Still In

The market did well last week, and so did we, overall. Pfizer is recovering, Sun is percolating higher, the semiconductors are looking alive, Maxtor has thus far not raced back below $5, and the Dow portfolios are on their way to another nice year after a rough start in January.

I mentioned last week that I had placed a stop limit order to sell half of my remaining Maxtor position at $5.50 (that’s a quarter of my original position). A stop limit order has two components: the activation price and the limit price. My activation and limit prices were both $5.50, thus when the stock plunged through $5.50 without ever getting back up to that price again, my order never filled. That’s why I’m still in.

I have since cancelled that order and now have nothing outstanding. It looks to me that some positive momentum remains and that we may be able to pick up a few extra dimes per share before clearing out in hopes of buying again later at a lower price. Stay tuned, and get on the email list if you’re not already on it. Just type your name into the field at the top of this page.

The Fibonacci market prognosticators are back at it, clinging to their belief that the market moves in predictable series of waves, seemingly never bothered that none of them can agree on the size of the waves or the depth of the current set of waves, and so forth. Still, if you’re looking for reasons to be bullish other than the overwhelming factual record that the market rises about twice as often as it falls, then the Fib folks are currently on your side. From BusinessWeek:

The 20-week cycle just bottomed out in late January, so the next 20-week cycle low is not due until the middle of June. The more dominant 77-week cycle is due to bottom out in February, 2006, so we continue to see some type of major peak during the second or third quarter of this year.

All very well, especially when you consider that oil is now back above $50 for the first time since early November and that we’re still way in front of the expensive summer. Expect to see oil above $60 about mid-year. That, combined with summer’s usual malaise, should give us the annual bumper crop of cheap stock prices from which to build another profitable winter portfolio.

Oh, and now we have the added comfort of the “20-week cycle low” being scheduled for mid-June. Mark your calendar.

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