Some Day This War’s Gonna End
I checked out the updated
version of Francis Ford Coppola’s “Apocalypse Now” last weekend, and
it was amazing to see it on the big screen like I had in 1979. That movie was
way ahead of its time then and is still spectacular. A couple of the new scenes
were really not needed in my opinion, but the expanded footage of Robert Duval
(“I love the smell of napalm in the morning”) and Marlon Brando was
really a treat for any fan of the original.
What does that have to do with
tech? Well, the opening scene begins with the haunting music of The Doors’
“The End” playing just as a napalm strike zaps a big swath of jungle.
I couldn’t help but think of the Nasdaq when I saw that jungle getting blown up
given the prolonged pain technology and telecom stocks have gone through over
the past year and a half.
What was interesting later in
the movie, though, was Colonel Kilgore’s (Duval) line where, in the heat of
battle with bombs and bullets flying, he turns to Captain Willard (Martin Sheen)
and says, “Someday this war’s gonna end,” and then walks away. That
same statement can be applied to the tech collapse. Someday its war is going to
end as well, and don’t count on the analysts to give a green light as to when
that will be. They are all at the peak of maximum pain, essentially writing off
the whole group now, and are extending their gloom for a big chunk of next year.
It was nice to see the Nasdaq
eke out a positive gain for the week, thanks in large part to John Chambers and
Cisco’s
(
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stabilizing and that they would completely restructure the company into 11
technology groups. Tech bulls breathed such a big sigh of relief that the
beleaguered Nasdaq found enough strength to bounce back from its four-month low
without collapsing to retest the bruising 1619.58 level from April 4.
News from Microsoft
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that it would present its final “gold code” to computer manufacturers
also helped give tech a boost Friday, since it seems like the government will
not seek to block the release of the new XP operating system. News that the
antitrust trial will be sent back to district court to a randomly chosen judge
was also a plus for MSFT. Apparently, the process will take months. That is a
big plus for tech!
An interesting sidebar story on
Microsoft came out this week that said that consumers don’t despise Microsoft
nearly as much as the Department of Justice would have us believe. A poll
conducted by the Gartner Group showed consumers distrusted AOL Time Warner more
than Microsoft, and once again, that highlights the wrong-headedness of the
government’s crusade against Bill Gates.
Again this week (like everyone
else on the planet), I am keeping a very close watch on the semiconductors
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PowerRating).
They had a nice bounce Friday, and as the Nasdaq hit new four-month lows, the
SOX refused (by a whisker) to hit new four-month lows. I still take that as a
positive, and despite a few disasters in the index, it managed to end the week
on a positive note.
Within the SOX, there are a few
bright spots that look strong and have held above their respective 200-day
moving averages through the recent tech swoon. Novellus
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bounce off of its 200-day moving average this week.
LSI Logic
(
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an uptrend since its April lows and is constructively holding above its 50- and
200-day moving averages.
Also showing some resilience is
Lattice Semiconductor
(
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PowerRating), which, like Novellus, got a nice bounce off
of its 200-day MA and looks well positioned for when tech finally makes its
turn.
Remember, nothing in any area
of tech, be it handsets, PCs, cellphones or GameBoys can be made without first
ordering chips. They are in everything we use, and the turn in the chips will
likely be the signal that Colonel Kilgore’s “war” has ended.
Have a great weekend!
Dan