Jack, >>With markets at high valuations, any disappointment will knock the markets down. The rubber band of market valuation is fully stretched. For markets to continue higher, all numbers coming in must not just be good, but great, including corporate earnings numbers due out laer this month. There is just so much more potential risk than potential reward.>>
(i) Views like that are not shared in the general public. You are rational, most people are ignorant about markets. (ii) If chash comes in (and it alsmost certainly will, as discussed before), most of it will have to be "invested", no matter what. Recall Vinik, and it is official policy (often legally binding) of most mutual and institutional, and some proprietary funds. (iii) It did happen before, research late 1920's, for example.
Re: SOX, I don't follow it on a short-term basis, and it depends on your overall strategy (e.g., when to close position), but IMHO, it looks to me that just today, many semi cos. with percieved weak fundamentals, and thus subject to a severe sell-off, are holding relatively strong so far because large holders are afraid to sell agressively in a weak market. Volumes are not high, relative to other shares. They may have to sell later anyway, should market weakness continue - then there will be significant breaks. Is SOX cap-weighted? If so, INTC is a very major component, then MOT is distant second, the rest are yet much smaller. Could consider playing INTC and/or MOT separately. I do have some MOTPJ's, but my aim is longer term.
Joe |
