Birchtree's Account Talk

[Birchtree]

Re: Birchtree's account talk

I'm not a multi-millionaire yet, but I plan to be prior to 2010. I just can't give up those wonderful DCAs just yet - but I'm thinking about taking a different turn perhaps later this year. Now if one includes the earnings of the Mrs and her defined contribution plan then you could say multi but it's not really that much money. Can you feel the ground shaking from all the hoofs heading toward the market - there's a good move building and it won't be a blow off top. We are going much higher on all indexes. The Goldilocks economy will leave far fewer companies vulnerable to an unexpected setback and many new investors might decide that stocks could trade at much richer valuations than they do now. 2007 will be the year of multiple expansions of P/Es.

 

[fedgolfer]

Re: Birchtree's account talk

... yup, measured bull moves and upward price channels. Much smaller chance for a correction like last May after the Fed's re-tweaking of their language.

 

[fabijo]

Re: Birchtree's account talk

Can you feel the ground shaking from all the hoofs heading toward the market - there's a good move building and it won't be a blow off top. We are going much higher on all indexes. The Goldilocks economy will leave far fewer companies vulnerable to an unexpected setback and many new investors might decide that stocks could trade at much richer valuations than they do now. 2007 will be the year of multiple expansions of P/Es.

I hear the hooves, but I think there will be a scary shakeoff first.

 

[Birchtree]

Re: Birchtree's account talk

Maybe during the 9 month nesting. I continue to think it will be a light bottom. 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. Remember, I'm still of the opinion that we are in a mega trend secular bull market with currently high NYSE breadth MCSUM readings. Bull markets are born on pessimism, grow on skepticism, mature on optimisim and die on euphoria. Look how crowded that lilly pad has become. The June/July 2006 bottom had the worst total put/call ratio in the last 12 years - it was a perfect set up that is still in force. Buy and hold works if stocks are going to rise steadily for several years.

 

[Birchtree]

Re: Birchtree's account talk

The pin action yesterday was in good form, I made $17K on a 51 point gain. That now leaves me with a pull down of $84K - $16K more to go to hit the goal. May or may not do it today. All will depend on the transports. As we move closer to the 3 of 3 epicenter the bigger the point moves you will see in the Dow. With each positive breadth plurality day we have on the NYSE from this juncture, this would mean new all-time highs on the ratio adjusted (RA) NYAD line as well. The name of the game is liquidity and capital appreciation - no CP for me.

 

[Birchtree]

Re: Birchtree's account talk

With a 20 point drop yesterday I managed to gain $2K on the day. That puts me at $86K for the month. Not quite what I wanted but now is not the time to be proud. February is here and I'll take anything I can get - talk about not being proud. A gain of $60K in 18 trading days would be magnifico - but I'll probably gives some back on the month. I do plan to do some more buying if we have softness and will buy on any continued strength - I got some sweet profits that are burning a hole in my pockets. Looking for that epicenter. Can anyone besides me believe that 3 of 3 may not end until Dow 20,000? Get ready for some strong potential melt ups - look what happened in the real estate asset class - with all the inherent speculation.

 

[Birchtree]

Re: Birchtree's account talk

"....and it's arguably the simplest definition of whether stocks are in a bull market or a bear market". "Total assets in Rydex funds is amazingly at a 3-year low despite the fact that the S&P 500 index is at a multi-year high, if you can believe that".

http://www.safehaven.com/article-6836.htm

 

[Birchtree]

Re: Birchtree's account talk

At the current time, market liquidity, as measured by the NYSE advance/decline data, continues to streak higher against the divergent structures of RSI and MACD. The trend has been undeniable - a great lesson in what a third wave looks and feels like....learn from it. If we do make new highs on the MCSUM and start seeing renewed gap expansion to the upside March or April will then come into play as the time duration for this current advance. The weekly RA-AD line diverges with price long before a serious price correction unfolds. Due to that characteristic, the probability is very low any major price decline is in the cards over the coming months. The next hurdle for the NY Composit weekly AD MCSUM will be the +1487 level high posted February, 2005. We could now be back to both the 9 month and 4 year cycles moving concurrently in the same direction and this should provide enough staying power to continue for several months. The DJUA often hits its high well before the final high of the market as a whole by about 3 months. A Dow Theory Primary trend buy confirmation will be the sentry moment for the bull to stampede. As long as the NYAD continues to move higher and higher so will price and the longer it does the longer the advance will run. Looking at the angle of ascent longer term of the NYAD - the more the acute the angle, the more powerful the trend of money flow is. We are at the most acute angle right now where the only real comparison was in the 2003 period wfen, again, both the 9 month and 4 year cycle were moving up concurrently in tandem.

 

[wv-girl]

Re: Birchtree's account talk

Birch,
In reference to the I fund and the currency factor, I heard on CNBC something about linking the Chinese currency with Japans currency since they were now even? I'm sorry I can't quote who it was. Have you heard this and if that ever were to happen, what kind of chaois would that cause?
Thanks

Found some more literature from MarketWatch (if you are interested)

"Challenging the dollar's dominance
Currency diversification may not be as scary as the market thinks"

http://www.marketwatch.com/news/sto...x?guid={B99AD4C5-178D-4288-88C5-CB16A4C322CC}

Hope the link works(1st try)

 

[Birchtree]

Re: Birchtree's account talk

wv-girl,

Thanks for that informative read - I'm only sorry that ayla will miss it.

 

[SkiUtah]

Re: Birchtree's account talk

No fear, she's lurking...

 

[Birchtree]

Re: Birchtree's account talk

I searched high and low for an old time buy signal in the years of 2004, 2005, and 2006. This signal used to be a standard sign - but have no fear because it has finally surfaced. Beginning Tuesday, 1/30/07, the NYSE posted three consecutive days of advance-decline breadth ratios greater than 2 to 1. The consecutive days of 2 to 1 A/D plurality coincided with new 52-week highs in both price, as measured by SPX, and the cumulative NY A/D line itself. Does it mean anything - probably not. Cumulative breadth always diverges with price prior to price declines greater than 10%. Be right and sit tight. Most of the good economic news arrives tomorrow.

 

[Remo]

Re: Birchtree's account talk

Hey Birch,
I'm feeling good about the economy and everywhere I turn there seems to be good economic news. What do you think about this read?
http://gbr.pepperdine.edu/043/stocks.html

I wouldn't bet my savings on it but it helps give me that warm fuzzy bunny feeling that seems to be permeating the market since the middle of last year.

 

[Remo]

Re: Birchtree's account talk

Never mind.... I just googled "Presidential cycle" and found just as many articles debunking the theory. I'm still wearing rose colored glasses though!

 

[Birchtree]

Re: Birchtree's account talk

Check this one for a good read.

http://www.financialsence.com/editorials/au/2007/0112.html

 

[Birchtree]

Re: Birchtree's account talk

Looks like that was the wrong web site.

http://www.financialsense.com/editorials/au/2007/0112.html

 

[Remo]

Re: Birchtree's account talk

Good read. Looks like even the bears are bullish!

 

[Birchtree]

Re: Birchtree's account talk

Time has come today, as the song goes. Any continued pull back in price should be used as continued buying opportunities. Even if we fail here, the price action is not going to fall apart. So I'm prepared to do some DCA work on my large portfolio. Just sold my position in LFB and used the loose change to buy: AKS, GDI, AG, THE, GB, GBX, ABB, RYI. Everything I buy now will only be more expensive in 30 days, I think.
All the MCSUMs look great. They continue to suggest a big move coming with the large separation of postings (gap expansions) - lots of money coming in.
The 10 day OEX P/C ratio is at 1.92 which is the highest level in 3 years. The highest reading since Y2K and the second highest reading since 1990 and each one was a price bottom of some kind. As an extreme per Tom in smart money bearish sentiment, everytime this has happened we've rallied. If we do correct I'll use the rest of my loose change to continue to DCA.

 

[Birchtree]

Re: Birchtree's account talk

The SPX breadth MCO is still rising, the SPX breadth MCSUM has a reading of +650. The previous MCSUM double top highs are around +800 level, only 180 data points away. If we get another breadth thrust higher we could be challenging these same highs again next week. The NYSE breadth MCSUM is now at +876 and the NYSE volume MCSUM is at +709. These levels will help reduce down side price decay. Thius is the longest amount of time in which the NYAD line has remained in a bullish configuration since the 2003 lows.
The MID breadth MCSUM is +596.
The SML breadth MCSUM is +514.
The TM breadth MCSUM is +524.
We are definitely going much higher into April if not longer. We are still correcting on the intra day volatility.
A slight reminder for those playing the bunny hop game; there's nothing like getting whipsawed a few times to make you step back and look at the bigger picture. This current move is reminiscent of the structure of the markets in the 1950s. During that period that advance lasted for 10 years - that would certainly confirm the wave 3 of Primary wave 3 of Cycle wave 3. Snort.

 

[Birchtree]

Re: Birchtree's account talk

Going in before 1200 hrs to spend some more loose change, buying: HVT, HXL, KOP, LZB, LMS, LPX, MRD, PCR, SXC. Gotta do more next week. None of these are new positions - I'm doing a little DCA.