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

To: brokenst0nes who wrote (52567)	6/25/2011 5:25:51 PM
From: Donald Wennerstrom	2 Recommendations Respond to of 95616

I doubt adding the other 9 stocks in the present SOX index to the SOXM would make much difference. On a weekly basis, the SOXM and SOX have been tracking each other fairly well, sometimes they trade places, one above the other. As far as the rebalancing is concerned, I am not aware of any rebalancing for the SOX on a quarterly basis. There is obviously however, a change in the index components on irregular dates as deemed desirable by the exchange. At the time the changes are made, the index is re-indexed to prevent any instantaneous change on the chart, but from that point on, the index is a different animal. The last time they changed the index from 18 to 21 stocks, they also changed the way the index is computed on a daily basis. When it was 18 stocks it was a price weighted index with a specific divisor that changed to keep the index level when a stock was added or subtracted. When they went to 21 stocks, the method of indexing was changed to a more complicated method. The above is a short answer to the index changes, but it is the reason I kept the SOXM as the 21 stocks in the index before 9 more stocks were added. We are about to have another change, probably quite soon, when NSM is finally integrated into TXN. This will affect both the SOXM and the SOX. Having said all of the above, I think the present Group SOXM(SOX) tables are accurate enough for what we are observing in the way of market action. It is not "perfect", but I think very representative of what is going on. Don