Monday, September 25, 2006


Sector Spotlight: Semiconductors

Despite what the fuckers on CNBC say, I feel the market is going to head lower.

Too much optimism, coupled with the end of the third quarter equals lower stocks. At least, I believe it to be the case.

Think about it. If you were running money and got poleaxed on your oil positions (as many did) and had two weeks to make the money back, else your partners or clients would get their statements and leave your pathetic top ticking ass: What would you do?

Answer: Buy tech and say a prayer. (The quarter ends this Friday)

Now, what if you bought tech, specifically RACK @ $22, and (by miracle) saw the turd run up to $28: What would you do?

Answer: Sell and thank God for his grace.

Be careful of end of the quarter bullshit. The talking heads on CNBC (U.S.) are always bullish, because its good for ratings. If you want fair and balanced commentary, I suggest watching CNBC Asia or Europe.

Anyway, keep a close eye on the semi's. MSCC warned. SNDK got a Merril downgrade (fuck you Merril). And, the SOX is dangerously close to rolling over. Additionally, we are officially in earnings warning season. Therefore, we could get an "October surprise" at any time.

Now, to be fair and despite my armageddon demeanor, the markets are green today (UPDATE: Just went red) and there is lots of strength in the select tech names, such as AAPL, LRCX, XMSR, AUO and GOOG. My point is to be careful of two card monty.

NOTE: Please take the new "Fly Survey." Are you bullish or bearish on the markets?

The following semiconductor stocks are showing some mojo:

AATI +4.4%
INTT +3.1%

RMBS +2.9%

LRCX +2.5%

ASX +2.4%

The following semiconductor stocks are showing absolutely no mojo:

MSCC -12.3%
NVEC -6.1%

NEXT -5.5%

SNDK -3.8%

SIRF -2.6%

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