Birchtree's Account Talk

[Guest]

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The action was the hedge fund cockroaches trying to get back to even prior to the EOQ.

Could you please post your link on the Elliot Wave data you are talking about?

Thanks for the update on the OCEANIC.

 

[Birchtree]

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DMA,

You can find the article at www.safehaven.com written by Eric Noel. You may find it to be intimidating to a short trader. He talks about the shorts getting crushed - not pleasant reading. At any rate it's very descriptive regarding wave strengths and Fibonacci retracements. Enjoy - tomorrow will probably tell the story. Gotta like them oils - the Fed has paused. I don't think they dare to go higher - already some EU banks are talking about reducing rates. Can you visualize the mess we would be in if we are actually heading for deflation. Poor stuck home owners. I'd have to change my user name from permabull # 2 to DMA # 2. This is fun - and that's how I take our banter. See you at higher levels.

Dennis

 

[Guest]

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Noel is quoting Neely. Neely is guy that wrote the DOW 100,000 book. :shock::shock:

Neely is a joke. IMHO. Ya do not see this guy doing interviews. Why? Well I will let your reach your own conclusion. Hint: Hard to cover the laughing up and the snickering interviewer.

Can we move past the 90s now?

Noel leads off with this.

There is not much debate among technical analysts that the 2000-2015 time period has been and will continue to be a secular bear market in stocks.

He should of stopped while he was AHEAD. The rest of the article is just trying to strike up a debate that was going on in the late 1990s.


This article is salt in the wound to any investor that rode this sucker down to the bottom. IMHO. Why open up old wounds and make the same mistakes????

If anything this article should be a learning tool of not to hold and hope, dollar cost avergage down andthrow money at index funds. IMHO.

 

[Birchtree]

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DMA,

You and I need to move over - I see where someone call Big Money has just joined the ranks.

 

[Guest]

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Yeah Neely made BIG moneyhocking that book to gloosy eye people.

He was the cats meow for about a year or two and has dropped off the face off the earth since.

Do you realize that sucker cost 95 a pop? And they were flying off the shelves.

WOW.

Read this q&A bit (glenn is neely):

DAVE: Wow! That is super positive to hear. Do you have a time frame when this huge bull move should begin?

GLENN: Yes, it should begin with the fourth wave bottoming around 1000 in 2015, and then we will see the most spectacular stock market advance we have ever seen in the history of mankind.

I would say he is bearish near term . That is a 90 plus percent drop from here.

 

[Spaf]

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Birch.......DMA

Both of you are looking at the same issue "funds" from two prospectives! Neither of you agee that "hold and hope" is a good avenue to pursue (correct)? Most "IRA fund companies" have hold and hope investment strategies.

Well OK! Ifwe want to retirethis year, next year, what is your opinion on what do we do with TSP funds?

Option: Mattress :?:? Spaf




The ans is?

 

[pyriel]

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Hehehehe... Seem like this question is somewhat related to your situation... hehehehe

 

[Mike]

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Emotion depends on the amount involved. If the loss = the amount that would have been gained on a missed rally, I'd say the emotion is stronger when losing money. Otherwise, the intensity favors whichever amount is greater.

 

[Guest]

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I am saying I would not bank my investmentdecisions on the DOW 100,000 guy. :shock:Especially some writer trying to grab head lines by bringingNeely's 1990s view into 2005. :shock::shock:

Like they say in the medical profession - ya may wantto get asecond opinion.

If the advice is to follow Neely as is suggested above. I highlighted from his work were he thinks DOW 1000 by 2015. :shock::shock::shock: That is a 90% plus drop from here. :s Which is kind of funny because I believe we have sideways action (trading range) until about that time also by my chart work. :?

 

[Dave M]

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663 posts in 30 days, all saying the same thing. Boring!

 

[Guest]

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I find you posts extremely insightful and have learned much by your posts here. Thanks!

 

[coolhand]

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Hey Dennis, I'm am becoming more and more inclined to agree with your line of thinking. Even if the Fed does not pause right away this market is going higher. We are not remotely ready for a recession and inflation is a figment of our imagination...LOL! Oil apparently does not matter and sooner or later investors are going to start to understand that. Funnymentals and technicals can't give us the complete picturein a market like this.

Asset appreciation has gotten us here and I suspect it will continue for awhile yet.

Iwill start phasing in my capital soon. I've got that lighter...you ready to take off???

 

[Birchtree]

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That was a nice little panic sell precipitated by the hedgefunds that happen to be short up to their eye balls. This is one time I firmly believe the herd will focus on the Fed rather than oil. They will not be led into panic selling, when rates are about finished or perhaps finished. Energy will provide the new leadership to give the market strength to rally from this point on to new highs.

No panic in the oceanic account - lots of energy in there. Suspect if you didn't buy today during the emotional sell off - you will have to payup later. The tugboat account (TSP) will just roll with the market waves. I have no valid reason from my investing perspective to change strategy on a short term move.

The yield curve will not invert because the Fed will not raise rates on 6/29. - they will pause. Heck, by then oil may be $62. The price of oil will act as a tax to slow the economy - hopefylly not to the point of recession. Inflation will not bleed into the consumer - and thus will remain contained.

 

[Guest]

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If there is no panic. Why do you keep saying there is no panic?

Oil is not a tax. It is recessionary. The gov can control the tax rates. Theydo not control the price of oil

That is like saying food prices going up 8.4% yoy is a tax.

The warmfuzzy with the backward indicator PPI/CPI being lower because of LOW CRUDE has warn off. Reality has struck today. Was just a matter of time. Funny crude was over 60 a couple days last week and yet the CNBS people were hopping up and down on the great PPI/CPI data. You were hopping right with them.

oh yea - IMHO.

 

[Birchtree]

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I have mentioned on other threads that corporate insiders (? smart money) are now more bullish than they have been any time since May 2003, when the Dow was trading around 8,500. Argus Research publishes the Vickers Weekly Insider Report. It reports a number ofaggregate statistics based on insider buying and selling at all firms; the one on which it places the greatest importance is a ratio of the dollar value of all insider selling over a trailing 8 weeks to total buying. The 8 week sell/buy ratio now stands at 2.52. As recently as last December, this 8 week ratio stood at 6.40.

In May 2003 the ratio was 2.44. Why is a ratio of 2.52 regarded as positive? The answer is that insiders always are selling more of their stock than they are purchasing. That's not the issue. Instead, the question is whether they are buying or selling more than the historical norm. The normal ratio is closer to 6.5 to 1. Therefore, the current ratio of 2.52 suggests that insiders (smart money) are selling at much less than normal levels. Several of Argus Research's newsletter model portfolios currently are more than 70% invested in equities, up from near zero at the beginning of the year. I'll take that as a bullish sign.

Here is an important fact to keep an eye on. If the Institute for Supply Management index (ISM index), which is due this Friday moves down instead of up past the previous level of 51.4, the Fed would have reason to pause. The consensus is for a reading of 51.5. They have never increased rates with the ISM index with a value below 50. That signifies contraction. Will they know this number a head of time when they meet 6/29 and 6/30? I would presume as much.

 

[Birchtree]

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Like she said in the "Thomas Crown Affair" and you thought we were done?

The recent new highs on the DJ Utilities and the NYSE cumulative daily advance - decline index are encouraging because these measures usually hit their final peaks in a bull market cycle before, not after, the final peaks on the DJIA or the sp500. In fact, the DJ Utilities index peaked before the DJ Industrials at six of the last eight major market tops. I like those odds.

Here is a not so-rhetorical question: how is it that the yield on the 10 year Treasury note yield could back down to 3.5% in the coming months. The answer is in the macro view. The prolonged weakness in the LEI (May marked the fifth consecutive month of flat or down numbers) strongly suggests that economic growth will continue to moderate. Moreover, a break is developing in the pipeline of pricing pressures; as a result there is the potential for inflation expectations to recede in the coming year. It is difficult to see how inflation would come back on a sustained basis no matter what happens to oil prices, which will likely serve more as a margin squeez on producers and a tax increase on consumers than a pervasive source of upward pressure on final selling prices. Should be a good week this week.

 

[tsptalk]

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I suggest you change your sub-title from "contrarian view" to "bullish view". You are not a contrarian and you are confusing those who are trying to understand what a contrarian is. You are a bull, no matter what happens. Not that there is anything wrong with that. You are just misrepresenting your investment style. Either that, or you don't know the difference yourself.

 

[Birchtree]

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Tom,

My perspective tends to be longer term related - that's where the misunderstanding is developing. I have a tendency to ignore a lot of the short term noise. But make no mistake I am a contrarian by investing nature. I gravitate to doing what is the difficult maneuver. I was bullish from a contrarian stand point at the tripple bottoms, and will be bullish all the way to Dow 13000 and sp500 of 1700. Then the contrarian side will take over when I become bearish and everyone else is still bullish. Perhaps my definition of contrarian has some flexibility that gives me built in maneuverability. It's the only way I know to have any chance at making money. Usually always going against the grain - but then prudence may suggest the grain is on my side for awhile. If the markets continue to correct - the herd mentality will change to being short term bearish - but I'll still be holding a contrarian bullish posture and eventually you will be forced by your contrarian nature to join me. Does that make sense. I have to do what I've discovered over many years of good and difficult times works for me.

Here is an example from a long term perspective. Many participants that are approaching the time close to retirement have always been told they should be even more conservative at this point in their lives. Not me - it took a long time to acquire and accumulate my capital base - now is the time to let it work aggressively with 100% leverage if the market is in a long term bullish trend. Granted, not everyone would feel comfortable taking agraduated risk - but TSP folks who learn from this site have more knowledge on their behalf. That is the primary benefit of the service you are providing. I'll leave the gate to the bullish pasture open...Take care

Dennis

 

[tsptalk]

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con·trar·i·an (kən-trâr'ē-ən)

n.
One who takes a contrary view or action, especially an investor who makes decisions that contradict prevailing wisdom, as in buying securities that are unpopular at the time.

[line]

You've probably heard me talk about the 3 legs of a market - Pychology, monetary conditions and valuation. Pychology is the one giving us the most trouble right now, too much bullishness. And that's an intermediate term indicator as opposed to the survey data (short term) which is also too bullish.

I was bullish from a contrarian stand point at the tripple bottoms,

OK, I'll buy that.

and will be bullish all the way to Dow 13000 and sp500 of 1700.

That's where you lose me. That's a bull, not a contrarian.

Then the contrarian side will take over when I become bearish and everyone else is still bullish

I'll buy that also but you are talking years here. When the market was down you were bullish, with the market rallying near new highs, you remain bullish. Maybe in a couple of weeks the herd will turn bearish again. You say you won't turn bearish until the S&P goes up 42%. Again it just sounds like you are a long term bull. And there's absolutely nothing wrong with that in my opinion because I share your enthusiasm for the next 2 or 3 years for the market.

Anyway, I do like to have all sides of the story being told here so I appreciate your market commentary. I find some of these arguments we see here about whether the market is going to go up or downrather futile. Most of us have our mind made upbased on our indicators, or whatever, so I rarely take on the opposition. I just listen to both sides.

 

[Mike]

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Tom, if nobody "took on the opposition", we'd never gain exposure to the differing perspectives. :^

A few months ago, I had no idea what the significance of the "yield curve" was. Now, I do. Just another arrow in my investor's quiver of knowledge. :l

The site can be as informative as the individual wants it to be. I'm closing in on my one-year mark here, and I'd say I've learned an awful lot.

It all just sort of feeds on itself. When I carry on regular discussions with people here about what's happening, that motivates me to read more to stay on top of things in order to offer useful insights. This leads to a more advanced level of knowledge for everyone involved, which *hopefully* will lead to better investing decisions.

That type of thinking spawned the TSP sentiment idea. After awhile, we'll know how our sentiment stacks up against the market's performance. It's too early to tell now, but after a couple months, we'll start to see a pattern emerge - and perhaps this too will provide a useful bit of information to consider - that's the long-term goal, anyway - if we can get a 75% correlation one way or the other, I'll be happy.