The Gong Show
Pundits rang the bell–or at least one bellwether, Intel–signaling to
institutions that it might be safe to wade back into the market following two
dismal weeks that have done serious damage to most tech exchange traded funds
and had erased all of the Nasdaq’s August gains. Money flowed, in fact, poured
back into selected semi and broadband stocks, and seemed to come straight out of
one of the hottest funds new ETFs on the Street.
An upgrade by a Bank of America analyst on Intel spurred buying that was
twice average, leading to a rousing 7.5% gain in the semiconductor HOLDR
(
SMH |
Quote |
Chart |
News |
PowerRating).
Advanced Micro Devices
(
AMD |
Quote |
Chart |
News |
PowerRating), from the chip HOLDR ,also advanced on an
upgrade. Momentum players will want to take note that all 19 stocks on the SMH
rallied; that only three failed to rally at least 5%; and that 12 of the group
closed in the top 9% of Tuesday’s range. It will be difficult for the inertia
from Tuesday’s action to not carry over onto positive turf in Wednesday’s
session. The semi HOLDR-rally also gave the SMH the third best one-week RS
reading of 95.
The Broadband HOLDR
(
BDH |
Quote |
Chart |
News |
PowerRating) also slammed home a 5.38% gain, riding higher
on the back of gains in Qualcomm
(
QCOM |
Quote |
Chart |
News |
PowerRating), JDS Uniphase
(
JDSU |
Quote |
Chart |
News |
PowerRating),
and Applied Micro Circuits
(
AMCC |
Quote |
Chart |
News |
PowerRating), which all rose more than 9.6%. Keep an
eye on JDS Uniphase which will become even more of a “litmus” stock,
once its merger with SDL Inc. is completed. SDLI rose 38 to 342 and these two
stocks were in large measure responsible for the Nasdaq 100’s
(
NDX |
Quote |
Chart |
News |
PowerRating) best
gain since the early summer Tuesday.
The benchmark stock on the B2B Internet HOLDR
(
BHH |
Quote |
Chart |
News |
PowerRating), Ariba
(
ARBA |
Quote |
Chart |
News |
PowerRating),
took charge with an 11-point gain to leave this ETF with a 5.12% gain.
Commerce One
(
CMRC |
Quote |
Chart |
News |
PowerRating) also powered 3 3/16 higher to 69. Tuesday’s up action
leaves the BHH back on the top of the three-month and six-month RS lists of the ETFs
that have been around long enough to have data points for this measure (e.g., the Utility HOLDR
(
UTH |
Quote |
Chart |
News |
PowerRating) only began in late June).Â
The worst fall ever in the short history of the Utility HOLDR
(
UTH |
Quote |
Chart |
News |
PowerRating),
-4.75%, showed that there was rotation out of, and profit-taking from, one
of the hottest funds of late and from the energy
sector. This could be a clue from energy stock holders that the
price of energy may be approaching a climax. If energy prices do fall, it will remove one of
the weights restraining the economy, corporate earnings and higher prices on the
major market
gauges.