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Thursday, September 8, 2011

Market Thought... semis and IBM

Any chartist main indicator is the semis. They usually lead overall market direction. When they are down, the market will be down. (I, myself, have accurately used it many times. Here is just one example.)

My issue with using the semi index now is that the index is heavily dependent on PC centered semis. Everyone now knows PC are not growing nearly as fast as mobile device related semis. Why does the index not include QCOM or ARMH or even MIPS. After all, QCOM and ARMH are the main players in the mobile tablet push we are in. The Arm architecture dominates mobile devices, and everyone knows what QCOM controls.

The semis still look very weak, and are in a negative trend.

In order to break the negativity, there needs to be a breach on the 50SMA. But I question if certain changes were made to the SOXX to better reflect the changing trend, would this trend be more bullish?

Look at charts of QCOM and ARMH, they did not act as weak as the overall index because of the industry shift toward mobile.

If the SOXX is more bullish, the market players will get more bullish.

With more uncertainty being removed from the EU situation, and the more the big-boys realize a credit freeze is not going to happen, they will look to charts like the SOXX to guide them. Especially as the market consolidates near 1200-1220.

Right now, the big-boys are not being guided properly. But this is where we little fish can be a few steps ahead and profit before them.

I am getting more bullish on the market by the day. (especially in names like IBM, AAPL, QCOM, POT, AXP etc)

Side note: The $1B in financing that IBM is offering to small-mid size businesses I think is genius and awesome. It bolds very well for them from a branding perspective and to get more costumers.

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