MARKET INDEX TECHNICAL ANALYSIS - MITA Message Board

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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA

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To: pater tenebrarum who wrote (434)	8/7/1999 2:40:00 AM
From: J.T.	Read Replies (1) of 19219

heinz, RE the SEMI'S (SOX INDEX) today in '99 vs the semi's in '87: a little sleuthing reveals that the market gurus in first part of Aug '87 had called an end to a supposed 2 year chip slump in the semiconductor industry. The Semis were really picking up a head of steam and growth was accelerating. The big chipmakers were Intel, Motorola and Teradyne. They did not have a SOX Index in '87. Here are the 87 facts: INTC had based in the low 40's in June '87; it continued to move higher during the summer rally and closed at $53 1/2 on Aug 25, 1987, the day of the DJIA high close before the crash less than two months later. Most important is this of 87: while the DOW hit its high on AUG 25, the TRAN had already peaked two weeks earlier while the UTIL peaked much sooner in Jan of '87. The Semiconductor stocks did not peak until early OCT just two weeks before the crash on Oct 19. INTC hit a high of $62.75 on OCT 5, '87-- on OCT 19 it closed at $42. On Nov 30 it closed at $21.50 before rebasing. MOT hit its high Oct 1 at $73.25. On Oct 19 it closed at $52 5/8 and Nov 30 $40.50. TER hit its high Oct 2 at $34 5/8. On Oct 19 it closed at $21 7/8 and Nov 30 $14 7/8. My point is this: SEMICONDUCTOR STOCKS WERE THE LAST "SECTOR" TO PEAK IN '87 PRIOR TO THE CRASH. AND IF ANYBODY DOESN'T THINK IT CAN GET WORSE FOR THE MARKET RIGHT NOW, WE OFTEN NEED A LITTLE REMINDER TO PUT THINGS IN PERSPECTIVE. BULL MARKETS END AT TOPS WHEN THINGS LOOK GOOD, not at bottoms when things look bad. Bull markets end WHEN 55% OF THE AMERICAN PUBLIC IS INVESTED, ENAMORED, AND IN LOVE TWITH STOCKS. Bull markets end when people quit their jobs and think the game is easy and they can become resident trader and market guru overnight. I have been wrong many times before, but the evidence is more overwhelming to me now than ever. Just thought I would cheer you up with your put positions.<ggg> Best, J.T.

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