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Technology Stocks : Semi Equipment Analysis
SOXX 288.52-0.3%4:00 PM EST
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To: Return to Sender who wrote (67234)2/1/2015 6:24:57 PM
From: Return to Sender4 Recommendations

Recommended By
Donald Wennerstrom
jpdunwell
oldbeachlvr
The Ox

  Read Replies (2) of 95420
 
Two down months in a row? Yes that is exactly correct. It's also true that the VIX is rising as these monthly charts clearly show. One thing not nearly enough analysts are talking about is the fact the number of new lows in the market is not all energy stocks at all. When a stock market rises on poor market breath it is at risk of a much bigger sell off than we have seen thus far. Two down months with this much complacency, far too few shares sold short and way too much margin being used by investors remains a recipe for disaster.

It's been my contention that perfection has been priced in for some time now into stocks. Consider for a moment if interest rates were at historical norms would stock prices be fairly valued here?

My point, and I am not being bearish but rather rational, is that if the market were to fall to the mean on valuations, we have a considerable drop in our future.

RSI (14) on monthly charts above 70 is rare and associated with major market tops. Conversely RSI (14) below 30 is also rare and associated with major market bottoms. Look closely and you will see the VIX is shown versus the index in question. On most charts you will also see the SOX since it is an area of personal interest to me.


















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