My Stance Has Changed — Here’s How

  • September 10, 2004
  • Gary Kaltbaum


Ok…TXN comes in lower than expected…NSM comes in lower than
expected…just about every ANALyst has downgraded the SEMIS…but they
had a strong, powerful move yesterday. MY STANCE HAS CHANGED. Since
the last week in January, I have been bearish on the SEMIS. I am no longer
bearish. Simple as that. As I have always said…and said in yesterday’s
reports: “It’s not the news, it’s how the market reacts to the
news.”


Failing to go down on bad news is the first step in a potential
bottoming process. I like the fact that volume was extremely heavy on the
move yesterday while hearing lots of doubt about the move.


 

The market spoke loud and clear yesterday…and said that the SEMIS
had gone as far down as they wanted to go. After all, the SOX had
dropped almost 40% since the top in January. That’s a big matzoh ball.


 


So what next? How do I play it? I DON’T KNOW. There are no bases to buy off
of…except maybe MRVL…but that’s about it. I am going to be patient and
let the bases form and see if there is follow-through. Just because I am not
bearish anymore does not mean I am bullish. It just means you can no
longer look to short the group for this second. There has been a ton of
damage done over the past 8 months. That will take time to repair. It will
not happen in one day.  I will keep you informed and will play it as it
comes.


 


That said, the DOW and S&P are in the heart of resistance. I have a
sneaking suspicion that there will have to be more backing and filling
before attempting to the high end of this range which started in January.
The good news is that more and more leadership is showing up…and
hopefully, that continues.


Please tune in to FOX NEWS CHANNEL Saturday from 10 am EDT-Noon. I will be
appearing on the business block which will be emanating from the 9/11 site
with special reports on how 9/11 changed the economy, markets etc.

Gary Kaltbaum