What farmers have known for ages, most brokers do not know. Just as there is a time to sow, and a time to reap, there is a time to buy and there is a time to sell. Stockbrokers have this notion that every second your money is not invested you miss out on this lucrative journey guided by his or her investment acumen, so the right time to buy is when you have the money. Conversely there really is never a good time to sell as stocks are assumed to be on this constant upward trajectory. Only when the crop is rotting in the field and the embarrassment  becomes too great will the broker sell (and , of course at the end of the month when there is a need for food on the table). We believe that the best way to make money, presumable that is the purpose of the exercise, is to be rather circumspect about both the buy and the sell. There are 560 different entries on this website, some individual stocks have as many as 40 entries (RY) so it is near impossible to keep track all the time. That is why I like to work with a “first”, if it reaches that you either sell or are on your own (if not stopped out).

Dell is a good example where both sides worked. For whatever reason (see previous blogs) we recommended buying Dell at about $12. A week too late we noticed the triangle and immediately suggested a sell. So far you are up $5 (or $10 if you also short)on a base of $12. If your broker is like the one described above, you have made absolutely nothing.

Back in August of 2009 (see previous blog) we recommended the purchase of Dell with a target well into the twenties. Today we would suggest selling the stock now and taking a 40%+ gain over roughly 18 months. The reason, in simple terms, is that the stock had a “thrust” up from a pattern that looks suspiciously like a triangle, moreover the thrust is pretty well equal to the mouth of the triangle and the top is reached perpendicularly above the apex. What more can you ask for. Thrusts, which are 5th or c waves are, almost without exception retraced right down to the lowest point of the triangle, about $13.50, so why stick around?

Interestingly, DELL has followed much the same path as SLE; in fact it is running ahead a little. Here are both long and short term charts.

Note that Dell lost 86% of it’s value in about 9/11 years, depending where one puts the top. This is , of course, a tech company that cannot in anyway shape or form be compared to Sara Lee (why not?), and as tech stocks are prone to drop to zero one must be very careful drawing too many conclusions. Nevertheless, when you think about it Dell is as much a marketing as a manufacturing company and this at least it has in common with SLE.

Assuming the $8 low was the low and here too we are in the next bull phase, we have completed wave 1 up AND probable wave 2 down. Wave 3 up lies ahead. Again use a stop-loss at $11 or so!