RtS,
As usual, you have put together some great charts to "paint" a picture of what you see, and certainly these charts tell us where we have been in the past. I don't necessarily agree that they "paint" a clear picture of the future.
"Mr Market" has made mistakes in the past about the future, and I have no doubt that "Mr Market" will continue to make mistakes in the future about the future. Gottfried just recently pointed out that in the beginning of 2002, "semis" thought the recovery was at hand, but it turned out not to be. From about May to the first of October, the SOX went from roughly 600 down to 200 - a "body blow" if there ever was one.
Incidently, the SOX hasn't even made it back to 600 yet since the rise from 200+ in October 2002, a period of 18 months. The SOX has "stalled" in the 520/560 area since last November, and as of today, the SOX is trading around 498 as this post is written.
For whatever reason, presently there is a lot of weakness in the "semi" area while earnings estimates, target prices, etc are still increasing, and PEG valuations are the best they have been in a long, long time. When does the "rubber meet the road" and the situation moves to a more "normal" one?
Don |
