John, I completely agree with you, the cycle in shipments of equipment has not peaked. I also agree with you that five or so data points do not make for a good statistical model (namely using the peaking and bottoming of the BTB as "close to coincidence indicator" for peaking prices and bottoming prices), however there is not much more we have right here.
By the way, the BTB in equip will by definition peak long before shipments peak, and the market has in the past peaked the stock prices long before their shipments peak has occurred. In the chip sector, many companies never have a peak, they just have peaks in growth rate of shipment.
One suggestions I made was that "the market" knows best, and just observe the technical action of the leaders in the sector for technical bottoming. One such indicator I use, is four months without making a new low, unfortunately, that one is a little late as an indicator, and I use it as a confirmation of the trend (the same with th peak, four months without a new high is a warning signal for me).
I also suggest that a divergence between the sox and its leaders (AMAT and INTC) would be an early warning sign. What is, important however, is that one captures the majority of the upleg without being exposed to an unending downtrend. Since INTC and AMAT have made a new low today, I would say that it is not yet time to jump back in.
Zeev |
