RtS, SMH had a nice run today. I think it has a good chance to go further. As you are aware, it has not kept up to the SOX over the last few weeks because of its high dependency on TXN, INTC, and AMAT. TXN was up over 3 percent today, while both AMAT, and INTC were up over 1 percent.
The whole "semi" sector has suffered the last few weeks since the great run the sector(s) had in the first part of January. I keep seeing articles, and even Briefing.com mentioned it today about the coming "slowdown" in 2H06. This of course makes the "market" nervous, particularly the semi sector that likes to react to coming events 6 to 9 months in the future.
We have a couple of more weeks to the start of earnings reporting for this calendar quarter. I think the reports will be very good again, but as usual, the most important point will be how the CEO's see the future, and there ability to impart some enthusiasm to the analysts. We have to get to the point where this 2H06 slowdown syndrome is either confirmed for sure, or it is proven to be a false assumption.
Actually, we are getting to a point in time where the anticipation of coming events in 2007 is going to make a difference. Many articles I have seen talk about the "weak" 2H06, but then 2007 is going to be much more robust. If that outlook is maintained over the next few weeks, we should start seeing some market action responding to that scenario.
For the next few days however, I think we have an upside run ahead of us.:)
Good luck to us all,
Don |
