Birchtree's Account Talk

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Those wearing the rose colored Ray Bans argue that the fundamental back drop for stocks remains positive and that any dip should be bought for the foreseeable future. A properly allocated portfolio doesn't need to be rejiggered every time the weather changes. We are in the seasonally strong part of the year so please take opportunity. There is still so much fear causing investors to sit on the sidelines, just look at the clucks on our tracker, this bull market has a long ways to run yet. And remember, an increase in margin debt is really a story of investor sentiment. So you hoofhearted types should continue to ride the secular bull market, you want to be long this wild ride.
 
Mr. Birchtree what's your take on SAVE and ILMN? I like save because it will appeal to the lower financial classes. I like ilmn because of there advanced genetics tech. Thanks for your insight.
 
If you take into consideration that I'm not very good at picking individual stocks but prefer the shot gun approach I'll offer an opinion. SAVE (Spirit Airlines) is trading on their yearly high at $53.80 and is probably worth some of your money over the next several years. I'd dollar cost average into it to reduce risk. ILMN (Illumina) is also trading at its' yearly high at $174 and also may merit some of your money - but I'd simply ease my way in to it also. Any way you look at it, anything you buy today will be more expensive in the future and your gains will depend on your depth. This bull has many more years to run in my opinion. It is a great time to invest and build positions. Now that I think of it, ILMN is on my wife's list for purchase in her roll over IRA at some point this year - but my feline adviser, Mindylou, picked it out for purchase.
 
Mr. Birchtree, If you were just starting out your parabolic run to millions today with about 30k, what core stocks would you invest in and continue to DCA for 20 to 30 years? Thanks in advance for the wisdom.
 
One stock I would definitely look to own for the future is GE. Then AGCO, AOS, DOW, RPC, GMT, OKE, TKR, VMC, MAS, AVA to name a few. There are just too many wonderful wall flowers out there that need cuddling - that's why I own 300. Just take your time and build slowly and you'll be rewarded.
 
Thanks, also trying to teach one of my relatives that will be graduating soon...how to hunt so to speak. Hopefully his interest will grow.
 
It was an OK week for my oceanic: +$21K, -$49K, +$60K, +$9K for a four day gain of +$41K. All I need now is to make +$46K next week to balance out my -$196K loss for January and then I can begin the rest of the year with a clean slate. I did catch several months in 2013 where I brought home several +$300K floral baskets - I would like to do that this year if the market is willing. Could we have a repeat of the 1997 through 2000 market when there was a 91% total gain for the period. I'll take another 30% and be happy.
 
This could mean that mom and pop and even the kids are headed our way - make room because the rampaging bull is going to accelerate.

"Average daily client trades at E Trade Financial totaled about 160,000 in the fourth quarter of 2013, up 25% from a year earlier. At TD Ameritrade, clients made 414,000 trades a day on average in the quarter ended Dec. 31, up 24% from a year earlier. Charles Schwab Corp. customers made 488,000 trades a day on average, up 8%. The trend continued in January, even as stocks fell. At E Trade, daily trades were up 27% from a year earlier. At TD Ameritrade and Schwab, the increases were 28% and 17%, respectively. TD notched a record number of monthly trades in January, Charles Schwab hit a five year high and E Trade reached a level unseen since the 'flash crash' of May 2010. Not only are investors trading more, but they also are borrowing more against their portfolios to increase their bets. In December, margin debt hit an all time high of $444.93 billion, not adjusted for inflation, up 35% from a year earlier. The increased trading activity reflects a level of engagement not seen for quite some time." Someone, open the door and let'em in.It's going to take years to bleed off the bond market.
 
Thanks for the advice on save and ilmn.

What do you forsee the market doing and can you paint the picture for me of what the end of this bull will look like? Thanks again.
 
I can boil it down to one sentence. When the breadth continues to roll over with the NYSE advance/decline line going down but the primary prices continue to hit new highs that's a tell tale sign things are going to get worse. There is also the death cross to keep an eye out for happening when the 50 SMA crosses down over the 200 SMA. I don't believe we'll see a new cyclical bear market for several more years and then it will be inside a secular bull market so won't be a tragedy.
 
I would also note to mention that we recently had a Zweig breadth thrust signal on 2/18. Historically, this has meant much higher prices ahead any where from 14% to 21% in the next 6 months. The NTSE advance-decline line was overwhelmingly positive for Feb. 18th. So I would anticipate much higher prices to come - now whether we blast right on through 1848 or go through as a throw over only to have to retest to smooth out the oscillators and sentiment - I can only guess. But I do know we are headed much higher. Snort
 
C'mon now 1848 will not be denied and then we're right back into uncharted territory. The MACD daily provided a buy signal and this marks the biggest surge in momentum since November 2012 lows which set the stage for a strong multi-month rally. A Zweig breadth thrust also occurred on November 12th, 2012 and the SPX continued on to place a 21% gain in six months.
 
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