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Technology Stocks : Semi Equipment Analysis

SOXX 303.84

+1.3%

Dec 22 4:00 PM EST

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To: Return to Sender who wrote (11728)	9/21/2003 3:17:27 PM
From: Donald Wennerstrom	Read Replies (2) of 95626

<I believe it will be a down week Don. We are very close to setting another new near term low on the VIX in conjunction with another spike upward in the Nasdaq New Highs. That means the VIX will be rising soon and the NASDAQ will be falling.> Well, maybe and maybe not. After reading your post, I went to IH and looked at your posts, specifically the one by Jim Brown. investorshub.com Here are some "snips" from his report. <The VIX close at 19.07 is at a level only seen four times since Jan-1999. This is very bearish but it is not a trigger indicator. That means it can stay there for some period of time before the reaction takes place.> <I feel like Chicken Little. I have been reporting on the "normal" market trends since late July and none of them have come to pass. The fix was in and the retail traders are convinced the worst is over and recovery is ahead.> This belief has produced a positive inflow of cash to funds for the last 17 weeks. The Fed is going out of its way to promise no rate hikes until well into the recovery cycle. We are poised for a huge explosion in earnings if the recovery comes to pass. At this point that is more of "when" instead of "if" but it has not happened yet. We are seeing a slow increase in the economy but maybe not enough to justify the strong rally from March.> <This brings us to next week. "Normally" this would be the beginning of the lock in profits volatility period.> However, with the funds still pouring in and the investing public counting dollars instead of sheep at night it remains to be seen what will happen. The Dow and Nasdaq are in nosebleed territory not seen in over a year and by many indicators very overbought. This could produce a spectacular dip back to the August lows or just another dip to be bought by the bulls. Until it happens it is just speculation and nobody has a clue. The market has embarrassed quite a few analysts over the last couple months and has proved one thing more often than not. The market will always do exactly the opposite of what analysts expect at critical points. Hopefully by doing my Chicken Little imitation again today if the sky does fall you will be ready for it. If it doesn't then no harm done. While Friday could have been the calm after the storm there is a much better chance it was the calm before the storm. Or should I say calm before the next buying opportunity?> Don

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