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

To: Return to Sender who wrote (50942)	1/24/2011 6:02:39 PM
From: Jacob Snyder	2 Recommendations Read Replies (1) \| Respond to of 95521

<broadening top formation> Using inflation-adjusted numbers, the 2007 top was below the 2000 top. That makes it a (modestly) declining channel, with lower highs and lower lows expected. With that said, I wouldn't be surprised to see SPX hit all-time highs, this year or next. I am spacing out my sells (of long positions), and shorting, to be net short the market when we hit all-time highs. I'll be adding shorts in airlines. This is an inherently money-losing industry, which will get slaughtered if interest rates rise, oil keeps going up, and a recession threatens. Here's how they did last recession (2006-7 high to 2008-9 low): UAL 51 to 3 DAL 23 to 4 AMR 41 to 2 LCC 63 to 2 Recreational Vehicle makers, and cruise ship lines, are other potential shorts. They are consumer discretionary, usually bought on credit, and fuel-sensitive.

To: Return to Sender who wrote (50942)	1/25/2011 1:44:51 AM
From: Sam	3 Recommendations Read Replies (1) \| Respond to of 95521

many market bulls may be saying that although the immediate future could hold more gains and even higher highs for the S&P 500 there are good reasons for us to be concerned for the longer term. RtS, there are always reasons to be concerned for the longer term. Anyone who has been through a vicious bear market seeks out and finds reasons to be concerned because it is not unlike putting your hand on a hot burner--you don't want to experience that horrible, helpless sinking feeling again. But as Jacob wrote, you don't give a time frame for this possible meltdown. That alone certainly makes it possible--anything is possible. There are many possible catalysts for it, in addition to ones that Jacob mentioned: --The EU could implode; --the Asian countries that have been a good deal of the engine of growth for many countries as they build out their infrastructure and economies could easily make missteps, and get ravaged by inflation or by commodity shortages as their internal demand builds; --the Fed might miscalculate by not soaking up excess liquidity in time to avoid inflation or might decide to tighten too soon, prematurely cutting off the recovery as happened in '37-38; --the absurd amounts of debt that banks have allowed themselves to take on in pursuit of ever greater profit and have been permitted to take on by certain governments (I am thinking here particularly of Ireland and Great Britain, both of which encouraged banks from other countries to set up subsidiaries in order to avoid their own countries' relatively restrictive lending regulations, got a temporary boom and now are suffering the predictable hangover with austerity measures that are far from popular) could easily lead to another credit crunch; --the fact that we are facing potentially enormous imbalances as globalization leads to change that is just too fast for people and countries to adapt to, especially developed countries that have vested interests and populations employed in careers that are disappearing either due to technological advances or due to competition from low cost labor in developing countries, leading to massive dislocation and continuing unemployment or underemployment and lower standards of living and to social unrest. Retraining middle aged people who have been employed in a field for 20-30 years is not an easy task, and many of these jobs will simply move to other places, something that modern technology, communication and transportation facilitates. Furthermore, the elites who have money and and power are vested in the status quo, and even if they see the need for change in the abstract, may well not be fully motivated to make necessary changes--after all, some perhaps even many of them may well reason, "individual responsibility" trumps everything else--"What can you do, people are just too [lazy, inflexible, dumb, irresponsible, not far-sighted enough, unlucky--add whatever word you choose here; rationalization of the status quo is pretty easy for educated people to do, especially if they deem themselves "winners"]. And of course, on top of all that, there is the possibility of an environmental disaster. Or even multiple environmental disasters, ranging from climate change to critical resource depletion. All that said--for now, the Asian countries are doing pretty well, the recovery in the US at least looks like it is building and the employment situation is getting better, the EU could conceivably muddle through as they have done so far, either temporizing and gradually over time healing their debt problems or they could possibly cut off some of its weaker countries without completely imploding (although some of those banking subsidiaries are now problematic, and could still infect some of the more important economies with another credit crisis). There is still a steep wall of worry to climb, caution is warranted, but so is at least some optimism. Usually it takes more than one interest rate hike to cut off a recovery--in fact, usually takes about 3--and we haven't even had the first one yet. Although there will undoubtedly be some corrections over the next year--one possibly even starting right after this earnings season is completed, to judge from the initial reactions to excellent reports so far--I still think that barring an EU implosion or a sudden inflationary flare up, we will on balance have a decent year in the market, up mid single digits when all is said and done. JM[very]HO.

To: Return to Sender who wrote (50942)	1/25/2011 3:02:28 AM
From: Sam	1 Recommendation Respond to of 95521

Say Goodbye To The 'New Normal' Published: Monday, 24 Jan 2011 \| 11:35 AM ET Text Size By: Jennifer Leigh Parker, cnbc.com The new normal is looking a little old hat. The catchy and no doubt memorable phrase coined by Pimco boss Bill Gross amid the financial crisis is rapidly disappearing from Wall Street’s lexicon—and probably Davos' as well. And that's probably a good thing. With the Dow Industrials having almost doubled from its crisis low of 6500 and many economists calling for solid US GDP growth in 2011, the new normal—“half-size economic growth induced by deleveraging, re-regulation, and de-globalization"—has lost a lot of its usefulness. The emerging consensus view is if US stocks have recovered can the economy be far behind? “Can you really compare the two?" asks UBS Senior Equity Strategist David Lefkowitz. "There is definitely a correlation, but look at how margins in the corporate sector have risen so high, so quickly. If this was a more normal recovery, GDP would be growing faster than it is. That’s really the bottom line. [We’re in] a sub-par recovery.” That may not qualify as a new normal. Aspects of the labor market, however, are certainly something new. “Look at long-term unemployment," says Lefkowitz. "The extent of the damage of the labor markets is as bad as we have seen since the depression. [And we’ve had] so much government support for such a long time, before we get to the point where the economy is standing on its own two legs, it’s too early to pass a verdict on whether or not we’re in a new normal.” The level of the jobless rate is rare, but jobless recoveries—or slow labor market recoveries—certainly are not new, and in fact, may be more normal than not in the past 30 years. What we’re accustomed to—what we think of as ‘normal’— is pre-crisis behavior; mainly because it represents the collective memory of the last decade as well as a good part of the 1990s. During the easy-credit era, economic growth was enabled by the unsustainable leverage of the consumer. The leverage could be referred to as many things—unprecedented, outrageous, obscene—but certainly not normal. At the same time, Americans have been on a borrowing binge for three decades; it just intensified during the last one. What we know for certain is that we’re in the post-steroid economic era, but that doesn’t answer the question: Where does GDP go from here? The consensus estimate for full-year GDP growth in 2011 is about 3.5 percent, with more than a few forecasting 4 percent. Even stronger growth is expected in 2012. 4 percent for the final two quarters. The economy may still be facing headwinds in housing and labor markets, but it also enjoying a substantial tailwind from both fiscal and monetary stimulus. Tobias Levkovich, chief US equity strategist for Citigroup, argues that both consumption and corporate investment will eclipse the government’s spending hole and will allow for sustainable growth. “Corporate confidence is coming back. We should get more durable [growth] now, given that credit conditions are improving," says Levkovich. "If you are waiting for bank lending to improve, you’ve waited way too long. Look at the Federal Reserve Board’s bank lending standards for commercial loans. Improved credit conditions lead business activity; hiring trends by 9 months, loan activity by 18 months.” On the heels of JPMorgan Chase's [JPM 45.02 -0.27 (-0.6%) ] Q4 earnings report, announcing an unexpected increase in loans, it looks like banks are in fact beginning to loosen their purse strings. FAO Economics Chief Economist Robert Brusca is among those predicting 4-percent GDP growth this year, because of strong investor demand and the prospect of consumption going up. Brusca doesn’t think turning off the faucet of government spending is such a formidable threat. “We’ll pass the baton from government sector to private sector, If we get job growth. This is the image: Pushing a car up a slippery slope. I can see either side being right [government spending vs. consumption], but not both at the same time. If you keep pushing to the right spot, we’ll be in a place where the economy can sustain itself.” “There is a much higher correlation between stock market growth and retail sales activity than there is between stock market and housing activity," adds Levkovich of Citigroup. So the stock market is both a feel good factor and leading economic indicator. There's nothing new about either of those things. The stock market rally peaked in late 2007, a year before the collapse of Lehman Bros. and the financial panic that knocked over other giant financial firms like so many dominoes. Of course, given the lightspeed of financial markets these days, nothing is new for very long. That my be the lasting new normal. "People come up with catchy phrases. I don't think its useful," says Brusca. "Pimco has been a believer in it. But they also forecast the recession long before we had it. They forecast the double-dip, it hasn’t happened. But they’re the gorilla in the room. You can’t ignore them.”