HB, I fear that tomorrow, the semi cycle is going to be beaten down sharply. The reason is the Bu$$, because of its huge advance in the last year, the bu$$ has an undue influence on the SOX index, and MU has filed a suit against the bu$$, this suit is going to create some uncertainty, possibly enough to breach through $77 on the bu$$ tomorrow. From there it depends on the action taken by the Bu$$. Longer term, I think that will create another buying opportunity, maybe in the mid $60' as I have been saying for few days.
Short term, however, a big decline in the sox could ignite a selloff in the techs in general. That is actually strange coming the day after INTC hit a new 52 weeks high, but other semis like LSI and NSM are perched to break down. AMAT and the rest of the semi equip may also get hit hard.
I will not be in my office tomorrow morning, but I'll be calling my broker around 9:45 and probably liquidate a number of my semis (yes, including SNDK and SSTI) until the storm passes. As I said late last week, we are probably ready for a 200 points or decline in the Naz (to about that critical support level of 3850), and then we will see if that stops there, or do we again, go into a decline lasting about 2 weeks or so. I'll have better visibility tomorrow afternoon and then I will try and "refine" the model.
I thought you guys should know that this "fundies" (no place for such on this thread I take it) may have an impact on the TA which was already becoming a little wobbly.
Luckily, I am less exposed than I wanted to (at 45% cash), so for me the damage might not be too big, but Bosco, if you are on margin as usual, beware. Of course, this may pass in less than an hour post opening, and I will miss a good reentry on the Bu$$ .
Good night everyone and good luck.
By the way, some people must have known about this pending suit, that is probably the fundamental reason behind the technical weakness in the bu$$ since the IDF.
Zeev |
