Birchtree's Account Talk

[Birchtree]

Re: Birchtree's account talk

Not to sound tendentious these days but if the dollar does a roll over and declines during the coming months, the delays in the response of exports and imports to the more competitive dollar will mean that the increase in aggregate demand from this source may not happen far a year or more. The key to our continued expansion if consumer spending slows, must be a shif in our trade balance - increased exports, lower imports and more spending on goods and services produced in the U.S. Fore this, the dollar must decline to make U.S. goods and services more attractive. That's why the U.S. needs to shift to a more competitive dollar as soon as possible. What would make this happen for the I funders? A narrowing gap between U.S. and foreign interest rates provides the right macroeconomic framework for the dollar decline. Who will benefit the most - the C fund primarily and then the I fund.

 

[airlift]

Re: Birchtree's account talk

Re: Market Talk / October 8th - 14th
Birchtree, --

You may be right after all! I am not married to any fixed idea, although I am waiting for the right conditions to arise in order to get back to the I fund. I am staying alert to changing conditions. However, I read not only your post in your account thread as well as the last post by Robo, who is currently in the G fund and likes to trade the I fund for short-term moves. Many of us are counting on a declining dollar but this could be a fluid situation; and, as you stated, perhaps the C fund will benefit primarily more than the I fund. --

 

[Birchtree]

Re: Birchtree's account talk

Decided to do a little buying on top of the mountain - just in case the mountain gets larger. I acquired CBI, more GDI, SSD, and AA. Alcoa had what I would regard as good earnings - but the street is not happy.

 

[Birchtree]

Re: Birchtree's account talk

The S&P's relatively narrow trading could be consolidation before an eventual explosion higher. If the S&P 500 breaks through the upper channel and holds it on a retest, that will mark the beginning of a new upward bull market trend. I feel it, I really do. The June/July 2006 bottom had the worst total put/call ratio in the last 12 years. No body is bullish - except the one lonely Ferdinand. I see an Elliot Primary wave 3 to the upside in my future. Any idea what that means? It means this wave can run on for years.

 

[AIF]

Re: Birchtree's account talk

Don't worry, I know what this is about. I'm the one with the idiot mantra and the damn C fund that keeps stinking up the place. Well that's just tough chitty said kitty.

I read your posts too. Sometimes I don't understand everything you say but I'm trying. You are very consistent in your approach, unlike the constant Sugar and Spice battle. But hey, I like it all.

 

[Birchtree]

Re: Birchtree's account talk

AIF,

There is plenty of room for everyone. These Live Free or Die guys are just hard to convert, that's all. I'm very familiar with the type. I was raised in New Hampshire on the other side of the White Mountains - and if he wants to sit in that G fund until Spring thaws well that's entirely his business. But this idiot will have to find a larger bank soon - the C fund is filling my pockets and I'm creeping past his yearly goal with his admirable help.

 

[mayday]

Re: Birchtree's account talk

The S&P's relatively narrow trading could be consolidation before an eventual explosion higher. If the S&P 500 breaks through the upper channel and holds it on a retest, that will mark the beginning of a new upward bull market trend. I feel it, I really do. The June/July 2006 bottom had the worst total put/call ratio in the last 12 years. No body is bullish - except the one lonely Ferdinand. I see an Elliot Primary wave 3 to the upside in my future. Any idea what that means? It means this wave can run on for years.

Who is Ferdinand? What do I do when I start hyperventilating?

 

[weatherweenie]

Re: Birchtree's account talk

Birch, First off, kudos on staying long. After much angst, I'm going to dip my toe, lower half, 60% of my funds, into the market.

Since I'm new here, my question is, do you stay fully invested all the time, or do you take $$ out and sit on the sidelines from time to time?

 

[nnuut]

Re: Birchtree's account talk

HAW!

 

[Birchtree]

Re: Birchtree's account talk

Mayday,

Ferdinand is the Disney bull that liked to smell all the flowers - rather than go to the ring.

weatherweenie,

I have no reason to get out at this time - if we correct I'll absorb it and use my DCA to get the lower pricing. There will come a time to trade but I have my goal of Dow 17,000 and SPX of 1700, so my mantra is be right and sit tight until those levels are attained. Now I am selling and buying in my outside stock account and have taken some profit off my wifes' small cap fund, reinvesting it in her international fund. If we get a surprise 4 year low then I pay the price, but I believe it has already passed. This market can easily go 3,000 points from where we are now in 12 months time. I wouldn't be interested in trading that power.

 

[Birchtree]

Re: Birchtree's account talk

Part of the problem going forward is that any corrections may be done on an intraday basis, rather than closing. From a TA standpoint the NYSE breadth MCSUM is now above a longer term key resistance point and any price corrections should be contained because of this money strength. It's hard for price to move lower the higher the MCSUM is. I think we have something very strong on the way. Because of my age I have the benefit of having seen and lived this strength previously - and it's not something you easily forget and it doesn't happen often, and when it does there is usually overwhelming skepticism - which gives me confidence.

 

[nnuut]

Re: Birchtree's account talk

You GO Birchtree, we all know you ARE making MONEY! Almost caught me!

 

[Birchtree]

Re: Birchtree's account talk

Hey Nnuutrageous,

And can you believe that some are actually disenchanted with the fact that others are making money. I need all the investing friends that I can enjoy because I need their help. For example it would be good to finally get something productive out of the Technician - he could be helpful in keeping an eye out for the distant top. At some point I'll post the numbers on my Oceanic account and see if I can blow off some socks. I'm going to be cruising the Dillards area and Blue Ridge area and into NC starting next week looking for some summer home land. That'll be a treat - so I'm walking away from the market for awhile - it'll take care of itself. Snort

 

[weatherweenie]

Re: Birchtree's account talk

Part of the problem going forward is that any corrections may be done on an intraday basis, rather than closing. From a TA standpoint the NYSE breadth MCSUM is now above a longer term key resistance point and any price corrections should be contained because of this money strength. It's hard for price to move lower the higher the MCSUM is. I think we have something very strong on the way. Because of my age I have the benefit of having seen and lived this strength previously - and it's not something you easily forget and it doesn't happen often, and when it does there is usually overwhelming skepticism - which gives me confidence.

Interesting, 'cause I participated in the Tech Bubble, both to the upside, and downside.

Then I was in the camp that the sky was the limit.

Now, after being burned, I'm in the 'lets wait for a better entry' camp. Needless to say, its cost me this week.

 

[Birchtree]

Re: Birchtree's account talk

I pretty much avoided the tech bubble - staying in dull and boring stuff that no one wanted. Played the small cap game starting in 1999 when they also were unwanted - so yes every cycle provides a learning experience. Have no fear - this cycle will be different with different consequences. Do you remember the nifty fifty - that was part of the 70s. I watched Avon go from 120 to 20 in six months. So this is definitely a dangerous game - there were also some October massacres that appeared to have no bottoms - that was late 70s. And in the investment business everyone has an opinion - believe only 50% of what you read and even less of what you hear - and always run in front of the train.

 

[Birchtree]

Re: Birchtree's account talk

I'm being careful not to alienate the I funders today - but Pearl Harbor may be on the distant horizon. U.S. equity investors have shifted a record proportion of their funds into foreign share markets this year as investors chase returns from overseas and emerging markets which have been outstripping those on Wall Street. 17% of equities held by U.S. mutual fund investors sit in funds containing foreifn companies. This is the highest percentage of international securities holdings by domestic mutual funds on record. It also represents a doubling of this share since August 2000. AMG data also show that of the $124 billion invested so far this year into U.S. equity mutual funds, including exchange traded funds, fully $110 billion, or 89% has gone into funds investing in overseas companies. As a contrarian this information perks my ears up. This situation will not reverse overnight - but when the transitition comes this money will begin to flow back to the U.S. oriented funds. Who's the herd baby?

 

[nnuut]

Re: Birchtree's account talk

Hey Birch, here's more kindling for your "C" fund fire!
http://www.fedsmith.com/articles/articles.showarticle.db.php?intArticleID=1055

 

[Birchtree]

Re: Birchtree's account talk

What would be the most important sign that the markets have peaked? A full capitulation by investors, primarily by fast money. That would be evident in a move by sentiment indicators to excessive optimisim. Currently the CBOE put/call ratio remains high, fast money is still short high beta indexes and Merrill Lynch is still bearish. They continue to believe that the DJIA and SPX face possible corrections of 15% to 20% and the NASDAQ faces a possible setback of 30%. I'll take the opposite side of that bet. It's good to see them not capitulate yet. From Volkmar Hable a routinely bearish fellow, " It is often the trade that is hardest to take, that winds up being the most profitable." My bad, that's from an article that Robo posted from Fibtimer.

 

[Birchtree]

Re: Birchtree's account talk

I'm going to be out of pocket for a week - up in the Blue Ridge looking for overvalued land and relaxing. Since I'm 100% leveraged into the C fund I'm leaving myself some words of wisdom: Investors need to remember what might be the most important consideration when it comes to employing leverage - the underlying asset that is being leveraged should be undervalued. Using leverage to purchase overvalued assets has rarely been a successful strategy. I would like to make $50K this week - is it possible, yes, is it probable, no of course not. Hope springs eternal.

 

[Birchtree]

Re: Birchtree's account talk

Danny Rollings goes to hell tomorrow - he killed and mutilated five of our students 16 years ago - and the lazy state is just now going to kill him. Smuck.

I notice that Tom has it right: "The bulls are having a field day and those hanging in there are being rewarded handsomley." Snort. Classic!

Yes, new longs should wait for the next correction. Maybe in the Spring sometime.