Hi Don,
October 98 is the most vicious example of a double bottom in price:
Re: Cohu
October 8:
14.14,14.64,12.76,13.50,vol = 139,300
October 16:
12.64,14.00,12.00,13.50,vol = 112100
Note the huge intraday price swings correlates well with the vix spike.
Many of the stocks in this sector are dropping down to a long term trend line that connects Oct 8,1998 with Sept 21,00 and now.
It seems that the sector is still on an uptrend - when taking the very long term view.
These stocks individually bottom out as the last substantial holder either panics or get forced out - so Cohu being a low on the 16 was a week later than Nvls.
Nvls :10/08/98
21.50,22.37,20,87,21.95 volume = 1,223,600
10/16/98:
33.45,33.75,31.62,32.07 volume = 1,058,800
So by the time Cohu bottomed Nvls was showing great leadership.
As I recall big caps were king.Intel actually bottomed the June before.
So far in this market small to Mid caps are showing strength:
siliconinvestor.com
But in the semi equip stocks big is still better on a percentage basis:
siliconinvestor.com
This market also reminds me of October1998.
October 1998 was the result of a failed market rally that ran from January 98 thru Feb 98.This failed Rally occurred after a pretty good run up from April 97 thru Oct 97 nice bull move.
The current market is a bear market after two failed Rallies Post the huge run up in Feb Mar 2000.It is a major market bottom after having sector bounces in October of 2000 April 2001 and Sept 2001.
The time duration ( I think, may well be our saving grace).
We are at a long term uptrend confluence after having three major low points in price and 20 months have expired from the October 18 lows(Cohu @ 12.58ish).
As G has so well documented the equipment shipping cycle has rejuvenated itself,The world has once again found more new uses for an unsatiable appetitte for IC's see G's WW Semi shipments.
Once again the investment community questions wether this turn around is valid and stable- The real question is: Is our future continuing to embrace the use of more chips - the answer again is YES.
The time once again has come for us TO KNOW WHAT WE KNOW.
Global manufacturers MUST embrace technology to be efficient.Yesterday, lost in the clutter was 3M's excellent earnings.Thus company 2 years ago was pathetic.Since then an new CEO Mcinerny (from GE) took over, installed web-based internet applications - cut costs and has made a great turn around - very similar to GE and GM.Old tech embracing new tech and productivity gains abound.
This IS the story of our global leading recovery - just about to be announced in earnings announcements.Made in and started in USA. Also available for cash from the USA.The fact that our dollar being weak - makes it more affordable to those who really need it - a good thing - quite contrary to the markets News Noise.JMHO
The long trend line connecting major bottoms will be charted and confirmed.
We are not thru the woods yey but we are very close.
siliconinvestor.com.
Note:
1)ADX is higher than its been since the crash of 2000 and the bottom of 98- may have more to go +DI has not turned up yet - let alone crossed over -DI
2)Macd must start to get less negative and then go positive -like it did in 98 - but its dips are certainly less severe and shorter than latter 2000
3) Stochastics says we've got some sideways wallering to do- just like Oct of 98,October of 00 and Sept of 01
4)Momentum suggests we could actually have a bull market in the future rather than a Rally to neutral and a failure.
After the wonderful run up of 2000 - we need sideways consolidation and long term growth /base building.
Tito's stairstep construction ,with each step higher and taking longer to build.
But we also have the potential of a higher low holding and that is hugely better than lower lows.
Intel is going back to it June 98 low (16.00's)- it lead the whole way far in front of semi equip stocks in 98.It bottomed in June instead of October,1998.
I think we get a pop with earnings next week - but we must prove profitability and I expect that will occur with Q3's earnings in a more substantial way.The next 90 days will be the time needed for Macd to roll up and Stochastics to false start and give time for -DI to break down as +DI pops up.
I think the downtrend will go sideways very soon.Watching Intc as always - Then Amat,Klac,Nvls etc.
Sorry for the length - but you asked for it.gg
Bob |
