Birchtree's Account Talk

[Bullitt]

Re: Birchtree's account talk

Why not share my ideas with others to help them learn - after all I am an evangelical buy and holder most of the time.

Aw come on Big Bull. Why would anyone ever want to just buy and add to an index fund only settle for the average if there's always the possibility of market outperformance?

They'll never follow your manure trail to sunset like ET followed the Reese's Pieces trail home.

 

[Birchtree]

Re: Birchtree's account talk

I believe we will take out the previous MCO highs today and that will give us a technical MCO buy spike. If the NYSE breadth MCO is able to take out the early April highs a new price objective to around 9750 level on the NYA will be placed.

 

[Birchtree]

Re: Birchtree's account talk

The April MCO high was +55.80 and the January high was +79.57. The CO NYSE breadth MCSUM still has some overhead resistance to overcome which would take a higher high in the MCO to accomplish this. The NYSE breadth MCSUM is right up against its declining tops line at -119. Our base building will be complete if the declining tops line on the MCSUM is violated and then it's a buy. The summation failure point from last year was at the +250 level - inorder for the bulls to have any chance of breaking above last summer's highs, we must move above this same level - I'll be watching for the breakout. This level is all important to the longer term expectation of what prices will do. Looking at the components, while the 10% is back above its zero line, the all important 5% component is currently negotiating this same zero line. When you can pull all this together, this is the kind of synchronization you want to see in the internals.

 

[Birchtree]

Re: Birchtree's account talk

Now for a small history on my last I fund venture. I returned to the C fund on 10/15/07 out of the I fund at $25.74. I started getting back in on 11/20/07 at a price of $24.68 and continued to DCA at prices of: $24.20, $25.32, $25.18, $25.52, $23.93, $24.08, $24.54, $22.73, $21.58, $21.45, $22.33, and finally $22.83. It won't be long and I'll eventually be in the profit zone. With a current price of $23.72 I may wait it out for a price of $27.00 before I return again to the C fund. I believe the highest price on the C fund was $17.54 on 10/10/07 right at the market peak. The highest price on the I fund was $26.31 on 10/31/07. I'm currently deliberating about doing a little more DCAing into the I fund in the $24.00 range.

 

[robo]

Re: Birchtree's account talk

Birchtree,

It looks like they might be coming home.


Robo


Advisors Are Moving Back Into U.S. Funds

TODD RUSTMAN, co-founder of GR Capital in Newport Beach, Calif., has an office that is just a short drive from a majestic view of the Pacific Ocean. The last few years a large chunk of his clients' money has been invested in markets that are thousands of miles across that body of water. The bets included stocks in Asia, India and, on the other side of the globe, Europe and the United Kingdom. He considered the moves a perfect way to diversify his portfolios.

There was a profit motive at play, too. The typical international fund returned 16% last year vs. 6.4% for their domestic counterparts. In fact, that has been the story for much of the last decade. The difference was even more pronounced for emerging-market offerings. They posted average returns that exceeded 36.4% in 2007. All that wasn't lost on many investors: According to Lipper, a net $63.3 billion flowed into international funds last year while $38.4 billion headed for the exits of U.S.-focused offerings.

But Rustman, like many advisors, is starting to reconsider that decision. He's not completely abandoning international mutual funds. However, after months of reading miserable headlines about the stock market, Rustman and others think the U.S. may have finally bottomed out. Now, they say, is a perfect time to start trimming international or using cash to add to U.S. exposure on the cheap in anticipation of the inevitable rebound. Studies have shown that asset allocation — a term used to describe the industries or sectors your portfolio is exposed to — is one of the main influences on returns. So any time the experts start changing course we like to see if there is any wind in their sails.

http://www.smartmoney.com/fundinsight/index.cfm?story=20080417-mutual-funds&hpadref=1

 

[Birchtree]

Re: Birchtree's account talk

Poor me, my oceanic only took in $83K last week leaving me $17K short of my weekly goal - perhaps the coming week will treat me better. One of these days I will achieve my goal of a $100K week - until then I will gladly accept what the market delivers.

Technical analysis 101 says that an uptrend is a series of higher highs and higher lows. In recent weeks, many commodities have corrected, pushing the CRB index down. Even so, the uptrend from January 2007 remainsa intact and the dominant trend lines are unscathed. Aided by near-term momenyum, the CRB is now positioned to move to new highs. Such a rally could bode well for three of the sectors I favor - energy, materials, and industrials. Those sectors make up 29% of the S&P 500. The CO NYSE breadth MCO closed the week at 53.20, next week we'll get the April high of 55.80 and maybe even the January high of 79.57. The CO NYSE breadth MCSUM closed above its declining tops line at -65.65. We are now on our way to the zero line and will probably spend months above this line. There has been a pattern of conviction with large post separations in the MCSUM which tells me that money is on the move and coming into the NYSE index. If we can take out the MCO spike high of late January we'll be looking at new all-time highs once again.

 

[Birchtree]

Re: Birchtree's account talk

"Increasingly the emotional factor is becoming the key facet that drives these markets up or down. This emotional factor is gaining momentum simply because the number of players in the last 10 years has exploded exponentially and it's getting easier and easier for individuals on any part of the globe to trade in the Worlds most liquid markets. Thus it also becomes easier to manipulate these very same (TSP) individuals because they all seem to tune to the same source for the news....that of convincing the individual that all hell is about to break loose."

http://www.safehaven.com/article-10016.htm

 

[Birchtree]

Re: Birchtree's account talk

Consumer confidence hasn't been this bleak in more than 25 years, and people's expectations for the economy are the worst since the inflation=ridden mid-1970s. I mean bull markets don't start when everything is cheery. "The longer it takes for people to throw in the towel on bearishness, the more bullish it is," said Mark Hulbert. The SPX closed at 1310.50 on Jan.22, a day that saw 1865 new lows. The SPX retested that level on March 17, closing at 1277. Although the benchmark breached January's base, the number of stocks hitting new lows was 1236. That was key support. The market always starts to improve 6 to 9 months before the economic fundamentals.

According to Raymond Merriman - "this forthcoming week is one of the most intense weeks of geocosmic activity this year. After the Sun enters Taurus this Saturday, April 19, there are six major aspects between planets the following four days. It starts with the Sun making a grand trine to Saturn and Pluto on April 20-21....Friday's big upday in the stock market is a step in that direction, and it might continue to lead to higher equity levels as we start the new week." Well I hope so.

 

[Birchtree]

Re: Birchtree's account talk

http://www.safehaven.com/pdf/eliades_2008_04_17.pdf

Some of the agriculture stocks continue to run hot today - MOS at $139.33 +4.08 and AGU at $92.15 +4.11. If we were at an intermediate top I'd be concerned about this run, but since we have many more points to go I'm staying on the commodity train and will continue to let the profits run - even though my emotion says to peel off shares for profits. Will the new potash IPO be the top - perhaps but I'll stay around for a few more $K.

Check the above link for an interesting read on historical fact and cycles - I do not agree with the conclusion but that's not important.

 

[Birchtree]

Re: Birchtree's account talk

The SPX inverse H&S has the neckline at 1408 - if the shoulder attempts a breakout look for SPX 1500 as a target. Currently, nearly 70% of stocks in the S&P 500 are above their 50-day moving averages. Even though the market is well below its highs from last October 9th, breadth is getting close to the same levels that it was back then. Evden 70% of stocks in the Financial sector are above their 50-days. Sounds mighty bullish to me under the radar.

 

[Birchtree]

Re: Birchtree's account talk

Some interesting graphs.

http://www.safehaven.com/article-10048.htm

According to Mark Hulbert, insiders are sending a very bullish message. Vickers calculates the ratio of all insider sales over a trailing eight weeks to all insider purchases. For the eight weeks ending mid April, this sell to buy ratio stood at 1.40 - 1. Vickers considers any ratio below 2-1 to be bullish. The last time insiders were as bullish was in November 2002, just after the end of the 2000 - 2002 bear market.

 

[fabijo]

Re: Birchtree's account talk

Some interesting graphs.

http://www.safehaven.com/article-10048.htm

According to Mark Hulbert, insiders are sending a very bullish message. Vickers calculates the ratio of all insider sales over a trailing eight weeks to all insider purchases. For the eight weeks ending mid April, this sell to buy ratio stood at 1.40 - 1. Vickers considers any ratio below 2-1 to be bullish. The last time insiders were as bullish was in November 2002, just after the end of the 2000 - 2002 bear market.

Definitely some interesting info. Now, the next step is to figure out where the next surge will be.

 

[Birchtree]

Re: Birchtree's account talk

"By now it should be abundantly clear to even the most recalcitrant pessimists that the stock market is well along its route to recovery. The internal momentum structure hasn't looked this promising in weeks if not months. When it comes to evaluating the syock market's potential, internal momenyum always precedes future price momentum and takes precedence over nearly every othert consideration"

http://www.safehaven.com/article-10066.htm

We currently have bull divergence in place on the CO NYSE breadth MCSUM. And it looks like today was the intermediate top on the agricultural stocks - I'll just ride through this rotational cycle like what else is new. MOS now at $122 will certainly bounce back to $140 within the next two or three weeks - I simple wish they would split.

 

[Birchtree]

Re: Birchtree's account talk

It looks like page 244 is not working.

The Fed does not have to cut next week - we currently have a Fed funds rate that is now below the 2 year note - a normal expansionary yield curve. This is the same position we were in in 2003. We are apt to experience an on coming tsunami of liquidity. The dollar is now moving because the yield problem has corrected itself.

 

[Bullitt]

Re: Birchtree's account talk

We are apt to experience an on coming tsunami of liquidity.

The big boys come out to play near the end of a rate cutting cycle and I hear there's lots of money on the sidelines these days. Let's do it.

 

[Birchtree]

Re: Birchtree's account talk

If the NYAD line goes to new all=time highs this would mean the ratio adjusted NYAD line had a successful snapback test of its 1959 longer term resistance/support line and that we'll have an ongoing advance that is confirmed by breadth. Howerver, if the NYAD line fails to move to new higha then any new price highs will present probable termination points on a longer term basis, something of which we usually see right before longer term bear markets. The previous set up took several years to unwind - I'm thinking '98, '99, '00. Currently price seems to be leading breadth and this will need to change. The internals suggest that the bull market wants to go higher and as long as the majority of chicletts remain anchored to the lilly pad Ferdinand will be happy. One should never ubderestimate the importance of a divergent structure on the CO NYSE breadth MCSUM. I'll be watching the post expansions on the MCSUM to see if good intermediate term money if flowing into the market.

Dennis - permabull #1

Oh, I almost forgot to mention that after the oceanic account gained $83K the previous week I only gave back $10K this past week because of some weak commodity stocks.

 

[Birchtree]

Re: Birchtree's account talk

"Yet if you were to sit down and calmly explain to the average folk that the invasion of Iraq has secured such vast oil reserves for the United States, that they will be able to continue their prolifigate lifestyle....."

http://www.safehaven.com/article-10087.htm

 

[Buster]

Re: Birchtree's account talk

This is where it all boils down to...I'm so there

If our evaluation of the situation is correct, and China continues to play ball by not dumping US dollars or Treasuries, despite the Tibet provocation in the western media, then the US stockmarket is poised for a powerful bull market advance, as the injection of massive amounts of newly created liquidity works its magic and eases the global financial crisis. This advance would initially take the market back to its highs, but should later continue on to new highs. The huge global increases in money supply are of course highly inflationary and should continue to fuel a robust bull market in commodities, including gold and silver, even if they get put on the back burner and continue to correct for a while as the focus shifts to the broad stockmarket. Right now the US stock markets are poised to break out above the crucial 1400 resistance level on the S&P500 index, an event that could easily trigger a 400 - 500 point up day on the Dow Jones Industrials.

 

[Birchtree]

Re: Birchtree's account talk

"The strongly positive slope of the yield curve guarantees that improving liquidity will eventually translate into an improved economic outlook. As of 4/24/08, the 2 year yield pushed high enough to exceed the Fed funds target rate (2.25) for the first time in two years. This is a very positive event for the financial sector as well as the economy. Another point worth considering for prospects for the economic recovery is the huge increases in money supply in recent months." We'll be back to a liquidity driven bull in no time.

http://www.safehaven.com/article-10088.htm

 

[Birchtree]

Re: Birchtree's account talk

Henry says that Trim Tabs turned 150% bullish from 100% bullish this weekend. Once panicked investors realize that their fears of a deep and prolonged recession are not materializing, U.S. stock prices can shoot up very quickly.