3SOF

-- Semi Index --

I let go all my semi stocks, Semis going south bound.... Next support around $480.00

Goodluck!!

The Semicondutor Index today had a significant fall, and in the daily chart we can see that thi movement has stopped near the bottom of the trend, however one sell signal was given us by the MACD with the fast line crossed below MACD slow line. If tomorrow we break the green line to the downside further declines to 400 level should be expected from here into October. Let's see if this cenario will be confirmed. I still cautions in the long side here.

PHLX SEMICONDUCTOR SECTOR INDEX
SOXX breakout...
The SOXX has smashed through the 200-Day MA resistance!

Below are the 6 month and 1 year charts.......

The SOX has been trending down for several days now, and the SOX is in worse shape than the SPX.
The SOX is "rummaging around" in the area of April values. At least the SPX is still above the April values(but barely).

Where do we go from here? At some point both indices will turn up, but we may not be there yet. The economy is a big issue today, and where it is going from here is a question on everyone's mind I believe. We need some resolution.

As for the SOX, there have been several positive articles recently on semi equips and semis in general, but so far, it has not shown up in actual improvements such as the BtB data that just came out recently. Now the argument goes that the "market" is looking quite far in the future and sees a much better economic environment that accounts for the nice gains since early March. On the other hand, maybe that rosy scenario may not come to pass as quickly as expected?

We all try to guess on a daily basis how the "market" is going to see the future. Unfortunately, the "market" is quite fickle and changes its mind daily too.

None of the semis are participating.......
interestingly, the entire semiconductor sector is sitting out the rally
This has been going on for the past month or two.

$SOX (Semiconductor Index - Philadelphia) INDEX...

Semis...The Market's Sleeper Stocks.
Investors need to comprehend two concepts, cyclical and secular growth.
Cyclical refers to a company that may not have control of its destiny and bends according to the economies around the world, which is a sign of weakness. Secular means a company has something else going for it besides the economy, a trend that's bigger than anything the business cycle can throw at it.

Now, almost every single semiconductor company...
Intel (INTC)
Xilinx (XLNX)
Marvell Technology (MRVL)
Cypress Semiconductor (CY)
Broadcom (BRCM)
Avnet (AVT)

and many others, has reported blow away numbers.
But the analysts have chosen to view the gains as a cyclical phenomenon,
based on worldwide economic recovery...that is wrong.
They should be recognized as products of a secular trend because we use more semiconductors in gadgets, and these gadgets are being embraced by emerging middle classes everywhere from China to India to Latin America.

SOX is twice blessed, not only for their products being used in tremendous growth, mostly related to the smartphone revolution, but also to the potential new customer base, which could amount to roughly a billion people, spotting you 700 million emerging members of the middle classes just in China and India alone.

The reason investors need to know this is that almost all of these semiconductor stocks are down since they reported, and it's important to remember, that SOX stocks are now secular growth stories such as these that have nothing to do with the larger economic issues.

The bottom line: The Sox are back, and for this reason, investors should buy one of the semiconductor stocks.


   

$SOX (Semiconductor Index - Philadelphia) INDEX...

The PHLX Semiconductor Index (Nasdaq: $SOX) was running into resistance around 450 after back-to-back closes above that level for the first time since November 2007. Chips are considered a leading indicator for the broader market.

Semiconductor Stocks Spike...

Broad market trade has been rather choppy in the first few minutes of action, but the Nasdaq Composite has climbed to a nice gain. Its relative strength stems largely from an early interest in semiconductor stocks, which are collectively up 1.2%, according to the Philadelphia Semiconductor Index.