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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Return to Sender who wrote (31405)	7/12/2006 11:39:17 AM
From: Donald Wennerstrom	Read Replies (3) \| Respond to of 95639

RtS, Great article, thanks for posting. I like one of the possible prognostications in the article. <<If the bubble experiences of gold in 1980 and Japan's stock market in the late 1980s are any indication, it could take years to unwind the incredible run in the SOX. Indeed, as hard as it may be to fathom, it may well be that we have not yet seen the ultimate post-bubble lows in many of these stocks.>> Don

To: Return to Sender who wrote (31405)	7/12/2006 12:43:09 PM
From: The Ox	Read Replies (1) \| Respond to of 95639

By looking at the chart, you can see what the market is doing but not where there are imbalances between the stock's price and the company's fundamentals. Locating the imbalances is where a trader can take the greatest advantage of the stock's price. This article on Booms and Busts in the SOX chart fails to address any fundamental issues. Anyone can look at a chart and say, hey, at this point the stock went up 200% and then it fell 80%. So what! To point to a chart and say...hey, it could fall another 50% from here because that's what it did in the past...well, that doesn't do me any good. Tell me why the price went up 200%! Tell my why it fell 80%. Explain why there is an imbalance or could be an imbalance! We want to take advantage of what the market gives us but you can not do this by looking ONLY at the chart. While the various TA indicators can do this for a TA only trader, I don't use these alone. I need to know more then what the chart is saying. To completely ignore the fact that earnings for the current quarter are going to come in about 100% greater then this time last year is a mistake. If this is the peak in earnings potential, when then yes, it makes sense that the stock or index could fall another 50% from here. But if earnings are going to go up or be flat for a year before going higher, then one might look at the current drop as a great opportunity. The market is currently saying that the industry is going to fall from here. Let's see what the earnings reports have to say in this regard before we use only the chart as our guide. In my opinion, TO