Re: Birchtree's account talk
As long as profits keep rising and inflation and interest rates don't soar, or the creek don't rise, and as long as the world avoids a geopolitical crisis, global economic strength should keep any stock pullback temporary. So says Ferdinand, a big proponent of the mega trend secular bull market, make that a raging bull market that will run all summer long. The job market numbers will not be hot tomorrow but rather goldilocks. With rare exceptions, the yield of the 10 year Treasury has stayed belowq 5% since mid-2002. That is a level it had rarely been below since the 1960s. A year ago it briefly pushed to 5.25%, only to fall back amid hopes of Fed rate cuts. The same thing will probably happen this time. The low-rate, low-inflation environment was one of the main pillars of the bull markets that Americans enjoyed for most of the 1950s and 1960s. Hopes for another long-running bull market depend in large part on a perpetuation of that environment.
When the ratio adjusted A/D line of the NYSE stocks breached its' 1959 overhead resistance line I knew we were going to rock-n-roll. And it gave us a higher degree of wave 3 of Primary 3. And there is plenty of air between today's value and that same resistance line. I doubt now that it will ever touch it's 1% trend - even after a 48 year wait. Stocks remain reasonably priced, measured against corporate profit gains. The SPX index is about 17 times member companies earnings over the past 12 months, only slightly above the average of about 16 in recent decades. The market's ability to withstand so much negative uncertainty could depend heavily on the quality of second quarter profits, due to begin flooding the market in the next few weeks. There have been very few negative earnings preannouncements this time around. Maybe the recently released two ISM reports will be a harbinger. And besides the Chinese may be on their way to invest in the world's most undervalued market. I can be patient and wait for them.
My oceanic account is now at its highest level ever - even more reason to be right and sit tight. I've got 233 individual stocks working for me. I've already taken out a profit of $141,444 so I really don't want to take anymore unless the market slides and I have to once again sacrifice a beauty to raise cash for fresh purchases. Somebody will have to pay the damn taxes. Since the A/D line is not diverting, and it's very rare that price will top without A/D divergence the lite is still green - don't quit now my friends. Within Elliot, the third of the third is known as the point of recognition, the epicenter of an enormous advance which I believe is in the initial stages. Only in third waves can such occurrences happen where breadth of market makes higher and higher highs.
If the dollar does move back to the 80 level, history has shown this to be very bullish for the U.S. markets - just look at 1995. My chemical stocks were hot today in a flat market - I 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. Please be in to win. This is how funny the market can be: when it dropped 196 points I got clipped $42K in one day, when it dropped 186 points another day I got clipped only $14K. When it was up 126 points the other day I made $30K and today when it was down 11 points I made $10K - the lesson is not to take the daily bumps and grinds to seriously. Keep your eye on the A/D line it will tell you when the trend changes.
