Just a simple observation here - the SMH closed below its 200 day sma this past week - went thru it like a knife goes thru soft butter. The 200 day sma is 36.53 and Friday's close was 35.93, a difference of -1.6 percent. The last time the SMH was under the 200 day sma was on 11/1/05.
The SOX on the other hand closed at 502.34 on Friday, 5.4 percent above its 200 day sma. The last time the SOX was under the 200 day sma was on 11/1/05, the same day as the SMH.
The difference in performance can be largely attributed to AMAT, INTC, and TXN which have a much greater influence on SMH than they do the SOX. INTC, of course, has had a very tough time lately, but both AMAT and TXN have peaked in the interim and are now down substantially from their recent highs. A quick look at AMAT, INTC, TXN, SMH, and SOX from last 1 Nov shows,
- PCT
- 11/1/05 3/10/06 CHG
AMAT 16.03 17.79 11.0
INTC 22.65 19.85 -12.4
TXN 28.55 30.77 7.8
SMH 33.31 35.93 7.9
SOX 428.54 502.34 17.2
So, from Nov 05 until now, the SMH is up 7.9 percent compared to 17.2 percent for the SOX. INTC stands out as the biggest drag for SMH.
Now you might ask - what does all the above have to do with anything - and the answer probably is - nothing!:)
Don |
