Gottfried: Appreciate your great charts and studied semi
analysis, but can I get further input for your view of the SOX bottom? You base a bottom call at least in part on the index having given up three years of profits. I see this:
bigcharts.marketwatch.com
over 5 years, which says we have to go to around 200 just to get to Oct '98 levels. [Edit: BigCharts default there; my example was 5 yrs, monthly] Your posted chart shows that at current levels the SOX has given up ~15 months of profits--just those from January 99 to March 2000.
Not to quibble about math, what I wonder is why you think the SOX wouldn't go back to somewhere around Oct. 98 levels--a long way down from here. I suppose that depends upon whether you share the view that we've had a major bubble deflation that has worked its way through many other parts of the tech sector, and at this point the chip sector is closer than most to being a sort of last man standing (leaning pretty hard). I'd like to buy ALTR, XLNX, AMCC, BRCM, TQNT, RFMD, more PMCS, even AMAT, but I can't shake the feeling that the sector will be last in the ongoing repricing. AMAT is looking like a put candidate again to me. I fear the E is coming down for chips, then the P.
Are you making a macro call on the economy, or is it that you rely upon your book to bill ratios and other technical indicators as pointing to a semi rebound despite the economy? Or (more likely, I guess) a mix of both disciplines? TIA for any insight you can offer. |
