Birchtree's Account Talk

[mayday]

Re: Birchtree's account talk

When cycles go from virtuous to vicious there tends to be an underestimation of how painful the cycle will get. In the housing market there is going to be a reasonably significant amount of pain, and that will probably mean outright price declines in some areas. This deep pain has yet to unfold. But I'll be waiting.

A lot of people have been sitting out this dance, and before we top out, I think we are going to get them in. The current upswing, which began in October 2002, has run for almost four years and is the fourth longest since 1900. But it hasn't been particularly strong, a reflection of investor reservations following the excesses of the 1990s and the bust of 2000-02. The Dow's 61% gain from the closing low of 7286.27 on 10/09/02, remains below the 85% average total gain for bull markets since 1900. The market will eventually demonstrate that Ferdinand is anything but average. This bull will be thinking about the next Fed rate easing and the longer the anticipation the higher we roll.

So now are you saying we are topping out on the 4 year cycle?

 

[Birchtree]

Re: Birchtree's account talk

Looking for perhaps an intermediate top in March'07 - not necessarily related to the 4 year cycle though we may be in the first quadrant to the upside.

 

[mayday]

Re: Birchtree's account talk

I was reading today about the 4 year cycles going way back in history seems like Oct. is first, famous for a big sell off NOV TIED WITH A FEW OTHER MONTHS CAME IN SECOND. Opps must have hit that cap key. I know your long but this short side is getting me a wee bit nervous. I said we would have Christmas in October. Can we expect the same kind of momentum on through December? I have my doubts.

 

[Birchtree]

Re: Birchtree's account talk

The next thousand points may come rapidly - look at the first 3000 point run in 2003. This smells like 1995. I'm staying in for the ride just in case it turns out to be a rocket - in to win.

 

[mayday]

Re: Birchtree's account talk

The next thousand points may come rapidly - look at the first 3000 point run in 2003. This smells like 1995. I'm staying in for the ride just in case it turns out to be a rocket - in to win.

I hope that rocket is pointed up.

 

[Birchtree]

Re: Birchtree's account talk

If I dared tell anybody how much green I made in pin action today I'd surely be ostracized. But I have been waiting a very long time - and therefore deserving. Prudence is often the better part of valor. Snort with vigor.

 

[Birchtree]

Re: Birchtree's account talk

The Donkey wins but conservatism rules. In Michigan, opponents of racial preferences in public hiring, education and contracting easily passed their referendum, 58-42, in spite of being outspent more than three to one.

 

[Tri-ing]

Re: Birchtree's account talk

Birchtree,

I joined this week and I'm trying to figure this all out. The first thing I've figured out: I don't know much about watching the market. Time to learn. I've looked at the Learning Center on the Decision Point website, there is a lengthy list of items there. Can you suggest any of those charts or indicators that would be of primary interest for the TSP? Thanks.

 

[Birchtree]

Re: Birchtree's account talk

In the late 1990s the market was wildly overvalued. The forces driving it were based mostly on grand hopes for the future. Today the forces are easier to grasp: low long-term interest rates and earnings growth that has stayed strong far longer than most investors thought possible. For the third quarter, analyst estimated earnings for companies in the S&P 500 index at 14% above a year ago on average, according to Reuters Estimates. The actual number came in at 18% for the third quarter. They have been rising at an unbroken double-digit pace for more than three years. The question is will profits be at risk in the quarter to come, and that could weigh on share price gains and possibly push the major stock indexes lower. Ah, the risk. Profits have been soaring because corporate sales have grown faster than expenses. That has pushed profit margins - the proportion of revenue that falls to the bottom line - to their highest levels ever across the broader economy.

Stock skeptics have argued for well over a year that the profit boom couldn't last, and they've been wrong. The Technician has also been wrong. Falling energy prices and low long-term interest rates could help to boost profit margins in the months ahead. Moreover, many companies are benefiting from strong growth overseas, even as the U.S. economy apparently slows. Pick your own poison - mine is the C fund over the rest. Snort.

 

[Birchtree]

Re: Birchtree's account talk

From Henry To of Marketthoughts: "Coupled with the fact that many global macro hedge funds are still underinvested in U.S. domestic equities, and cuopled with the fact that many quantitative hedge funds have continued to short the stock market as a hedge to their short volatility position in recent years - there is now a good chance for another significant rally in the stock market going into the end of this year and possibly going into spring 2007. Continue to hold and watch your stocks on a selective basis. We are nowhere close to the top yet. After all, the secrets to making outsized gains in the stock market or anything else is to be just one step ahead of the next guy." Kinda like staying in front of the train. Snort.

 

[Birchtree]

Re: Birchtree's account talk

Tri-ing,

Charts will give you a visual look at the past but will not tell you what the future may bring. It's all in the individual interpretation. May I suggest a subscription to Barons - you will not be overloaded and will get good information. Investing is an art based on information and odds of risk. I actually leave my DCA buys up to fate. Be right on the larger trend and you will do fine. Good to have you join us. And don't be afraid when the pain doctor makes a visit - enjoy it.

 

[Birchtree]

Re: Birchtree's account talk

Looking back it is now more evident that we put in a 2 year base over base, and the longer the base the longer and higher the move once this base is broken or completed. Bases are very powerful patterns and provide stability for the price pattern to launch off of and remain in place for long periods of time. That keeps me bullish until October 2010. Whew, price wise, we're knocking on the door for a possible wild rush, all we need is more demand than supply. When and not if the ratio adjusted NYAD line goes to new all time highs - this wave 3 would then be of "Primary" degree instead of intermediate degree. Primary would give us upside price objectives that would make some shake their heads in amazement. I will have to be prepared for the arrival of wave four and exit smartly waiting for the bottom prepared to catch wave five. So much to do. But there is plenty of time on the way to Dow 17,000 and SPX of 1,700.

 

[FUTURESTRADER]

Re: Birchtree's account talk

[exit smartly

do my eyes deceive me???!!...birch selling??

 

[Birchtree]

Re: Birchtree's account talk

In the year 2010. Hopefully not before if I can help it. That coming wave 4 will be too brutal even for me. But I want every day and point of wave 3 all the way to however high it goes. Then wave 5 will top off the portfolio with $$$$ - that's hundreds of thousands of dollars. I take this game very seriously.

 

[ATCJeff]

Re: Birchtree's account talk

In the year 2010. Hopefully not before if I can help it. That coming wave 4 will be too brutal even for me. But I want every day and point of wave 3 all the way to however high it goes. Then wave 5 will top off the portfolio with $$$$ - that's hundreds of thousands of dollars. I take this game very seriously.

Just throw me a rope so I can ride along. There's room for two right?

 

[350zCommTech]

Re: Birchtree's account talk

Just throw me a rope so I can ride along. There's room for two right?

ATCJeff, you might what to think twice about staying put till March.

Birchtree,

Are you familiar with Prof. Nouriel Roubini's blog? He's forcasting a recession in late 1Q or early 2Q of 07. If he's right, there will be death and destruction.

 

[Birchtree]

Re: Birchtree's account talk

I believe I've seen the professor on Larry Kudlow. He is of course wrong in his assumptions. That's what makes a market - no one holds your hand when money is involved, place your bets.

 

[350zCommTech]

Re: Birchtree's account talk

I don't consider myself a bull or a bear. I've only been heavily envolved with my TSP for about a year, so I'm still trying to learn. What's really bothering me right now are those job numbers that came out on the 11/3. What are you opinions on the massive revisions?

There was a knee jerk reaction by the bond/forex traders that day, but since then, the dollar has dropped back to were it was before the report and yields have also dropped significantly. Why didn't bond yeilds continue to climb this week?

thanks.

 

[Birchtree]

Re: Birchtree's account talk

350zman,

The job numbers reaffirm the Goldilocks economy - that's positive. The bond market continues to believe there is only minor inflation to worry about which means the Fed will eventually lower interest rates and the yield curve inversion will right itself. All these markets are swayed by emotion and you have to ignore the speed bumps. You do know that everyone and his sister are involved in the internationals - and that's fine to a certain extent but it does send up a red flag. You can easily get trapped in a 1000 point cascade - and if you survive without panic you actually win. It's all in the sacrifice you are willing to make to be invested with the funds of your choice.

 

[350zCommTech]

Re: Birchtree's account talk

350zman,

You can easily get trapped in a 1000 point cascade - and if you survive without panic you actually win. I

That's what happened to me in 2001-2. I didn't know it at the time because I wasn't paying attention to market. I had it all in the C fund. Looking back, I guess I rode it all the way down and all the way back up. But I'm trying to avoid making that mistake again.

Thanks for you input.