Back to the SOX again...
Gary TanashianBecause I am holding gold & silver miners with a firm hand, I do not find the need to write about them if nothing has changed, and given that the precious metals indexes and gold itself have held to our downside targets, nothing has changed.
But things have changed in the Semiconductors which, in hitting 401.86 earlier this week have satisfied the goal of getting to "something near my target of 400" which has been noted here on the blog for several weeks now off of that clear Head & Shoulders top. Also, the weekly chart shows what 'could' one day be viewed in the rear view mirror as a buying opportunity. We shall see.
With the outright bearishness evident in various market sentiment indicators and with the idea that Central Banks' liquidity policies - in response to the various mortgage and credit market meltdowns - are equal opportunity pumpers, I have begun adding some household names in semiconductors and big tech. You know the names. I either own or am watching closely the likes of Intel (INTC), Texas Instruments (TXN), Broadcom (BRCM), Microsoft (MSFT), QLogic (QLGC) and Cisco (CSCO). I am also keeping an eye on the beaten up semiconductor equipment stocks. These big techs and semi's, generally sporting healthy balance sheets and global market reach, are benefiting from the easy monetary policy of a Fed trapped in a box. Where will the next bubble be? Big tech fits the bill on the short list of possibilities. Think about the implications of financially sound global companies receiving monetary stimulus (and a beneficial weak USD) that they don't really need.
Let me say that with all of the dramatic goings on in the markets, it is quite pleasing to note how rampant fear and angst have become, from professional Wall Street to retail Main Street. I am on Jim Sinclair's email list and I tell you I read some extremely frightening input from this seasoned gold market veteran - and I do not take it lightly. But short of a leveraged, derivative ignited financial domino accident, things are shaping up bullish folks. I am getting bullish, I don't know how else to put it. In a recent post, A-B-C or H-O-P-E the marvelous up day last week was seen for what it was, short covering and hope. But now, after further downside, the path may be cleared for a rally with more longevity.
But I always manage risk and readers should as well. When you start from a base of caution and prudence then you can take steps to potentially profit from the fear and herd mentality of others. That is what I am currently doing; potentially setting up to benefit from fear riddled markets that have been pounded down to support. One must be selective and ultimately willing to be wrong and admit it. But you don't make money buying Wall Street's bullish touts. You make it by being brave when others are... Bueller? FEARFUL. You make it when others are fearful. Cash and equivalent levels remain healthy and continue to generate return in the safest short term Treasury vehicles. This helps in the effort to "be brave".
24 November 2007
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