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Technology Stocks : Semi Equipment Analysis

SOXX 306.14

+0.4%

4:00 PM EST

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To: Return to Sender who wrote (17778)	8/8/2004 9:32:47 AM
From: robert b furman	Read Replies (1) of 95632

Hi RtS, Agreed on your October bottom observation. My long term favorite is Cohu - Its long term bottom are as follows: 07/24/96 10/16/98 10/12/00 10/08/02 and it is darn sure past July now.GG Wonder why October is so prominent? I'm off to study the meat of your post. Thanks for the usual great study material. Bob I guess it comes down to the expectation of profitability. What a mouth full. I can make a case that volatility has not has not spiked as high as when the market multiples and corporate profits were so extended. Nazdaq bullish percents seem to reverse at higher levels when the underlying companies are returning to profitability vs disappearing into the abyss of either no forward vision or the 9/11 attacks. That's not so hard to envision/believe. From October 03 there is a nice higher high on the Naz vs $BPNDX reversing at higher lows. Note I do concede that friday's spike dipped below the Octobe 03 low of 30.00. I'm a believer that the market must make marginal violations of past support levels - to accomplish the change of ownership it wants to accomplish.This is possibly such a shake. I'm giving it this week to make or break the case. I guess I'm still in the camp that this recovery has legs,strength and will persevere through the long run. If the market falls through this level - then it is telling us the corporate profits aren't there in the long run. Then its hunkerdown time. I will be bracing for new lows rekative to the July and October 03 lows then. But right now we are where the reversal should come in. If corporate profits are destinned to continue - this will be a great area where new buying will come in and give us support. I thought I saw that last week with the nice run up on big volume on Cohu.It swam upstream for about 8-9 days on double to triple daily volume. That kind of volume isn't my "Add to" kind of buying.GG I think it is institutional support rolling into the much pooed pooed SCE sector - STEALTH STYLE. It goes to those who are making the best equipment for tomorrow.It is the product of successful R&D that takes away market share from competitors in the future fabs of tomorrow. I've seen sadly little of that kind of action ,but it is worth looking for as that is where tomorrows winners will be.Also look at Intest (Intt) same price action. Interesting that they both are dominant in small niches of the backend sector - a sector destinned to benefit in the tremendous multipier of chip yields that are a powerful byproduct of 300mm yields i.e. Intels overproduction of chips this quarter. As always thanks for your excellent contribution with charts and a long held solid market game plan. I'm being hard headed here - but not for long.The price action I'm seeing ,I've expected - but we have to hold here this week. I like marginal violation - they are great "ADD TO"spots - but if you have the cahones to try them - you have to have the smarts to cut their losses off quickly. The 5000 mistake can't be allowed to grow into a 20,000 loser. Thanks again. Bob

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