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

To: Return to Sender who wrote (43751)	3/15/2009 7:24:04 PM
From: Donald Wennerstrom	1 Recommendation Read Replies (1) \| Respond to of 95616

RtS, Good reports as usual from AI and IH. I think both agree that the market could go up or down next week. Both have many "good nuggets" in their report, but also a lot of prose. I am going to try to "snip out" and paste below some of the items for reference that in my opinion could be quite useful next week while the markets are in session. First AI: 1. As mentioned above there is one thing we have to be on the lookout for as it's always possible the final sub wave 5 (5) may end up truncating and never drop back below the low made on 3/6/09 of 667. The odds of this occurring would increase substantially if the S&P 500 were to rally back above the 50% Retracement Level of 772 (point B) and approach the bottom of sub wave 1 (5) which was at the 804 level. 2. The 5 Day Average of the Put to Call Ratio has now dropped to its lowest level (point B) since the market peaked in October of 2007. Over the past few years when the 5 Day Average of the Put to Call Ratio has dropped below 0.85 (points C) this has been followed either by a pullback or substantial sell off (points D to E) shortly thereafter. Considering how far along we are in the final 5th Wave down I don't expect a huge drop. 3. Keep in mind no matter what transpires over the next few weeks we are likely nearing a significant bottom in the market which will be followed by a substantial ABC type oversold rally that could last from 3 to 6 months. From IH: 1. It is just a week of gains off the lows, but this is a notable character change heading into a new week, and in this market we know what can happen: anything. 2. Money leaves the market at the bottom. We have been putting it in and we are already taking gain off the table on this run. 3. SP500 closed over the November low level, but not enough to really mean much. It will have to test it this week and then put some distance on it during a second run higher for the break to mean something and for the level to become support once more. NASDAQ moved up to its January low and is somewhat in no man's land above the December low yet below the 1500 level considered key. SOX broke free of some congestion, but it still has overhead resistance. 4. Chips were the one clearly identifiable leadership group. Chips are out front as they were in late 2002 when the market bottomed out of that bear market. 5. As noted above, money flowed out of stock mutual funds to the tune of $8.4B. That is just part of the steady weekly outflows. That is also an indication of a reason for the market to try this bounce and why it might have some more legs. Investors are bailing and historically when the crowd bails out the market is getting ready to move higher. 6. SOX (+1.26%) bounced off the mid-November to start the week and rallied through the 50 day EMA to come within 5 points of a key level at 225. It somewhat triple bottomed off the late February low. Best index in the market, never coming close to its November low. Similar action in 2002 when SP500 held the line as the other indices fell through prior lows. Chips have the bonus of being leaders off lows and as in 2002, though hardly to that scale thus far, they are firmly in the lead of what leadership there is. 7. The financials led SP500 off of its new bear market low, taking the index just back up above the November low (752 closing). That is the point everyone is watching. Cleared it right? Yes, but not by enough to mean anything. It will come back to test it and the question is whether it goes up onto 800 resistance first. That is the best upside scenario, a higher test and then a test of that November low. A hold there makes the old low key support and a good point to move up and attack next resistance. We see this week if the sellers come out with the ax. 8. The market is trying to pull itself up off the mat and it may not be successful. There is leadership and more trying to emerge; a spanking from the Friday close on high volume will likely tamp that out those trying to emerge. It is a real drag trying to come off the bottom. You cannot trust it, you cannot put your faith in it. At the same time you cannot trust the downside and put your faith in it either, because it has had too much fun and its avarice often leads to its own downfall just as the upside's greed ultimately exhausts all buyers.