Don, the SOX stocks are the ultimate cyclicals, although most WS "analysts" would probably tell you they're now reclassified as growth stocks. nonsense, btw.
they follow roughly a two year cycle, with highs hit in odd years and lows in even years. the average gain from trough to top used to be slightly less than 200%. right now, the index has gained 254% from last Octobers lows, with a 25% or so move in the last ten trading days alone. interestingly, MER upgraded the whole sector for the umpteenth time today, and i think it has been a target of the 'buy at any price' trades that were reported today.
the sector's earnings, needless to say, are still way below the earnings peak of the up cycle before the current one.
i mention this as another sign of the degree of insanity that has entered into 'investing' at this stage. fundamentals are simply not what counts in the context of these moves anymore. it's once again all promise....
Benkea posted a chart that showed the possibility of a measured move in the SOX to the 674 area, which is 14 points away.
depending on how many people are aware of this, it may or may not get there...<ggg>
tomorrow the bond police are back in town, which may give the market five or ten minutes pause....
otoh, the BLS gets to lie to us tomorrow again, so who knows...<ggg>
regards,
hb |
