Greg, the problem is that if we indeed go below $12 by January, we will face a traditional weak period for the sector, and the technical damage inflicted could require longer to heal. I am afraid that if the SOX does not hold here, it could go well below 270 or so. Last year, I missed the February rally badly, so I do not want to take too strong a stand against a repeat this year, but the likelihood of having the same pattern twice, is...
I would have preferred to see CYMI fight on its mMaginot line at 16 to 16.5, and if the breach is just a one day affair and tomorrow it bounces back above $16.5, it will add to my "whipsaw cases. However, experience taught me that it is better to accept few whipsaw and step aside when a freight train approaches.
If you look at the fundamentals of the industry, despite few months of improved chip shipments, the equip. side is not yet in revival, and that is what "traditionally" happen, the chip have to recover before they start spending a big way on equipment. I have not seen an announcement of a new fab for quite sometime, and the only light was some Korean Chaebols fighting tooth and nails to stay in the business, Hyundai announced cap ex. of close to $900 MM over the next few years to expand, of all things, more DRAMS.
Zeev
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