If you didn't jump in yet, watch the SOX/Intel action tomorrow.
Intel is at the critical support level (October low). I did expect SOX to turn down when it reached 262+ on three occasions and couldn't go any higher, but the speed with which it went down to previous lows was surprising - it may be related to Friday's expirations.
My guess/hope is that SOX will rebound. This should establish current levels as lows for semi-equips for at least a month - and in January the game rules are usually skewed in favor of longs. In this case, I recommend buying CYMI tomorrow as soon as the trend is established - even if you still think that February will be worse. One positive sign - MU jumped up after the close.
If, on the other hand, Intel falls through 69 support, consequences for semi-equips valuations will be rather grim. IMO, current semi-equips prices already fully reflect the Street worries about the DRAM glut and orders from SEA DRAM manufacturers - but if the Street thinks that IC producers are also in trouble and shows it by pushing Intel and TI lower, semi-equips will be hurt further.
Overall, it is very unfortunate for CYMI longs that techs are caught in a bad downtrend when Cymer is enjoying an unchallenged monopoly, but trends change, and, to quote Mr. Deanha, "Cymer remains the class of the field".
Regards,
Y.
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