way to tap into emerging market growth while paying less.

 

[Birchtree]

VIX is still dropping to 11.69 - it could be in the 10 zone by the end of the week. Will the bond folks buy - no one ever said it was easy to be greedy when others are fearful. I did step in today and bought more BAC. Waiting on my margin release to really open the money spigot.

 

[Birchtree]

Shaking out the bears - MarketWatch

 

[Birchtree]

We now have 7 positive in a row Dow trading days - peanuts. I remember in the Spring of 1983 we had 13 positive trading days in a row. And as Bernstein says the 2013 bull market equates to 1982 - one of the most powerful bull runs ever - so anything may happen going forward. Be in to win.

 

[Guest2]

The Bull never waivers. Miss you alot. Good Times.

 

[Birchtree]

The advance/decline is not showing any divergence against price. A strong multi-year rally is just beginning - with aggressive monetary policy, the beginning of job growth and improvement in consumer's balance sheets. Yes sir it is becoming increasingly clear that another dangerous asset bubble may well be in progress - could investors really be foolish enough to push stock prices back into bubble territory for the third time in little more than a decade - gosh I hope so, I want my asset bubble. The VIX had its' all time low of 9.31 set in Dec. 22, 1993 - we're headed there again as fear recedes thanx to the Fed backstop. Just because things might become overvalued, doesn't mean we can't go much higher. Today was a rest stop on the way to 1600 and 16,000.

 

[bighog]

The advance/decline is not showing any divergence against price. A strong multi-year rally is just beginning - with aggressive monetary policy, the beginning of job growth and improvement in consumer's balance sheets. Yes sir it is becoming increasingly clear that another dangerous asset bubble may well be in progress - could investors really be foolish enough to push stock prices back into bubble territory for the third time in little more than a decade - gosh I hope so, I want my asset bubble. The VIX had its' all time low of 9.31 set in Dec. 22, 1993 - we're headed there again as fear recedes thanx to the Fed backstop. Just because things might become overvalued, doesn't mean we can't go much higher. Today was a rest stop on the way to 1600 and 16,000.

For The Win!

 

[Birchtree]

Fear is the rational buyer's friend and fear works both ways. When the market bottomed on March 9th, 2009, the VIX closed at 49.33 - interesting. Over the last several months, stocks and the dollar have actually been positively correlated and moving in the same direction - this is the same scenario we had in the 1990s. "This analysis results in an outlook of moderate growth for the financially damaged U.S. economy. While that may sound bad on the surface, it ironocally provides for a long sweet spot for market participants in essence, the so-called 'Goldilocks' outlook. That is an outlook that will encourage and enable new bubbles, which are great for for Birchtree and Jimmy Joe in the short term., though they are obviously bad once they run their course and pop." That could be ten years from now though. "With Jupiter and Uranus about to start a three passage conjunction with one another this will coincide with excessive speculation and hence 'bubbles' in financial assets." I've been waiting with great anticipation for my bubble bath.

 

[Birchtree]

I noticed that member amoeba has started dollar cost averaging into the S fund - that is the smart approach because the S fund is currently over priced and will eventually - well you know. I like to chase wall flowers but not momentum - large caps will surface as the next sector to outperform. So I'm inclined to hold my 20C/80I position and patiently wait my turn to burn some rubber.

 

[Birchtree]

Whoa, following a bull market peak in net new highs since 1940, the median bull market has lasted another two years and delivered an additional S&P of 32%. C'mon open the door and let'em in. Chase the good times - and enjoy the benefits of a runaway rally. It's anyone's guess as to how long one of these moves will last. The rally of 6/07 lasted 7 months.

 

[Birchtree]

"Since the Dow hit its March 2009 low, many sage market players followed stimulative and fiscal policies, ignored the noise of pundits predicting doom and gloom, and invested heavily in equities like Birchtree. Only in retrospect can their bold calls be recognized as wise."

Dow - Then and Now | Frank Holmes | Safehaven.com

 

[Birchtree]

I don't mind these small up days because I have dividends due mostly every day - got 15 that will go Friday. I am however starting to get a little anxious to begin collecting more wall flowers rather than waiting on margin. I could just sell something and use the cash to buy - but then anything I sell will only get more expensive - so I continue to wait on margin. A few good heavy up days would get me there sooner - such a problem to have. Damn greed factor has me by the ankles. I still think I'll get liberation by the end of the month and then I graze for several years - that's worth waiting for.

 

[kodaq2001]

you think the s fund will crash soon?

 

[Frixxxx]

Based on this article, no:

Link

But then again, pull what you want from it!

Bulls may not be running, but walking is acceptable.

 

[Birchtree]

The basis of the article is we shoud buy into runaway rallies. Dow will try to extend longest winning stretch in more than 16 years. The fact that individual investors are not grossly over allocated to stocks at this point suggests they still have a fair amount of liquidity to invest. I doubt we'll see any deep set backs anytime soon. But then again pullbacks are just a natural part of how the market works its way higher.

 

[Birchtree]

If anything, my aged experience has only strengthened my off-stated belief that tremendous profit opportunities still lay ahead. In short, it is still a good time to be an investor and is definitely not the time to abandon ship in anticipation of a pullback of consequence. Today could be a Bo Derek Day - #10. Once a market gets drawn into one of these runaway rallies you can pretty much throw out every trading tool as the mechanics of the rally just roll over any and all trading strategies. Sentiment becomes useless along with cycles and technical analysis. Today could see 1565 go puff and then there is nothing but the sweet smell of superlative bull manure wafting into the blue. I certainly could use some big dollars today.

 

[Birchtree]

I've been thinking about the power of the Nikkei index which is +19.94% so far this year. Does the controled weakness of the yen ready to signify a resumption of the carry trade, which would mean that another major liquidity stream is coming online to power the stock market rally even higher. I just think it will have an impact and has yet been added to the equation for this rally to continue for years.

 

[Birchtree]

The VIX is still reaching for the 10 level - currently at 11.47 -0.36. The way the stock market has performed of late has me thinking back to the low volatility bull market cycles of the early and mid 1990s. So far 2013 is awfully reminiscent of 1995 - another year that featured a jobless recovery. Of course 2012 also felt like 1995 in the early rally of that year. I bet we cruise right on through summer without any consolidations greater than 3%. The RSI, stochastics and MACDs, will some day sell off when everone expects it not to. Today is going to get me a little closer to breaking open my margin piggybank - I want some cash available when any pullback occurs. cause I like golden prices.

 

[hotwings]

Picking up some BTU and APPL at these golden prices....