Birchtree's Account Talk

[FAB1]

Birch,
I seriously hope tomorrow is the biggest GAIN of the year.

Mainly because I miss Corepuncher and he has finally broken the seals to the Bunker and decided to go in.

Core said he wanted to grab 1% and dig back in, reckon he did but check the tracker...

Vix? I dont care about no stinkin' Vix!!! IN TO WIN!!! yea baybay! :laugh:

UPDATE: corepuncher is still IN. dont stop the world and get off yet

 

[Birchtree]

The VIX is down nicely this morning to 18.55 that's down 0.51. It could be predicting a turn to the upside. Energy stocks are hot today.

 

[FAB1]

The VIX is down nicely this morning to 18.55 that's down 0.51. It could be predicting a turn to the upside. Energy stocks are hot today.

Sweet!

The indicators are not always reliable - sometimes the Market has a mind of it's own!

 

[Birchtree]

"People! Wake up! It may be difficult to imagine, but we're going to have to have this recovery and expansion without housing. In fact, we already are. The economy has staged and extremely dramatic turnaround, from contracting at an annual rate of 6.4% to growing at a 2.2% rate in the third quarter. Macroeconomic Advisers say Q4 growth is tracking at a 4.9% annual rate. If that proves true, the economic growth rate will have risen 11.3% in a nine month period - an astonishing shift."

http://www.newsweek.com/id/229605

 

[Birchtree]

"Sonders Optimistic on 2010 - Cautiously."

http://theguruinvestor.com/2010/01/08/sonders-optimistic-on-2010-cautiously/

Be sure to check out the excellent read on Schwab's web site - the link is provided.

 

[wv-girl]

"People! Wake up! It may be difficult to imagine, but we're going to have to have this recovery and expansion without housing. In fact, we already are. The economy has staged and extremely dramatic turnaround, from contracting at an annual rate of 6.4% to growing at a 2.2% rate in the third quarter. Macroeconomic Advisers say Q4 growth is tracking at a 4.9% annual rate. If that proves true, the economic growth rate will have risen 11.3% in a nine month period - an astonishing shift."

http://www.newsweek.com/id/229605

So the market is happy with the jobs not created? Who is wall-street going to get their money from when the rest of us are broke? The Feds printing press? And how long can this continue?

 

[Birchtree]

I just finished chasing the bull and bought: AOS, AP, ALB, AME. If we can rally I'm back in for more. Mindylou says buy, buy, buy.

 

[Buffalo_Nickle]

The Military,.. they are the real stock market today.

 

[Birchtree]

A few more purchases on the close to keep Mindylou happy: BMY, MTW, AES, ATLS, AZZ. The dropping VIX should make more investors feel better and comfortable with this market - build the bull market and they will invest. It's time to start looking over my shoulder.

 

[Birchtree]

"Bullish Sentiment Drops Substantially."

http://pragcap.com/bullish-sentiment-drops-substantially

 

[Birchtree]

"Why would worldwide copper prices follow American stock markets with such precision? One reason only. The mighty advance in US equities has set the tone for universal sentiment. Traders nearly everywhere, trading nearly everything, are seeing the continuing SPX rally and assuming it means underlying economic conditions are improving rapidly. So they are bidding up nearly everything else with it."

http://safehaven.com/article-15433.htm

 

[Birchtree]

At first glance it would appear my oceanic took in $122K this week. That's fine but that leaves me $42K from my initial goal of $1M off the March lows. I should be able to make that up in the next week which is week #45. If we get a strong move reminiscent of a bullish stampede I'm going to throw some major coin into the fountain - probably around $100K. The time is now especially if we might be looking at a runaway market. The bullish sentiment has eased some and the VIX will undoubtedly head into the 17 range. The SPX just finished 5 days in a row to start the new year - that has only happened three times in the past. The market subsurface is in very good shape as evidenced by the performance of the NYSE composite advance/decline line.

 

[Birchtree]

Frankly folks if I could have my druthers I would like to increase my margin debt to $3M in 2010 without interest rates going up - that would be perfecto. But we all know that rates are going to increase so it becomes a race against time. The market will only give me what it will give me. I don't recommend anyone try this approach at home. But leverage can really increase profit potential in an extended bull market - and I may be safe for three to five years if not longer. The money game is starting to flow and I'm going to try and keep all the assets working until they are really overvalued like my commodity stocks were back in the summer of 2008 - then I'll redistribute those profits in another sector or direction. I've got to rebuild my land money savings back up - but I can do that slowly.

"For now, no matter how many red flags there are, the bulls remain in firm control of this market. Shorting just hasn't worked off the March lows for those stuck in that frame of mind. Our advice remains to stick with the primary trend in place until it is no more. Rotation is the game. Money is still not leaving this market."

http://safehaven.com/article-15439.htm

 

[Birchtree]

I wanted to mention something about the big drop in the VIX on Friday - down 0.93 to 18.13. That seems like such a large drop for the small gain in the SPX we got. Could simply be a lot of short covering sales from the over stimulated call options. Or the VIX may be sending a message for next week - get out of the way or get trampled by the thundering herd of bulls. My Ferdinand seismograph is starting to spike with potential rumblings. You have to put your savings at risk in quest for profit.

 

[CrabClaw]

hey Birch, have you changed your strategy regarding the VIX 20 level that you were originally looking at for pulling some out? Just curious what has changed? You don't seem that concerned about it now. thanx

 

[Birchtree]

You have to look at the VIX from a contrarian perspective - when it drops this low (18.13) and heading lower it's indicating that the SPX will continue to move higher. My plan is to sacrifice 5% from my I fund position sometime next week into the G fund - I know it's almost heresy but that's what contrarians have to do in the face of overwhelming bullish sentiment from the VIX. Chances are the VIX will continue to fall to the historically traded 15-17 range. More and more investors will become less skittish as the economy continues to normalize and eventually it will happen - the big slap. I may have 30% in the G fund by then - at least that's the plan. I have one more DCA next Friday and that's it for my contributions. I'm graduating to an official swing trader with substantial shares under my belt to push around.

 

[Birchtree]

"You could hit bulls with all manner of negative data and nothing seems to stop them. Why? Because zero interest rates, overwhelming liquidity and the belief bailouts are here to stay means risk taking has no negative consequences. 415 new 52 week highs on the NYSE."

http://pragcap.com/weekend-reading-28 The bulls are on the loose.

 

[Birchtree]

It will happen again. 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. "Now that the Dow has rallied almost 4,000 points from its lows, the experts are snapping out of their panic induced stupor, the masses are wondering what in the hell possessed them to dump everything at or very close to the bottom and the few that resisted the urge to surrender and give into panic are finally feeling somewhat vindicated. Acknowledging that fear is far stronger than any other emotion you posses is not an easy task, the next step is to understand that it takes effort, at times super human effort to knock fear out, and prevent it from spiraling into its ugly sister panic. Once you are able to do this, you will have the ability to deal with extreme amounts of fear without reacting like animals, in other words, you will have finally acquired the ability to stop and think instead of just reacting." Now that's a lesson.

http://safehaven.com/article-13097.htm

 

[Birchtree]

A few more words and I've got to go read my back issues of TWSJ - they cost too much to just let pile up. History has shown that you are most likely to earn the highest returns on the money you invest after the market has taken a severe beating. The reason is that equities have their best long term potential when investors are most fearful of buying them. And there's no doubt that today most investors want as little to do with stocks as possible evidenced by everyone piling into bonds. The stage has now been set for investment opportunities that will make anything I've seen over the last 30 years pale by comparison. "Contrary to popular opinion, I am of the view that most commodities and stock markets have seen the lows for the entire bear market and we may be in the early stages of a new cyclical bull market which could last for a few years. I would like to point out that new bull markets are always born during object pessimism and scepticism."

http://safehaven.com/article-12869.htm

 

[Birchtree]

If you've been wondering where the money is coming from to boost the market here is a small blurb from TWSJ: "Banks are boosting their lending to hedge funds and private equity firms to levels unseen since before the financial crisis, raising their risk levels and adding fuel to the buying power of key players across the stock, debt and buyout markets." Many funds will start cranking up leverage this year - just as I'm doing in my oceanic portfolio.