Continuing on with the SOX by looking at the long term chart going back to 1995, and comparing the price action with the yearly bookings numbers the following chart is shown.
The Bookings, Billings, Difference in the 2 numbers, and the Percent Change are shown in the table. The Bookings number for each year has been repeated along the horizontal axis at the bottom of the chart.
1. Starting in 95, the SOX began an upward movement from the 150 area to nearly the 300 area(6 mos), and then started downward. Bookings were 13.9B in 95.
2. The SOX continued downward to the middle of 96 to about the 175 area when it turned around and started upward. Bookings were 14.0B in 96.
3. In 97 the SOX continued upward to the 400 area(gain over 100 percent) when it started downward again. Bookings were up nicely to 16.4B, a 17 percent increase over the 14.0B in 96.
4. In 98 the SOX continued downward to the 200 area(loss of 50 percent) and then turned around at the last part of the year. In 4 months the SOX was up about 100 percent. Bookings were down to 10.9B from the previous year's 16.4B, but the "market" was already attuned to better things to come.
5. With a slight pause at the beginning of 99, the upward climb turned into a frenzy. Bookings for 99 were 17.6B, only 1.2B more than 97, but by the end of the year the SOX had hit 700, a gain of about 75 percent over the year.
6.In early 2000, the SOX went from about 700 to an intraday peak of 1362(almost another 100 percent gain in a little over 2 months), and then with some wild swings between 800 and 1200 for several months, the party was over. The downward charge started in Aug at about 1150 and by the end of the year was in the 550 area, about a 50 percent drop. Bookings were 32.3B in 00, but the market knew the party was over by the middle of 00.
7. 2001 and 2002 saw a further price pullback to the 300 area, another 40 to 50 percent drop. Bookings were somewhat low at close to 11B, but "on the order of" the late 90's.
8. 2003 was the year of the "oversold bounce". The SOX went from about 275 to about 550. A good year to be long in the semi area. Bookings were the lowest ever during the period reviewed at 9.7B. Talk about your "divergences".
9. For 2004, 2005, 2006, and 2007 the SOX has bounced around between about 400 and 550. As late as June of 2008, the SOX was above 400, but since then has fallen "off the cliff". It went as low as 167 in November. That is well over a 50 percent downside swing, now there has been a slight recovery of about 20 percent as of year end. Bookings were quite good in 06 and 07, but it did little to no good in raising the SOX index. Bookings thru the 1st 11 months of this year are 10.6B. On average this is about 1B per month, but with Dec expected to be another "poor" month, Bookings will probably wind up between 11 and 11.5 Billion for the year.
10. Coming tomorrow we are launching into the new year called 2009. Where do we go from here in terms of the SOX and the total semi area? At the moment, estimates are that "orders" will be in the area of 30 percent less than last year. That would put Bookings in the 7 to 8 Billion range, considerably the lowest ever over the period just reviewed. However, that estimate can change as the year goes on. And also, of course, the "market" sees into the future before the actual numbers come out. Just look at the 98/99, and 03 time frames as an example of this capability. |
