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Technology Stocks : Semi Equipment Analysis

SOXX 314.52

-0.6%

Dec 11 4:00 PM EST

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From: Return to Sender	11/1/2009 2:15:42 PM
	2 Recommendations Read Replies (2) of 95567

Amateur Investors Weekend Market Analysis (10/31/09) amateur-investor.net Based on this week's action it's possible an intermediate top has occurred. As you may remember there was a clear 5 Wave downward move from the October 2007 high to the March 2009 low. The question is at this point was the move from 667 to 1101 just Wave A of a larger ABC corrective rally or was it a completed ABC pattern? The bullish scenario is that the move from 667 to 1101 was just Wave A which would be followed by a Wave B pullback potentially back to the 38.2% Retrace at 935 or the 50% Retrace at 884. Once the Wave B pullback completes then this would be followed by another move higher as Wave C occurs. If this pattern is going to develop in the longer term the S&P 500 should hold support above the July low which was at 869. An example of this pattern occurred in the mid 1970's as the S&P 500 completed a 5 Wave pattern which was followed by an ABC corrective rally. Notice how the B Wave found support near the 38.2% Retracement Level before the C Wave occurred. Meanwhile the bearish scenario is that the entire move from 667 to 1101 is a completed ABC corrective rally as 1101 will end up being a significant top. This would then be followed by a gradual decline with the S&P 500 potentially retesting the March low at some point in the longer term. An example of this pattern occurred back in the late 1930's as the ABC corrective rally ended in late 1938 which was then followed by a gradual decline until a bottom occurred in early 1942 (point D). Meanwhile as we have seen the past few years the action in the US Dollar (USD) has had a substantial affect on the market. Generally when the USD has rallied (points E to F) the S&P 500 has fallen (points G to H) and when the USD has fallen (points F to E) the S&P 500 has rallied (points H to G). For the past several months the USD has been in a downtrend however this week it rose above its longer term downward trend line (yellow line). The key to future action in the market may depend on what the USD does over the next several months. If the USD begins to rally strongly and reverse its previous downward trend then this would likely be bearish for the major averages. Signup for a "Free 4 Week Trial Membership" or save up to 50% on a Premium Membership and you will have access to the following products. 1. "ETF Daily Buy and Short Signals" which can be used to trade the DIA's, QQQQ's and SPY's. 2. "401K/Thrift Savings Plan (TSP) Timing Service" which can be used to help improve your return in your 401k/TSP Account. 3. The "End of Month Strategy". This Strategy focuses on the typical End of Month markup by the Institutional Money. 4. "Stocks to Buy List" which can be used with either our Short Term Strategy or Long Term Strategy.

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