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Technology Stocks : Semi Equipment Analysis

SOXX 298.01

-0.5%

Dec 15 4:00 PM EST

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To: robert b furman who wrote (11697)	9/21/2003 12:41:53 AM
From: Return to Sender	Read Replies (1) of 95580

SNIP: Bullish investor sentiment at 56% (bearish) Bearish investor sentiment at 17% (bearish) Bullish percent on the OEX at 87.0 (very bearish) VIX at 19 for the 4th time in 5 yrs. (bearish) Bearish divergence on indicators on the OEX bullish percent chart (bearish) Monday begins the worst four weeks (bearish) Markets at new highs after 7 mo run (bearish) It is statistics like those that are driving the bears crazy. The market refuses to go down and extreme bullish indicators are growing even more bullish on a daily basis. The off the scale bullishness is feeding on itself and providing the urge for investors to chase stocks even higher. Next week is going to be a major test for the indexes. I have been reporting for weeks that we were about to enter the worst six weeks of the year from mid September to the end of October. Well boys and girls we are now moving into the worst four weeks of the year. This is the period after September options expiration and before the October expiration. Why? Mutual funds have an October 31st fiscal year-end. This means funds wanting to lock in profits and/or off set losses have to sell over the next four weeks. They could wait longer but the normal plan is to wait for the Sept option expiration period to pass before dumping stocks. They try to get all the portfolio rebalancing, including buying new stocks, done before the October option expiration. This compresses the time frame for all these events to occur into the next 3-4 weeks. In a year where many stocks have more than doubled in value since March the odds are good that many funds are going to lock in profits to dress up statements. After three years of a bear market the urge to show a nice profit is going to be strong. Don't get me wrong. The funds are not stupid. If the market opens up on Monday and they feel the momentum is still there they will try to stretch their gains just like everyone else. Once the momentum appears to fade it may trigger the end of that stretch attempt. The next three weeks are the three most important weeks of the year for funds. This is where all the planning and pain pays off and bonuses are earned. Until those profits are translated into cash they can disappear in an instant with any negative event. However, not all funds sell and they do not sell all stocks. If they think there is more upside in a stock and they do not have anything better to replace it with then just taking profits to take profits is a self defeating process. Confused? The bottom line is that some will and some won't and until it happens nobody has a clue. asianinvestoronline.com

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