The last 2 days of this past week have shown some life in the SOX and the broad market(SPX), albeit the SOX(and SMH) much more so than the SPX. The question is - where do we go from here? The following is a 10 year chart of the SPX and SOX along with some Bookings, Billings, and closing year end SOX prices to see if there are some correlations that may help us all in making some decisions about the future.
Over the 10 year period, there are some large swings in the SOX, both positive and negative with respect to the SPX, but at the moment, the SOX is quite a bit lower than the SPX. This could be a good sign because the SOX has some "catching up" to do.
The small table was superimposed on the chart to see if there was some correlation between Bookings, Billings and the close of year SOX price. Keep in mind, Bookings and Billings are for North American semi-equip companies only, while the SOX covers a much wider collection of companies.
1. In the year 2000, Bookings and Billings were extremely high and the SOX was trading in the 1200 area in the early part of the the year, but the "good times" were not to last and by the end of the year the SOX closed at about 670.
2. While Billings were almost 17B in 01, the SOX closed down at about 530, and 02 was more of the same with the SOX closing down at about 308.
3. Then a rather peculiar thing happened, the Bookings and Billings decreased even further in 03 to under 10B, while the SOX went up all year and closed at about 505.
4. From 03 on, the SOX bounced around in the 400 to 600 area, closing at the 400+ level for 04, 05, and 06. Bookings and Billings in those years were pretty much the same with 05 being the weakest year.
5. As has been noted many times on this thread, the SOX "peaked" in July 07 at 537, and since then it has trended downward until it bottomed this past 11/21 when it closed at 180. Since then it has recovered to 214 as of this past Friday.
6. The Bookings and Billings numbers for 08 are estimates since the official numbers for Dec 08 are not available yet. I just added in nominal numbers for Dec 08. If the analysts such as Gartner are right, Bookings and Billings for 09 will be under 10B, much like the numbers seen in 03. Will we have a year in 09, like 03, where even though Bookings and Billings were under 10B, the SOX performs in grand manner like 03? |
