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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread -- Ignore unavailable to you. Want to Upgrade?

To: Wally Mastroly who wrote (1175)	5/23/2001 9:38:27 PM
From: Justa Werkenstiff	Read Replies (3) \| Respond to of 10065

Wally; Re: "Justa, What's your take on the chip/equipmakers plight relative to the poor book-to-bill data? Think "their" bottom is in place? Or think this sector will languish for awhile?" Bottoms will at least be revisited absent a quick rebound in demand which I do not currently see: (1) Sell side analysts are continuing to push these issues. You buy these when they all pretty much say sell. Not now. Consensus now is that the bottom is in, it can't get much worse, the train is leaving the station. (2) No insider buying. In fact, insiders are selling them. See Novellus under Yahoo news today. There is a huge dumpathon going on. Moreoever, practically no insider buying in technology in general in month of April. (3) Rule of thumb: things always seem to get worse in a downturn in this sector more so than most expect. (4) Valuation metrics are historically high for a trough in the cycle. In fact, one can argue that one should sell now on the rumor of an upturn in bookings in Q4. (5) I don't think people will know what hit them after we get earnings warnings this quarter. (6) Historically, the Sox has bottomed along with the Nasdaq. I have not seen a final bottom in the Sox in my opinion at least without at least a retest. So I do not expect a bottom in the Nasdaq until the Sox bottoms. I can't project at what Nasdaq level that might be at that time. It does not have to be lower than 1636 but it might. Okay, I will go out on a limb here -- something that I am reluctant to do on the internet anymore -- and say that my work indicates that the Sox could trade as low as the lower 300s before there is a good bottom. But I see at least a revisit to the lows this year thus far at least once and possibly twice. I think AMAT has the potential to trade in the mid 20s or so at some juncture. Now in both of these projections, I cannot say how long we would trade at those levels. We could touch them briefly or trade around there for a time. AMAT is a market focal point. Don't know how long she can trade in the 49 - 59 channel given BTB information and sector warnings. But if it closes below $48, get ready for another leg down to at least $40 for now. FWIW