Next Move, Next Week
文章来源: ntrader 于 2004-09-24 16:10:29
Finnally, the semi rally faded. This may be one of the most funnest rally we have had for a while. For last three weeks, the warning from semi companies never stopped. Yet, the semi kept rising after each warning. Two things may have been playing out here: (1) buyers believe the worst is behind us in semi; (2) government will do everything it can to ensure that market can only higher before election.
Personally, I don't think the worst is not over for semi yet. In fact, I believe semi industry is entering a critial phase of becoming commodity. After tremendous advancement in silicon technology, led by Intel Microprocessor, the pace of the technological development has significantly slowed. We are seeing this evidence in Intel Processor (not much new product), wireless networking, and even wireless communication. The slowdown in techlonogy advancement leads to more competition and less pricing power. The end result: low profit margin, lower revenue, and eventually lower stock price. The semi has been priced on growth. If there is no growth or substantially smaller growth, this sector goes to no where.
The second belief in most of market participants may be true. SInce most people believe in government intervention to help the market higher, they won't sell before election even when obvious bad news hit. This may be the major reason that we see the market rise on bad news now.
While I believe the stock market may take hit after election, before election, buying on dip may be a good strategy. I would put my bet on DOW 9200, NAZ 1800 and SP 1060. If the indices hit there, I would be a buyer, at least before election.
What happens after election is anyone's guess. Whoever becomes next prisident needs to clean the mess in Iraq, which is not easy thing to do.
Hold short in QQQ and SMH.
文章来源: ntrader 于 2004-09-24 16:10:29
Finnally, the semi rally faded. This may be one of the most funnest rally we have had for a while. For last three weeks, the warning from semi companies never stopped. Yet, the semi kept rising after each warning. Two things may have been playing out here: (1) buyers believe the worst is behind us in semi; (2) government will do everything it can to ensure that market can only higher before election.
Personally, I don't think the worst is not over for semi yet. In fact, I believe semi industry is entering a critial phase of becoming commodity. After tremendous advancement in silicon technology, led by Intel Microprocessor, the pace of the technological development has significantly slowed. We are seeing this evidence in Intel Processor (not much new product), wireless networking, and even wireless communication. The slowdown in techlonogy advancement leads to more competition and less pricing power. The end result: low profit margin, lower revenue, and eventually lower stock price. The semi has been priced on growth. If there is no growth or substantially smaller growth, this sector goes to no where.
The second belief in most of market participants may be true. SInce most people believe in government intervention to help the market higher, they won't sell before election even when obvious bad news hit. This may be the major reason that we see the market rise on bad news now.
While I believe the stock market may take hit after election, before election, buying on dip may be a good strategy. I would put my bet on DOW 9200, NAZ 1800 and SP 1060. If the indices hit there, I would be a buyer, at least before election.
What happens after election is anyone's guess. Whoever becomes next prisident needs to clean the mess in Iraq, which is not easy thing to do.
Hold short in QQQ and SMH.
